2017 Year in Review: Letter from the President/CEO

Happy New Year! It’s been another successful and busy year for Community 1st Credit Union. We began 2017 with $579 million in

assets, and thanks to our strong and empowered team we have continued to grow to over $615 million in assets with over 57,000

members. This growth wouldn’t be possible without you, our loyal members.

We pride ourselves in staying connected to our communities. In 2017, we participated in over 200 local events, donated over

$125,000 to local sponsorships, and provided over $40,000 in college scholarships. We also partnered with many local schools and

organizations to offer over 100 hours of financial education courses.

We have the right technology for today and tomorrow. In November, C1st was the first financial institution in Grinnell, IA to offer an

Interactive Teller Machine (ITM). An ITM offers extended banking hours and the ability to talk with a live member service representative

through cutting edge technology. We now have three ITMs in our network, with more coming in the future. In December, we launched

new digital wallet solutions including Apple Pay, Samsung Pay and Android Pay. We also made it even more convenient to contact us.

You can now reach a Member Service Representative via text @ 641.638.5015 and schedule an appointment with us by visiting

c1stcu.com.

We are here to improve the lives of our members. C1st was awarded a Financial Assistance Award grant in the amount of $596,000

from the Treasury Department CDFI (Community Development Financial Institutions) Fund in the fall. We were the only credit union in

Iowa and one of only 55 Credit Unions in the entire country to receive an award. With this grant we are creating an affordable,

alternative loan to be launched in 2018.

We’re always looking for ways to expand and improve. In December, we completed a renovation of our Ottumwa-South branch

(Richmond Ave.). In addition, last fall we began an extensive remodeling project to our branch in Centerville. The project will add

almost 1,000 square feet and has a June 2018 completion date. The upgrades include additional office space, an expanded

conference room, added restrooms, an employee break room and reconfigured teller and drive-up areas including a drive-up ITM.

We want our members to achieve financial success. In December, C1st Investment Services was launched through a strategic

partnership with CUNA Mutual. C1st now offers professional financial planners to help identify and meet your investment objectives.

You can take advantage of a wide range of investment products including stocks, bonds, mutual funds, annuities, tax-deferred

investments and more.

We are creating unique and fun experiences. For the second year in a row, Community 1st Credit Union was named a Top Workplace in

Iowa, moving up nearly 15 spots from last year! The results of our employee survey prove we have something special going on here.

Thank you again for your membership and for your continued investment in your financial cooperative. I wish you all a wonderful

2018!

Sincerely,

Greg Hanshaw, President/CEO

A Letter from the Board Chairman

C1st Member/Owners:

Community 1st Credit Union has been in business for 81 years, and we have had another successful year! I am happy to

report we are stronger than ever. We have 16 branches in 14 communities and have grown to over $615 million in assets,

serving over 57,000 members. Community 1st Credit Union remains financially strong and we look forward to continued

growth in 2018.

In 2017, C1st staff successfully completed multiple projects, including:

Developed and launched a “bump up” CD product

Launched a Drive-Up Interactive Teller Machine (ITM) in Grinnell.

Launched C1st Investment Services

Introduced Samsung Pay and Android Pay

Developed a Project Management Team

Received a grant from the Treasury Department CDFI (Community Development Financial Institution) to develop a

new loan product.

Received Top Workplace in Iowa award

Remodeled the Ottumwa-South (235 Richmond Ave.) branch.

Kicked off a major remodel project for the Centerville branch.

During 2017, the Credit Union board and management team worked hard to develop a strategic plan that supports the

Mission, Vision and Core Values of our credit union. This strategic plan is full of enhancements for the Credit Union, and the

C1st team is excited to share it with our members.

The board and management team continue to think of new ways to improve your credit union. The entire Board of Directors

would like to thank you, the owner/member, for your business and making our credit union successful. We are excited and

confident about the future of Community 1st Credit Union! Please feel free to contact me or other board members with any

questions or comments. We are here to serve you.

Thank you - for the Board,

John Mayberry

Board Chairman

A Letter from the Audit Committee Chairman

From Your Audit Committee:

The Audit Committee acts as the “watchdog” of the credit union to protect and safeguard member assets. Responsibilities include reviewing the

outside audits conducted at the credit union, monitoring of policies established in accordance to law for compliance, discussing concerns of the

credit union that may arise, evaluating financial statements and reviewing Board of Director meeting minutes.

The Audit Committee meets once a month. Members of the Audit Committee are: Anne Leathers (Chairman), Lowell McClure, and Carolyn Walker

(Secretary).

The Audit Committee continues to use Petersen & Associates to conduct the external annual audit of the credit union. Your Audit Committee

considers all comments from the C.P.A. firm, State and Federal Auditors, as well as our credit union members so as to insure that your credit union is

financially sound.

Respectfully Submitted,

Anne Leathers

Audit Committee Chairman

A Letter from the Credit Committee Chairman

The Credit Committee has two responsibilities – to serve the needs of our membership and protect your investment in Community 1st

Credit Union. We acknowledge the value and importance of being member owned! In fact, our credit union is a combination of

committees, Board of Directors, administration and members. The credit union committees and the Board of Directors work directly for

the members, volunteering their time and effort to ensure high quality service and products.

The Credit Committee meets every quarter in January, April, July, and October prior to the regular board meeting. The committee

consists of three members of the board (Edith Cabrera-Tello, John Mikelson and Rex Stewart) and two members of the management

team (Teri Ortgies and Jim Holle). It is the responsibility of the credit committee to determine the loan policies and procedures and

bring those items to the Board of Directors. C1st continues to offer competitive, diversified loans, including auto, home equity,

mortgage, personal and business/ag loans.

On December 31, 2017, C1st had $544,860,412 in loans, representing a positive year. Also, monthly deposits and net income has

increased. Net income for 2017 was $3,607,598. Members continue to receive the best possible rate, saving a significant amount in

interest. We have made enhancements to mortgage loan information online. This strategy allows our members to obtain detailed

mortgage loan history. C1st also continues to find additional ways to secure debit and credit cards and decrease delinquency.

In a perfect world, getting a loan should be as simple as walking in to see the loan officer, signing your name and walking out with the

money. Government regulations, prior credit history and privacy laws make lending far more difficult than that. The Credit Committee

continually strives to minimize the complexity of borrowing money.

Thank you for investing your money, trust, faith and business in Community 1st Credit Union. Investing in us allows us to give more back

to our communities, such as giving $42,000 in scholarships to local high school seniors and launch new products/services, such as the

new C1st Investment Services options. We will continue to serve you in the spirit of the credit union community. By voluntarily devoting

time and effort to improve the credit union, the Credit Committee is an excellent example of members helping members. We do our

best to treat fellow members like we would like to be treated.

Edith Cabrera-Tello

Credit Committee

!

STATEMENT OF FINANCIAL CONDITION

AND

STATEMENT OF INCOME AND EXPENSES

!!

ACTUAL ACTUAL

12/31/2017 12/31/2016

ASSETS

Loans 544,860,412.20 510,599,669.61

Allowance for Loan Loss (3,504,574.16) (3,310,615.61)

Other Receivables 56,849.61 42,752.62

Cash in Bank 6,683,998.17 7,344,148.88

NCB 36,499,208.67 31,815,408.21

Investments 1,216,341.42 1,454,373.30

Prepaid Expenses 716,056.16 633,230.61

Loans Available for Sale 2,798,159.87 1,284,752.05

Fixed Assets 17,988,935.30 18,748,500.91

Accrued Income 2,449,558.28 2,199,461.53

Other Assets 12,195,545.06 9,108,335.27

TOTAL ASSETS 621,960,490.58 579,920,017.38

LIABILITIES

Borrowed Funds 13,000,000.00 13,000,000.00

Accounts Payable 3,783,816.01 4,679,017.71

Other Liabilities 1,236,002.09 1,096,819.88

Payrolls 0.00 0.00

Accrued Dividends 0.00 0.00

Accrued Taxes 484,085.47 460,007.92

Accrued Expenses 193,957.40 192,287.05

Shares 380,352,968.78 351,141,954.48

Certificates 167,095,337.04 157,143,204.64

TOTAL LIABILITIES 566,146,166.79 527,713,291.68

EQUITY

Equity 52,206,725.70 49,507,298.75

Net Income 3,607,598.09 2,699,426.95

TOTAL EQUITY 55,814,323.79 52,206,725.70

TOTAL LIABILITIES & EQUITY 621,960,490.58 579,920,017.38

0.00 0.00

12/31/17

Community 1st Credit Union

Statement of Condition

YTD YTD

12/31/17 12/31/16

Income

Loan Income 24,445,158.97 22,615,014.46

Investment Income 363,479.72 75,109.71

Fees/ Charge Income 7,214,620.81 6,794,997.78

Miscellaneous Operating Income 1,376,132.71 1,267,537.63

TOTAL INCOME 33,399,392.21 30,752,659.58

Expenses

Employee Compensation 9,746,919.96 9,143,325.35

Employee Benefits 3,298,487.31 2,893,391.99

Education & Travel 422,469.97 443,895.89

Association Dues 92,920.90 88,815.14

Office Occupancy 1,916,054.94 1,661,914.25

Furniture & Equipment Mtc 1,130,240.51 842,637.10

Stationary & Supplies 664,194.00 806,222.50

Insurance 153,924.51 150,482.31

Depreciation 2,066,823.16 1,901,636.79

Miscellaneous Expense 2,485.28 (609.36)

Promotion 1,341,539.70 1,347,457.29

Loan Service Expense 720,381.30 654,366.40

Supervision/ Exam Fees 131,972.50 109,775.62

Outside Services 2,063,830.70 2,047,557.18

Provision Expense 1,682,651.00 2,020,820.00

Cash Over/ Short (1,262.55) 2,465.95

Interest Expense 222,250.31 219,253.09

Miscellaneous Operating Exp. 189,840.09 311,505.62

Dividend Expense 3,947,778.72 3,329,689.80

Gain / loss on sale of assets (32,858.19) (2,870.28)

TOTAL EXPENSE 29,760,644.12 27,971,732.63

Extraordinary Expense 31,150.00 81,500.00

NET INCOME 3,607,598.09 2,699,426.95

Community 1st Credit Union

Statement of Income

12/31/17

BOARD OF DIRECTORS MEETING

Market on Main

January 23, 2017 at 6:00 PM

Members of the Community 1st Credit Union held their 80th Annual Meeting at Market on Main in Ottumwa.

Chairman D. Dave Boyer called the meeting to order at 6:05 p.m. Quorum was reached with 61 people in attendance.

Minutes of the last annual meeting reviewed. A motion was duly made and seconded to approve the minutes after making

corrections. M/C

D. Dave Boyer introduced the Board Members and the Audit committee members.

Outgoing board member Jason Eubanks was presented with a plaque for his 10 years of service.

Staff members introduced themselves along with job titles.

Old Business: President and CEO Greg Hanshaw reviewed highlights from 2016 and some things to look forward to in 2017.

New Business: The 2018 Annual meeting date was set to 22 January 2018.

Election Results: Rex Stewart , Anne Leathers, and Dwain Russell will serve a 3 year term. John Mickelson will serve a 1

year term.

2017 C1st Board of Directors:

John Mayberry – Chairman Edith Cabrera-Tello

Tim Elliott – Vice Chairman Lowell McClure

D. Dave Boyer – Chief Financial Officer John Mikelson

Dwain Russell – Secretary Anne Leathers

Rex W. Stewart

A motion was duly made and seconded to adjourn. M/C Adjourned at 7:00 p.m.

D. Dave Boyer, Chairman John Mayberry, Vice Chairman

Community 1st Credit Union Branch Locations

1420 S. Clinton Street

301 E. Franklin

1030 Sierra Dr. N.E.

999 N. 18th

1934 Court Avenue

2501 W. Burlington

205 West Street

300 S. Jefferson Way

1008 W. Bell Ave., Suite 103

1800 E. Washington Street

1311 A. Ave. West

739 Pennsylvania Avenue

235 Richmond Avenue

1940 Venture Drive

500 Main Street

303 S. 2nd Avenue

2018 Board of Directors Candidates

John Mayberry: A member since 1982 and resides in Bloomfield, IA with his wife

Carol. He is retired from John Deere Ottumwa Works and currently employed at Mid-States Mfg. in Milton, IA. Currently, John is Chairman of the C1st Board of Directors. He is a member of the Davis County Fair Board and Twin State Truck/Tractor Pullers Association.

John Mickelson: Retired after a career in the military and a resident of the Columbus

Junction area. John is a board member of the Iowa Able Foundation and active in the Iowa City VA Medical Research Foundation. John was appointed to the C1st Board of Directors in January 2016.

Bianca Myers: Director of Marketing & Community Relations of Indian Hills Community

College. She recently received her PhD in Education Leadership & Administration from Iowa State University. Bianca has been a C1st member for over 10 years and resides in Ottumwa with her husband, Chris, and young son.

Courtney Jones: Manager of Donor Services at Mississippi Valley Regional Blood

Center. Courtney has a Masters in Health & Human Performance/ Exercise Science from Oklahoma State University. She has been a member of C1st for 5 years and resides in Ottumwa with her husband, Austin and young daughter. Courtney is a former President of the Lions Club in Ottumwa, IA and member of United Way’s Reading Buddies program.