2024 ANNUAL REPORT
A Letter from the Chairperson Board of Directors Unity in Leadership President and Chief Executive Officer 6 Supervisory Committee Report Chairperson, Supervisory Committee “If you want to go fast, go alone. If you 4 8 12 2024 Infographic Highlights – African Proverb 10 2024 Financial Summary want to go far, go together.” Treasurer’s Report Board of Directors 14 Community Impact Report 16 Branch Locations 18
Letter Our performance in 2024 was a testament to our strategic focus and commitment to excellence. many years, and her visionary leadership has significantly shaped our strong institution. Her As we move forward, I am excited about the future Thank you for being part of the Allegacy family. We under the leadership of our new President and look forward to achieving even greater heights CEO, Nathanael Tarwasokono. Nathanael brings together. a wealth of experience, a fresh perspective, and a deep commitment to our mission. Together with Warm regards, our talented and dedicated Executive Leadership Lisa Marshall Chairperson of the Board Allegacy Federal Credit Union Team (ELT), we are poised to continue our journey Lisa Marshall Chairperson, Board of Directors outgoing President and CEO, Cathy Pace, while we Cathy has been Allegacy’s guiding light for and the communities we serve. celebrate and appreciate the contributions of our as our new President and CEO. to positively impacting the lives of our members and dedication of our entire Allegacy team. member base. The board of directors and I enthusiastically welcome Nathanael Tarwasokono their tireless efforts, dedication, and commitment growth. These achievements reflect the hard work exceptional financial services to our expanding success. I also want to thank our team members for strong, with steady assets, loans, and deposits Allegacy, highlighting our commitment to providing Your unwavering loyalty is the cornerstone of our partnerships. Our financial performance remained This year has been a pivotal transition period for our members for their continued trust and support. engagement, and strengthened community embrace a spirit of gratitude and enthusiasm. In closing, I want to express my sincere gratitude to robust membership growth, enhanced digital A s I reflect on the remarkable journey of 2024, I We achieved notable milestones, including from Lisa Marshall, Chairperson, Board of Directors foundation laid by Cathy. of growth and innovation, building on the strong Board of Directors Lisa Marshall Ann Johnston Chairperson Director Coleman Team Ben King Vice Chairperson Director Kevan Ostrander James Torrible Secretary Director Tracey Beck Quintin Williams I extend our heartfelt thanks to Cathy for her Treasurer Director remarkable contributions and wish her all the best in Supervisory Committee Members dedication, passion, and unwavering commitment to our values and mission have left an indelible mark on Allegacy. On behalf of the Board of Directors, her future endeavors. Ann Johnston Committee Chairperson 2024 presented a unique set of challenges and opportunities. The economic landscape was marked Lee Decker Al Wood Executive Leadership Team by volatility and uncertainty as technological Nathanael Tarwasokono advancements and geopolitical tensions shaped President and Chief Executive Officer the year. Persistent inflation impacted the cost of living, adding to the complexity of the economic environment. Despite these challenges, Allegacy demonstrated resilience and adaptability, confidently navigating the economic environment’s complexities. Brian Vannoy Executive Vice President and Chief Operating Officer Michelle Salvadore Chief Financial Officer Tim Moore General Counsel and Chief Risk Officer 4 5
Leadership The smooth for your trust and loyalty. In a leadership “ transition from Cathy to me reflects from Nathanael Tarwasokono, President and CEO Allegacy’s deep commitment to collaboration, teamwork, and united leadership. A s I look back on the past year, I am filled with Our Board and immense gratitude for the journey we have shared. The strength of the team is each individual member. The strength of each member is the team. marketplace full of choices, we are deeply honored that you have chosen Allegacy as your financial partner. We look forward to serving you in 2025 and beyond! With gratitude and optimism, Nathanael Tarwasokono President and Chief Operating Officer Executive Leadership The theme of this year’s annual report, Unity in – Phil Jackson Team played a critical Leadership, captures the collaborative spirit that role in ensuring a has driven our success and marked a seamless Nathanael Tarwasokono President and Chief Operating Officer transition into a new era for Allegacy. NBA Player, Coach, Executive smooth and seamless handover. Their strategic foresight, unified approach, First and foremost, I extend my heartfelt appreciation to my predecessor, Cathy Pace, for her commitment to our mission, values, and community visionary leadership and steadfast dedication, which has laid a strong foundation, and it is an honor to have been instrumental in shaping Allegacy into the build upon her remarkable legacy. thriving institution it is today. Cathy’s unwavering and tireless efforts safeguarded the stability and continuity our members depend on. Together, we ” have harnessed our shared purpose and values to navigate challenges and seize opportunities with confidence. Looking ahead, I am energized by the possibilities that lie before us. Together, we are cultivating a culture grounded in collaboration, innovation, and impactful growth. Our priorities remain steadfast: delivering exceptional value and inspiring service to our members, deepening our community impact across North Carolina, and ensuring that Allegacy thrives amid an ever-evolving financial landscape. As I close, I want to express my heartfelt gratitude to every member of the Allegacy team. Your dedication, hard work, and unwavering commitment to our mission make a tangible difference for our members every day. To our valued members, I offer my sincerest thanks 6 7
Committee Report 2. Risk Management Allegacy’s risk management framework is well- Allegacy operates in accordance with applicable laws, regulations, and internal policies while safeguarding the interests of our members. Oversight and Audits Throughout the year, the Supervisory Committee conducted comprehensive audits and reviews to assess the effectiveness of Allegacy’s internal controls, risk management practices, and overall governance. We engaged an independent audit firm to perform an external audit of Allegacy’s financial statements, ensuring accuracy and transparency in our financial reporting. remains in full compliance with all applicable laws and regulations, safeguarding the assessing, and mitigating potential risks. interests of our members. 3. Financial Reporting The external audit Technology and Innovation “ confirmed the accuracy and completeness of Allegacy’s financial statements. Allegacy’s financial position remains strong, with healthy Directors integrity. Our primary responsibility is to ensure that reporting processes. This ensures that Allegacy leadership team’s proactive approach to identifying, Chairperson, Board of Credit Union’s safety, soundness, and operational compliance by enhancing our monitoring and of its operations. We commend the executive Committee is pleased to present our report on Allegacy Federal We reinforced our commitment to regulatory structured and comprehensive, covering all aspects from Ann Johnston, As we reflect on 2024, the Supervisory Committee Compliance capital and liquidity Ann Johnston Committee Chairperson, Board of Directors 1. Internal Controls Allegacy’s internal controls are robust and effective in mitigating risks and ensuring compliance with regulatory requirements. We observed a culture of continuous improvement, with regular updates to policies and procedures to address emerging risks. levels that support its long-term sustainability. 4. Member Services of technological advancements, we supported initiatives to Leadership is not about being in charge. It is about enhance Allegacy’s digital capabilities. These efforts aim to provide a seamless and secure digital experience for our members, aligning taking care of those in your charge. Our reviews indicated high member satisfaction its members’ needs, delivering exceptional service and value through innovative solutions and community initiatives. Conclusion Inspirational Speaker and engagement levels. Allegacy continues to prioritize with Allegacy’s strategic goals. – Simon Sinek In closing, the Supervisory Committee is confident in Allegacy’s ability to navigate the challenges and opportunities that ” lie ahead. We are committed to maintaining the highest standards of oversight and governance, ensuring Allegacy’s continued safety and soundness. Enhancements and Future Focus In 2024, the Supervisory Committee worked We thank the Board of Directors, executive closely with management to further implement leadership team, and team members for their enhancements to strengthen Allegacy’s operational dedication and hard work. Most importantly, we integrity. These enhancements include: thank our members for their trust and loyalty, which Cybersecurity Findings and Recommendations Given the increasing prevalence of cyber threats, Our audits and reviews yielded positive results, we focused on bolstering Allegacy’s cybersecurity demonstrating Allegacy’s strong commitment to measures. Our efforts included updating security operational excellence and financial stability. Key protocols, conducting regular vulnerability findings from our assessments include: assessments, and training team members on best 8 Recognizing the importance practices for data protection. are the foundation of our success. Thank you for your continued support. Sincerely, Ann Johnston Chairperson, Supervisory Committee Allegacy Federal Credit Union 9
Report from Tracey Beck, Treasurer, Board of Directors infrastructure. creating long-term value for our members and Maintaining robust photo to come for our longterm stability. Throughout 2024, we ensured that our providing us with the flexibility to meet our members’ to share that it was a year of robust growth and “ levels is essential remained strong, Allegacy Federal Credit Union in 2024, I am pleased In closing, I want to express my liquidity and capital liquidity position As we reflect on the financial performance of Unity is strength… when there is teamwork and collaboration, wonderful things can be achieved. needs and respond to financial stability, despite the challenges presented by the economic landscape. Tracey Beck Treasurer, Board of Directors Economic Environment – Mattie Stepanek market changes. Our capital Poet, Peacemaker, Philosopher adequacy ratio remained trajectory. well above regulatory but remaining persistent, especially in the services . Loan Portfolio 2 financial strength and resilience. industry. While the U.S. economy remained strong Our loan portfolio grew significantly, driven by with robust consumer spending, anticipated shifts increased demand for consumer and commercial in trade policies, technological advancements, and loans. We maintained a strong focus on credit geopolitical tensions influenced market conditions, quality, ensuring that our lending practices remained impacting financial institutions worldwide. Allegacy sound and responsible. The global economic environment in 2024 was a mix stakeholders. Liquidity and Capital Management of resilience and uncertainty, with inflation easing demonstrated resilience and adaptability, navigating these complexities with confidence and strategic 3. Deposits foresight. Member deposits continued to grow, highlighting our members’ commitment to saving and investing requirements, underscoring our Strategic Initiatives In 2024, we continued to focus ” gratitude to our members for their trust and loyalty. Your support is the cornerstone of our success. I also want to thank our dedicated team for their hard work and commitment to excellence. Thank you for being a part of the Allegacy family. We look forward to another year of shared success and prosperity. Sincerely, Tracey Beck Treasurer, Board of Directors Allegacy Federal Credit Union on strategic initiatives that enhance our financial performance and member experience. These initiatives included: 1. Community Engagement Our commitment to the communities we serve remained unwavering. We strengthened Financial Performance with Allegacy. Our competitive rates and member- Our financial performance in 2024 was marked by centric approach played a key role in this growth. our community partnerships and launched new 4. Net Income positive social impact. several key achievements: 1. Asset Growth Our net income remained strong, supported by e experienced steady growth in our total assets, W effective cost management, diversified revenue reflecting our members’ trust and confidence in streams, and continued investment in technology Allegacy. Our strategic initiatives and prudent and innovation. This financial health enables us financial management contributed to this positive to reinvest in our members, communities, and 10 programs to support local initiatives and drive 2. Sustainable Growth We prioritized sustainable growth by adopting environmentally and socially responsible practices. Our efforts in this area reflect our dedication to 11
Consolidated Statements of Financial Income As of December 21, 2024 and 2023 Consolidated Statements of Financial Condition As of December 21, 2024 and 2023 2024 2023 Assets Cash Investments Loans to members (net of reserve) Land, Property, and Equipment, net NCUSIF Deposit Other Assets 293,472,302 177,335,056 149,091,897 203,793,436 1,810,657,207 1,762,405,111 37,961,673 38,515,638 17,387,148 17,242,936 Total Assets $2,362,020,574 53,450,347 41,850,893 $2,241,143,070 Liabilities and Members’ Equity Members’ Share and Savings Accounts Other Liabilities Members’ Equity Total Liabilities and Members’ Equity 1,993,364,412 1,884,926,371 104,051,453 244,377,518 Interest on Loans Interest on Investments 107,781,828 15,849,494 Total Interest Income 123,631,322 Dividend on Members’ Share and Savings Accounts Interest on Borrowed Funds 37,998,054 25,735,050 2,679,984 3,567,398 Net Interest Income 82,953,284 Provision for Loan Losses 4,776,134 Net Interest Income after Provision for Loan Losses Non-interest Income Total Non-interest Expenses 78,177,150 49,994,210 90,927,067 16,122,148 107,049,215 77,746,767 2,904,476 108,410,117 74,842,291 44,074,673 92,604,067 Net Income Before Non-controlling Interest Net Loss Attributed to Non-controlling Interest 19,711,243 (2,592,714) 26,312,897 (1,926,507) Net Income $17,118,529 111,839,181 264,604,709 2024 2023 $ 2,362,020,574 $2,241,143,070 $24,386,390 FINANCIAL HIGHLIGHTS | 2019-2024 Assets Loans Loans Savings Dividends 2019 $1,636,541,438 2019 $1,190,300,898 2019 $1,407,746,878 2019 $10,966,867 2020 $1,790,315,912 2020 $1,365,402,129 2020 $1,536,115,218 2020 $8,195,727 2021 $2,005,076,058 2021 $1,412,423,311 2021 $1,739,766,748 2021 $3,656,213 2022 $2,138,121,912 2022 $1,657,074,224 2022 $1,794,713,760 2022 $5,738,684 2023 $2,241,143,070 2023 $1,762,170,161 2023 $1,884,926,371 2023 $25,735,050 2024 $2,362,020,574 2024 $1,810,657,207 2024 $1,993,364,412 2024 $37,998,054 12 13
PERSONAL BANKING as of December 31, 2024 ! NEW AUTOMOBILE LOANS 14. 2%! ase incre WE’RE GROWING! NEW! Memberships 12,421 TRADITIONAL FIRST MORTGAGE 202 homes for $63,030,025 8,175 automobiles for $257,583,063 Total Memberships 176,425 126,531 WebBanking Users 11,932 New WebBanking Users 213,817 563,193 Remote Deposits Bill Payment MORTGAGE ELIMINATOR LOANS 139 homes for $18,541,16 56,037 55,140 155,941 35,271 31,802 Mobile App Users ITM Transactions Using Live Teller Calls Answered Welby Chat Assistance Chats Taken BUSINESS BANKING 1,555 2024 Metrics (record-breaking year) $264,671,371 Invested $10,050,813 2024 Highlights 3rd Place Overall Achievement in GDC among CFS Programs Total Gross Revenue KEYSTONE AWARD 62.6% Recognized for Outstanding Performance in Investment Services withthe highest ratio of GDC per billion dollars of total deposits Recurring Revenue 14 45 54 New Small Business Deposit Accounts FINANCIAL PLANNING GROUP Unique Small Business Borrowers New Small Business Loans (EOY balance of $12.74M) 6 (plus 75 business credit cards) 370 Affordable Housing Units Committed to Finance Gold Pacesetters ATRIA WEALTH SOLUTIONS The parent company of our brokerdealer, CUSO Financial Services, L.P., made the strategic decisions to align with LPL Financial LLC, a recognized leader in the wealth management industry. This acquisition will be completed on May 16, 2025. 143 115 239 New Commercial Deposit Accounts Unique Commercial Borrowers New Commercial Loans (EOY balance of $18.29M) 175 New Houses Financed 15
FINANCIAL COACHES CERTIFIED 103 VOLUNTEER OPPORTUNITES CREATED Expanded our team of Certified Credit Union Financial Counselors to meet the needs of our members in all markets. 10 120 Senior Services Meals on Wheels, Second Harvest Food Bank, A Bed and a Book, DW Golf Tournament, Community Tech Night, Street Cleaning, Clemmons Community Day, Hispanic League Fiesta, Juneteenth FINANCIAL COACHING SESSIONS VOLUNTEER HOURS LOGGED Allegacy offered 1:1 confidential sessions with members to address their financial health needs in the areas of budgeting, credit and debt, and saving. With a volunteer hour valued at $33.49, the economic impact of our volunteer efforts across our communities totals $97,824. EDUCATIONAL EVENTS Engagement with Student-run Credit Union, high schools, universities, employer groups, and community organizations. 3572 Community Impact Report: Community Wellbeing FINANCIAL EDUCATION HOURS Deliverd via in-person and virtual workshops, podcasts, livestreams, 1:1 coaching, financial challenges, and digital tools. Supporting members through financial training + coaching Making an impact through volunteering + giving DOLLARS RAISED FOR CANCER SummerLark benefitting the Cancer Patient Support Program and DW Don’t Wait Golf Tournament benefitting Cancer Services Inc. 2921 $176k COMMUNITY EVENTS ATTENDED 60 MLK Breakfast, Hispanic League Fiesta, Juneteenth, King Fest, Greensboro Fun Fourth, Kernersville Spring Folly, WS Pride, Common Heart Hunger Walk, REACH Women’s Conference, Christmas in Davidson ENRICH SESSIONS 1935 DOLLARS REINVESTED IN THE COMMUNITY Users engaged with educationalvarticles, videos, live webinars, and interactive tools to address financial stress and their unique needs. Ronald McDonald House®, American Heart Association, SummerLark, Novant Foundation, Second Harvest Food Bank, Hurricane Helene Diaster Relief, Common Heart, Charlotte-Mecklenburg Police Foundation. AWARDS & RECOGNITIONS Allegacy was selected by the Carolinas Credit Union League for: FIRST PRIZE: Dora Maxwell Social Responsibility Award This award is given to credit unions with over $1B in assets and exhibit great social reponsibility in their community. Allegacy was recognized for helping older adults live with dignity through our partnership with Senior Services, Inc. FIVE-STAR SUPERIOR RATING For 56 quarters in a row, Allegacy has received a five-start rating from BauerFinancial! This consistent performance highlights our strong financial stability and reliability. HONORABLE MENTION: Desjardins Financial Education Award for our leadership in promoting financial education through play to foster youth and beyond supporting Crossnore Communities for Children. ALLEGACY RECEIVES NEWSWEEK MAGAZINE HONOR Newsweek named Allegacy one of America’s Best Regional Banks and Credit Unions for three consecutive years honoring our commitments to financial excellence and our positive impact on our communities. Cathy Pace and the Allegacy team deserve much credit for these awards. GRANT Allegacy received a grant from the National Credit Union Foundation to stand up a year-long financial education program to support young adults, ages 16-21, who will be aging out of foster care, to promote financial independence. $525k SCHOLARSHIPS 2024 KEY ACCOMPLISHMENTS Delivering greater impact for community partners, deeper engagement for team members, and brand awareness for Allegacy across our footprint. In Q2, Allegacy received 83 applications from students across our footprint awarding nine scholarhsips totaling $14,500. We celebrated the winners and their parents at a reception held in their honor. TEAM MEMBERS Allegacy team members completed the FinHealth Survey to assess their financial health and determine next steps. We launched the Employee Hardship Fund to support team members and promoted saving for short- and long-term goals. HEALTHY HABITS PHILANTHROPY 16 70 The Allegacy Foundation continued its annual grant cycle, awarding $30k to non profits within our communities that engage in work that advances our philanthropic priorities: education, food insecurity, health + wellbeing, and DEI. In April, we launched a four-week Healthy Financial Habits Challenge to promote incremental behavior changes related to living within your means, embracing delayed gratification, keeping debt at a manageable level, and normalizing conversations about money. 17
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