2020-11-03T11:06:12-06:00 2019-12-31 910189318 MOSS ADAMS LLP 2882 PROSPECT PARK DR STE 300 RANCHO CORDOVA CA 95670 990 2019-01-01 941189841 SCHOOLS FINANCIAL CREDIT UNION SCHO 9165695400 1485 RESPONSE ROAD NO 126 SACRAMENTO CA 95815 TIMOTHY MARRIOTT CEO 9165695400 2020-10-19 1 WENDY CAMPOS P00448102 9165038100 2020-10-19 172.9.161.112 2020-10-19 20:46:13 PD P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 2CA4604677747A1B8287DC7DD1B2F222DAF5CAE3 2019 2021-04-22 16:20:28Z X TIMOTHY MARRIOTT 1485 RESPONSE ROAD NO 126 SACRAMENTO CA 95815 101993904 0 X WWW.SCHOOLS.ORG X 1933 CA TO PROVIDE MEMBERS WITH BETTER VALUE AND OUTSTANDING SERVICE. X 6 6 390 23 482497 -508738 0 0 76673363 88033996 9297427 12757155 453586 470674 86424376 101261825 48387 43655 0 0 24282636 27295989 0 0 0 34485982 41915219 58817005 69254863 27607371 32006962 1988079825 0 1759012272 0 229067553 0 X TO PROMOTE THRIFT AND SAVINGS AMONG MEMBERS, TO CREATE A SOURCE OF CREDIT FOR MEMBERS AT INTEREST RATES SET BY THE BOARD OF DIRECTORS, AND TO PROVIDE MEMBERS WITH AN OPPORTUNITY TO USE AND CONTROL THEIR MONEY ON A DEMOCRATIC BASIS IN ORDER TO IMPROVE THEIR ECONOMIC AND SOCIAL CONDITIONS. 0 1 SCHOOLS FINANCIAL CREDIT UNION (SCHOOLS FINANCIAL) IS A MEMBER OWNED, NOT-FOR-PROFIT FINANCIAL COOPERATIVE DEDICATED TO SERVING THE FINANCIAL NEEDS OF ITS MEMBERS. ITS PURPOSE IS TO BE THE PRIMARY FINANCIAL INSTITUTION FOR COMMUNITY MEMBERS IN ITS SERVICE AREA. ITS MISSION IS TO PROVIDE MEMBERS WITH BETTER VALUE AND OUTSTANDING SERVICE.SCHOOLS FINANCIAL FOSTERS A CULTURE OF "PEOPLE HELPING PEOPLE" THROUGHOUT THE ORGANIZATION, AND ITS INTERACTION WITH MEMBERS EPITOMIZES THE STANDARDS OF ETHICAL BEHAVIOR. SCHOOLS FINANCIAL TREATS ALL MEMBERS WITH RESPECT AND DIGNITY AND PROVIDES SERVICES TO SAVERS AND BORROWERS IN A DEMOCRATIC FASHION. SCHOOLS FINANCIAL OFFERS ITS MEMBERS AN ECONOMIC ADVANTAGE COMBINED WITH COURTEOUS, COMPETENT, AND TIMELY SERVICE. IT VALUES OPEN, HONEST, TWO-WAY COMMUNICATION WITH ITS MEMBERS. SCHOOLS FINANCIAL SOLICITS INPUT FROM ITS MEMBERS TO FACILITATE COMMUNICATION AND TO MEASURE SERVICE QUALITY. SCHOOLS FINANCIAL IS COMMITTED TO CONSTANTLY IMPROVING ITS OVERALL OPERATIONAL EFFICIENCY, ITS SERVICE DELIVERY CONVENIENCE AND THE LEVEL OF PROFESSIONAL SERVICE IT PROVIDES TO ITS MEMBERS. IT MEETS ITS MEMBERS' EXPECTATIONS FOR PRICE ADVANTAGE, QUALITY SERVICE AND CONVENIENCE BY REMAINING FINANCIALLY STRONG AND VIABLE.SCHOOLS FINANCIAL COMMUNICATES ITS SERVICES IN A MEANINGFUL WAY SO THAT MEMBERS, POTENTIAL MEMBERS, LEGISLATORS, REGULATORS AND THE COMMUNITY-AT-LARGE UNDERSTAND AND APPRECIATE THE UNIQUE ROLE THAT MEMBER-OWNED FINANCIAL COOPERATIVES PLAY IN THEIR LIVES. ITS COMMITMENT TO MEMBERS IS CONSISTENT WITH ITS PRINCIPLES OF "FOR SERVICE, NOT FOR PROFIT, NOT FOR CHARITY AND ITS PHILOSOPHY OF "PEOPLE HELPING PEOPLE". THIS COMMITMENT REPRESENTS THE SOUND BUSINESS PRACTICES THAT ENSURE THE FINANCIAL STRENGTH OF SCHOOLS FINANCIAL FOR ITS MEMBERS. AS OF DECEMBER 31,2019, SCHOOLS FINANCIAL HAD ELEVEN BRANCHES, 159,881 MEMBERS, TOTAL ASSETS OF $2,150,075,672, TOTAL OUTSTANDING LOANS OF $1,633,906,634, AND TOTAL DEPOSITS OF $1,864,796,531. 0 0 0 0 0 0 0 1 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 0 1 0 0 0 0 0 1 97668 0 1 390 1 1 1 0 0 0 0 0 0 0 X 6 6 0 0 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 CA X TODD DEVOOGD 9165695400 1485 RESPONSE ROAD SUITE 126 SACRAMENTO CA 95815 MARIE B SMITH CHAIR 1.00 X X 0 0 0 TERESA MATISTA VICE CHAIR 1.00 X X 0 0 0 DOUGLAS SATO TREASURER 1.00 X X 0 0 0 DOLORES BLEEKMAN SECRETARY 1.00 X X 0 0 0 LUTHER NOLEN DIRECTOR 1.00 X 0 0 0 EMILIO MARTINEZ DIRECTOR 1.00 X 0 0 0 GREG SMITH DIRECTOR THROUGH 9/19 1.00 X 2338 0 0 TIMOTHY MARRIOTT PRESIDENT/CEO 45.00 X 826080 0 849120 TODD DEVOOGD SVP FINANCE/CFO 45.00 X 279664 0 35145 TOM KUANG SVP INFORMATION SERVICES/CIO 40.00 X 232551 0 32322 STEVE LANGLEY SVP MEMBER SERVICES/CHIEF RETAIL OFFICER 40.00 X 248270 0 32110 ERIN FRITZ VP PAYMENT SYSTEMS 40.00 X 177352 0 27197 CATHY GRIMES VP MARKETING 40.00 X 202192 0 22394 LISA MACKAY VP HUMAN RESOURCES AND COM 40.00 X 208652 0 21916 ERIK SORDAHL VP CONSUMER LENDING 40.00 X 200491 0 20387 JASON STILES VP REAL ESTATE LENDING 40.00 X 210630 0 29375 2588220 0 1069966 41 0 1 0 DIEBOLD INC 5995 MAYFAIR ROAD NORTH CANTON OH 44720 ATM SERVICING 487965 STYSKAL WIESE & MELCHIONE LLP 550 NORTH BRAND BLVD SUITE 550 GLENDALE CA 91203 ATTORNEYS 300083 DFS - DOCUMENT FULFILLMENT SERVICES 2930 RAMONA AVE 100 SACRAMENTO CA 95826 STATEMENT AND TAX FORM PRINTING SERVICES 268214 CLEAR CHANNEL OUTDOOR 401 SLOBE AVENUE SACRAMENTO CA 95815 ADVERTISING 209689 ABSOLUTE ADJUSTMENT SERVICE INC 4522 AUBURN BLVD SACRAMENTO CA 95841 COLLECTION SERVICES 179032 14 LOAN INTEREST INCOME 522100 62673007 62673007 FEES & SERVICE CHARGE INCOME 522100 19703947 19703947 OTHER INCOME 522100 5022228 4539731 482497 GAIN ON SALE OF LOANS HELD FOR SA 522100 634814 634814 88033996 8792499 8792499 1164130 693456 470674 470674 470674 4002279 1000 5800 32823 3996479 -31823 3964656 3964656 101261825 87551499 482497 13227829 20855 22800 2537600 18638997 1876956 2644025 1598411 468071 80842 146142 637085 1208089 4086810 2464914 59860 348042 14113683 735434 259322 OUTSIDE SERVICES 8139424 PROVISION FOR LOAN LOSS 5700000 EQUIPMENT REPAIR & MAIN 557087 OFFICER LOAN VALUATION 538634 2371780 69254863 133204810 0 1000000 0 0 2978463 0 7877776 0 0 1476501507 0 0 1829582 0 0 0 19408888 0 288084062 0 0 0 0 57194737 0 1988079825 0 14448195 0 2039769 0 1742524308 0 1759012272 0 X 0 0 0 0 229067553 0 229067553 0 1988079825 0 X 32006962 4589524 -265664039 X 0 1 X 1 0 0 1 X 0 X 101955280 693455 693455 101261825 0 101261825 69948318 693455 693455 69254863 0 69254863 PART IV, LINE 2B: THE ESCROW ACCOUNTS HOLD AMOUNTS TO BE USED TO PAY THOSE MEMBERS' HOMEOWNERS' INSURANCE PREMIUMS AND PROPERTY TAXES WHEN DUE AND ARE COLLECTED WITH THE MEMBERS' MORTGAGE PAYMENTS. PART X, LINE 2: THE CREDIT UNION IS EXEMPT, BY STATUTE, FROM FEDERAL INCOME TAXES. THE CREDIT UNION IS A STATE-CHARTERED CREDIT UNION DESCRIBED IN INTERNAL REVENUE CODE SECTION 501(C)(14). AS SUCH, THE CREDIT UNION IS EXEMPT FROM FEDERAL TAXATION OF INCOME DERIVED FROM THE PERFORMANCE OF ACTIVITIES THAT ARE IN FURTHERANCE OF ITS EXEMPT PURPOSES. FASB ASC TOPIC 740, INCOME TAXES, PROVIDES GUIDANCE FOR HOW UNCERTAIN TAX POSITIONS SHOULD BE RECOGNIZED, MEASURED, DISCLOSED AND PRESENTED IN THE FINANCIAL STATEMENTS. THIS REQUIRES THE EVALUATION OF TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN THE COURSE OF PREPARING THE CREDIT UNION'S TAX RETURNS TO DETERMINE WHETHER THE TAX POSITIONS ARE MORE LIKELY THAN NOT TO BE SUSTAINED WHEN CHALLENGED OR WHEN EXAMINED BY THE APPLICABLE TAX AUTHORITY. TAX POSITIONS NOT DEEMED TO MEET THE MORE-LIKELY-THAN-NOT THRESHOLD WOULD BE RECORDED AS A TAX EXPENSE AND LIABILITY IN THE CURRENT YEAR. FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018, MANAGEMENT HAS DETERMINED THAT THERE ARE NO MATERIAL UNCERTAIN TAX POSITIONS. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES RECLASSED FROM FUNCTIONAL EXPENSES 693,455. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES RECLASSED TO STATEMENT OF REVENUE 693,455. 1 SACRAMENTO FOOD BANK AND FAMILY SERVICES 3333 3RD AVENUE SACRAMENTO CA 95817 943315566 501(C)(3) 4000 2722 ACTUAL COST BOTTLED WATER RUN TO FEED THE HUNGRY LOS RIOS COLLEGES FOUNDATION 1919 SPANOS COURT SACRAMENTO CA 95825 942506591 501(C)(3) 8000 ARC STEM BUILDING CAPITAL CAMPAIGN RICHARD MYLES JOHNSON FOUNDATION 2855 E GUASTI ROAD SUITE 600 ONTARIO CA 917611250 956141173 501(C)(3) 6133 GENERAL SUPPORT 3 0 ABC10 TEACHER OF THE YEAR 1 5000 CLASSROOM MATERIALS CLASSROOM MATERIALS 12 12000 CLASSROOM MATERIALS EDUCATION MATTERS GRANTS 17 4800 1000 ACTUAL COST CLASSROOM MATERIALS PART I, LINE 2: SCHOOLS FINANCIAL PARTNERS WITH SACRAMENTO'S CHANNEL 10 TO PROVIDE AWARDS TO EXCEPTIONAL TEACHERS THAT CHANNEL 10 HAS DESIGNATED AS TEACHERS OF THE MONTH OR TEACHERS OF THE YEAR. SCHOOLS FINANCIAL'S EDUCATION MATTERS GRANTS ARE DEVISED TO HELP CLASSROOM TEACHERS AFFORD THE SUPPLIES THEY NEED FOR THEIR STUDENTS TO LEARN EFFECTIVELY AND FURTHER EVIDENCE SCHOOLS FINANCIAL'S COMMITMENT TO THE FIELD OF EDUCATION. SCHOOLS FINANCIAL IS ONE OF THE SPONSORS OF THE ANNUAL RUN TO FEED THE HUNGRY WHICH RAISES FUNDS FOR THE SACRAMENTO FOOD BANK; THIS IS A WAY FOR SCHOOLS FINANCIAL TO GIVE BACK TO THE COMMUNITY. X 1 1 X X X 0 1 0 TIMOTHY MARRIOTT PRESIDENT/CEO 581896 0 174025 0 70159 0 828012 0 21108 0 1675200 0 0 0 TODD DEVOOGD SVP FINANCE/CFO 245216 0 23387 0 11061 0 19410 0 15735 0 314809 0 0 0 TOM KUANG SVP INFORMATION SERVICES/CIO 196035 0 17720 0 18796 0 16956 0 15366 0 264873 0 0 0 STEVE LANGLEY SVP MEMBER SERVICES/CHIEF RETAIL OFF 212053 0 20245 0 15972 0 17776 0 14334 0 280380 0 0 0 ERIN FRITZ VP PAYMENT SYSTEMS 148959 0 14363 0 14030 0 12863 0 14334 0 204549 0 0 0 CATHY GRIMES VP MARKETING 184078 0 17052 0 1062 0 14079 0 8315 0 224586 0 0 0 LISA MACKAY VP HUMAN RESOURCES AND COM 180671 0 17070 0 10911 0 14323 0 7593 0 230568 0 0 0 ERIK SORDAHL VP CONSUMER LENDING 168120 0 14816 0 17555 0 12818 0 7569 0 220878 0 0 0 JASON STILES VP REAL ESTATE LENDING 187126 0 17370 0 6134 0 15036 0 14339 0 240005 0 0 0 PART I, LINE 1A THE CREDIT UNION REIMBURSES BOTH THE DIRECTORS AND THEIR SPOUSES FOR THE COSTS INCURRED IN ATTENDING CREDIT UNION RELATED CONFERENCES/MEETINGS. THE SPOUSAL REIMBURSEMENT, IF IT IS IN EXCESS OF $600, IS INCLUDED ON A 1099 FILED IN THE NAME OF THE SPOUSE. SPOUSAL TRAVEL FOR OFFICERS IS REPORTED AS TAXABLE INCOME WHEN THERE IS NOT A BONA FIDE BUSINESS PURPOSE. PART I, LINE 4B THE CREDIT UNION HAS A NONQUALIFIED DEFERRED COMPENSATION PLAN IN PLACE FOR CERTAIN EXECUTIVES AS DESCRIBED IN SECTION 457(F). THE PAYOUT CALCULATIONS ARE PERFORMED UPON RETIREMENT AND BASED ON COMPENSATORY AMOUNTS CALCULATED PER A FORMULA APPROACH TAKING INTO ACCOUNT THE PRIOR FIVE YEARS COMPENSATION AMOUNTS. AMOUNTS ACCRUED UNDER SUCH PLAN ARE PROPERLY REFLECTED IN PART VII, COLUMN F, AND IN SCHEDULE J, PART II, COLUMN C. ONE PERSON RECEIVED A CONTRIBUTION DURING 2019 AND IT IS CORRECTLY REPORTED IN PART VII, AS REPORTABLE COMPENSATION, AND SCHEDULE J, PART II, COLUMN (C). ADDITIONAL TERMS AND CONDITIONS OF SUCH PLAN ARE AVAILABLE TO THE IRS UPON REQUEST. TIMOTHY MARRIOTT OFFICER SPLIT-DOLLAR LIFE ARRANGEMENT X 4600000 0 0 1 1 TODD DEVOOGD OFFICER SPLIT-DOLLAR LIFE ARRANGEMENT X 1225000 0 0 1 1 STEVE LANGLEY KEY EMPLOYEE SPLIT-DOLLAR LIFE ARRANGEMENT X 1975000 0 0 1 1 PART II: THE BALANCES REPORTED IN PART II, COLUMN (F) ARE REPORTED AT $0 AS THE CREDIT UNION TRANSFERRED THE OUTSTANDING BALANCES AS OF DECEMBER 31, 2019 FOR THE SPLIT-DOLLAR LIFE ARRANGEMENTS TO THE SURVIVING CREDIT UNION AS A RESULT OF THE MERGER. THE BALANCES TRANSFERRED AT DECEMBER 31, 2019 WERE AS FOLLOWS:TIMOTHY MARRIOTT: $4,349,382TODD DEVOOGD: $1,215,188STEVE LANGLEY: $1,946,780PLEASE ALSO SEE SCHEDULE N. CASH/SAVINGS 2019-12-31 236280159 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) SAVINGS AND TEMPORARY CASH INVESTMENTS 2019-12-31 500340 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) ACCOUNTS RECEIVABLE, NET 2019-12-31 2294168 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) LOANS AND OTHER RECEIVABLES FROM DISQUALIFIED PERSONS 2019-12-31 7511350 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) NOTES AND LOANS RECEIVABLE, NET 2019-12-31 1629815184 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) PREPAID EXPENSES AND DEFERRED CHARGES 2019-12-31 2113807 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) FIXED ASSETS, NET OF ACCUMULATED DEPRECIATION 2019-12-31 19365479 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) PUBLICLY TRADED SECURITIES 2019-12-31 193230932 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) NCUIF DEPOSIT 2019-12-31 17339284 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) INVESTMENT IN LIFE INSURANCE 2019-12-31 24870390 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) FHLB COMMON STOCK 2019-12-31 7272600 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) ACCRUED INTEREST RECEIVABLE 2019-12-31 4642517 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) OTHER ASSETS 2019-12-31 4839462 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2019-12-31 -16895860 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) ESCROW OR CUSTODIAL ACCOUNT LIABILITY 2019-12-31 -2719242 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) CURRENT SHARES 2019-12-31 -1021412732 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) MONEY MARKET LIABILITY 2019-12-31 -520977614 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) IRA LIABILITY 2019-12-31 -80690928 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) DEFERRED COMPENSATION LIABILITY 2019-12-31 -3760842 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) CD LIABILITY 2019-12-31 -237954415 BOOK VALUE 951068595 SCHOOLSFIRST FEDERAL CREDIT UNION 15442 NEWPORT AVE TUSTIN CA 92780 501(A) 1 1 0 1 1 1 1 1 0 PART I, LINE 2E: PERSON(S) INVOLVED: TODD DEVOOGD, TOM KUANG, STEVE LANGLEY, TIM MARRIOT, TERESA MATISTA, MARIE SMITH PART I, LINE 2E: EXPLANATION OF INVOLVEMENT: LINE 2A: BECAME A DIRECTOR OR TRUSTEE OF THE SUCCESSOR ORGANIZATION: MARIE SMITH, TERESA MATISTA - VOTING MEMBERS OF THE SUCCESSOR BOARD OF DIRECTORS.LINE 2B: BECAME AN EMPLOYEE OF THE SUCCESSOR ORGANIZATION: TODD DEVOOGD, TOM KUANG, STEVE LANGLEY, AND TIM MARRIOTLINE 2D: RECEIVED, OR BECAME ENTITLED TO COMPENSATION OR OTHER PAYMENTS AS A RESULT OF THE MERGER: TODD DEVOOGD, TOM KUANG, STEVE LANGLEY, AND TIM MARRIOTT. THE COMPENSATION ARRANGEMENTS DISCUSSED BELOW DEPEND ON THE EMPLOYEES CHOOSING TO CONTINUE IN THEIR EMPLOYMENT IN THE YEARS AFTER THE MERGER DATE. CERTAIN PLANS ARE DISCLOSED AT THEIR MAXIMUM POTENTIAL VALUE, WITH THE LIKELY AMOUNTS BEING SIGNIFICANTLY LOWER.TIM MARRIOTT: MR. MARRIOTT WILL BE EMPLOYED BY SCHOOLSFIRST FEDERAL CREDIT UNION (FCU) FOR A 3-YEAR TERM BEGINNING ON THE MERGER DATE AT THE SAME BASE SALARY AND COMPARABLE BENEFITS AS CURRENTLY PROVIDED BY SCHOOLS FINANCIAL. MR. MARRIOTT WILL PARTICIPATE IN SCHOOLSFIRST FCU'S EXISTING SHORT-TERM (ANNUAL) AND LONG-TERM (3-YEAR) BONUS PLANS, ON A BASIS EQUIVALENT OR SIMILAR TO SCHOOLSFIRST FCU EXECUTIVES, WITH POTENTIAL TARGET AMOUNTS OF APPROXIMATELY $290,948 PER YEAR, WHICH COULD TOTAL ABOUT $1,163,792 AT THE END OF 3 YEARS. ACTUAL AMOUNTS MAY VARY BASED ON MR. MARRIOTT'S PERFORMANCE AGAINST INDIVIDUAL AND ORGANIZATIONAL GOALS.IF TERMINATED WITHOUT CAUSE DURING THESE 3 YEARS OR IF MR. MARRIOTT LEAVES FOR "GOOD REASON," MR. MARRIOTT WILL BE ELIGIBLE TO RECEIVE HIS UNPAID BASE SALARY AND TARGET BONUS AMOUNTS FOR THE REMAINING 3-YEAR TERM. THE MAXIMUM AMOUNT OF UNPAID BASE SALARY MR. MARRIOTT WOULD BE ELIGIBLE TO RECEIVE IS $1,745,688.IF MR. MARRIOTT VOLUNTARILY RESIGNS OR IS TERMINATED WITH CAUSE, HE WILL NOT BE ENTITLED TO ADDITIONAL SALARY OR BONUS AMOUNTS. MR. MARRIOTT'S EXISTING SCHOOLS FINANCIAL SPLIT DOLLAR LIFE INSURANCE PLAN WILL BE AMENDED TO VEST AS OF 3 YEARS AFTER THE MERGER INSTEAD OF IN 2028, WHICH WOULD PERMIT HIM TO BORROW UP TO A PRESENT VALUE OF $2,063,052 COMMENCING AT THE PRE-EXISTING RETIREMENT DATE IN 2028. IN EXCHANGE FOR THE EARLIER VESTING, MR. MARRIOTT WILL GIVE UP HIS PRE-EXISTING RIGHTS UNDER THE PLAN TO LEAVE HIS EMPLOYMENT UPON THE MERGER WITH THE FULL BENEFIT AMOUNT. MR. MARRIOTT WILL NOT BE ELIGIBLE FOR BENEFITS UNDER THE PLAN IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITH CAUSE OR HE VOLUNTARILY RESIGNS DURING THE 3-YEAR TERM.MR. MARRIOTT'S EXISTING SCHOOLS FINANCIAL SUPPLEMENTAL RETIREMENT PLAN AND AGREEMENT WILL BE TERMINATED AND LIQUIDATED WITHIN ONE YEAR AFTER THE MERGER, AT WHICH TIME MR. MARRIOTT WILL RECEIVE A PREVIOUSLY ACCRUED SUM OF APPROXIMATELY $3,039,000 RATHER THAN A GREATER AMOUNT UPON RETIREMENT IN 2028. THIS PLAN LIQUIDATION IS ALSO AT NO MATERIAL ADDITIONAL COST TO EITHER OF THE CREDIT UNIONS.TODD DEVOOGD: MR. DEVOOGD WILL RECEIVE RETENTION BONUSES CONTINGENT UPON STAYING WITH THE CONTINUING CREDIT UNION OF APPROXIMATELY $128,400 AT THE END OF 12 MONTHS AFTER THE MERGER DATE AND APPROXIMATELY $128,400 AT THE END OF 24 MONTHS AFTER THE MERGER DATE. IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITHOUT CAUSE BEFORE 24 MONTHS AFTER THE MERGER DATE, MR. DEVOOGD WILL BE ELIGIBLE TO RECEIVE ANY UNPAID AMOUNTS OF BOTH BONUSES. MR. DEVOOGD WILL NOT BE ENTITLED TO ANY UNPAID AMOUNTS IF HE IS TERMINATED WITH CAUSE OR VOLUNTARILY RESIGNS BEFORE 24 MONTHS AFTER THE MERGER DATE.MR. DEVOOGD'S EXISTING SCHOOLS FINANCIAL SPLIT DOLLAR LIFE INSURANCE PLAN WILL BE AMENDED TO VEST AS OF 2-YEARS FOLLOWING THE MERGER DATE INSTEAD OF IN 2034, WHICH WOULD PERMIT HIM TO BORROW UP TO A PRESENT VALUE OF $471,667 COMMENCING AT THE PRE-EXISTING RETIREMENT DATE IN 2034. IN EXCHANGE FOR THE EARLIER VESTING, MR. DEVOOGD WILL GIVE UP HIS PRE-EXISTING RIGHTS UNDER THE PLAN TO LEAVE HIS EMPLOYMENT UPON THE MERGER WITH THE FULL BENEFIT AMOUNT. MR. DEVOOGD WILL NOT BE ELIGIBLE FOR BENEFITS UNDER THE PLAN IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITH CAUSE OR IF HE VOLUNTARILY RESIGNS DURING THE 2-YEAR TERM.STEVE LANGLEY: MR. LANGLEY WILL RECEIVE RETENTION BONUSES CONTINGENT UPON STAYING WITH THE CONTINUING CREDIT UNION OF APPROXIMATELY $111,150 AT THE END OF 12 MONTHS AFTER THE MERGER DATE AND APPROXIMATELY $111,150 AT THE END OF 24 MONTHS AFTER THE MERGER DATE. IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITHOUT CAUSE BEFORE 24 MONTHS AFTER THE MERGER DATE, MR. LANGLEY WILL BE ELIGIBLE TO RECEIVE ANY UNPAID AMOUNTS OF BOTH BONUSES. MR. LANGLEY NOT BE ENTITLED TO ANY UNPAID AMOUNTS IF HE IS TERMINATED WITH CAUSE OR VOLUNTARILY RESIGNS BEFORE 24 MONTHS AFTER THE MERGER DATE.MR. LANGLEY'S EXISTING SCHOOLS FINANCIAL SPLIT DOLLAR LIFE INSURANCE PLAN WILL BE AMENDED TO VEST AS OF 2-YEARS FOLLOWING THE MERGER DATE INSTEAD OF IN 2026, WHICH WOULD PERMIT HIM TO BORROW UP TO A PRESENT VALUE OF $518,197 COMMENCING AT THE PRE-EXISTING RETIREMENT DATE IN 2026. IN EXCHANGE FOR THE EARLIER VESTING, MR. LANGLEY WILL GIVE UP HIS PRE-EXISTING RIGHTS UNDER THE PLAN TO LEAVE HIS EMPLOYMENT UPON THE MERGER WITH THE FULL BENEFIT AMOUNT. MR. LANGLEY WILL NOT BE ELIGIBLE FOR BENEFITS UNDER THE PLAN IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITH CAUSE OR HE VOLUNTARILY RESIGNS DURING THE 2-YEAR TERM.TOM KUANG: MR. KUANG WILL RECEIVE RETENTION BONUSES CONTINGENT UPON STAYING WITH THE CONTINUING CREDIT UNION OF APPROXIMATELY $103,800 AT THE END OF 12 MONTHS AFTER THE MERGER DATE AND APPROXIMATELY $103,800 AT THE END OF 24 MONTHS AFTER THE MERGER DATE. IF SCHOOLSFIRST FCU TERMINATES HIS EMPLOYMENT WITHOUT CAUSE BEFORE 24 MONTHS AFTER THE MERGER DATE, MR. KUANG WILL BE ELIGIBLE TO RECEIVE ANY UNPAID AMOUNTS OF BOTH BONUSES. MR. KUANG WILL NOT BE ENTITLED TO ANY UNPAID AMOUNTS IF HE IS TERMINATED WITH CAUSE OR VOLUNTARILY RESIGNS BEFORE 24 MONTHS AFTER THE MERGER DATE. FORM 990, PART III, LINE 3 THE ORGANIZATION IS MERGING WITH ANOTHER CREDIT UNION AS OF JANUARY 1, 2020. FORM 990, PART VI, SECTION A, LINE 4 THE ORGANIZATION APPROVED ARTICLES OF MERGER EFFECTIVE JANUARY 1, 2020 WITH SCHOOLSFIRST FEDERAL CREDIT UNION. FORM 990, PART VI, SECTION A, LINE 6 THE CREDIT UNION'S MEMBERS HAVE RIGHTS TO ELECT THE MEMBERS OF THE GOVERNING BODY. THE CREDIT UNION'S MEMBERS ALSO RECEIVE A SHARE OF THE ORGANIZATION'S PROFITS IN THE FORM OF CASH DIVIDENDS. FORM 990, PART VI, SECTION A, LINE 7A MEMBERS OF THE CREDIT UNION HAVE THE RIGHT TO ELECT ONE OR MORE MEMBERS OF THE ORGANIZATION'S GOVERNING BODY, WHETHER PERIODICALLY, OR AS VACANCIES ARISE, OR OTHERWISE. FORM 990, PART VI, SECTION A, LINE 7B MEMBERS OF THE CREDIT UNION HAVE THE RIGHT TO APPROVE THE GOVERNING BODY'S ELECTION AND REMOVAL OF MEMBERS OF THE GOVERNING BODY, AS WELL AS OTHER MATTERS THAT ARE SUBJECT TO THE APPROVAL OF MEMBERS OF THE CREDIT UNION AS THEY OCCUR. FORM 990, PART VI, SECTION B, LINE 11B THE EXECUTIVE COMMITTEE WILL REVIEW THE DRAFT OF THE FORM 990. THE COMPLETED FORM 990 WILL BE PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C THE CREDIT UNION HAS A WRITTEN CONFLICT OF INTEREST POLICY AND AN ANNUAL STATEMENT REGARDING CONFLICT OF INTEREST POLICY ("STATEMENT"). THE STATEMENT REQUIRES THE SIGNATORY TO ANNUALLY AFFIRM THAT HE/SHE HAS RECEIVED, READ, AND UNDERSTOOD THE CONFLICT OF INTEREST POLICY AND AGREES TO COMPLY WITH THE POLICY. THE STATEMENT ASKS A SERIES OF QUESTIONS DESIGNED TO REVEAL ANY POTENTIAL CONFLICTS OF INTEREST. THE SIGNATORY MUST EXPLAIN ANY POTENTIAL CONFLICTS OF INTEREST ON THE STATEMENT. THE MEMBERS OF THE BOARD OF DIRECTORS AND THE SUPERVISORY COMMITTEE, AS WELL AS THE CEO AND ALL OF THE VICE PRESIDENTS, MUST SIGN THE STATEMENT EACH YEAR. THE EXECUTIVE DEPARTMENT MAINTAINS A RECURRING EVENTS LIST TO ENSURE THAT THE ANNUAL STATEMENT REGARDING CONFLICT OF INTEREST POLICY IS SIGNED EVERY YEAR BY THE PERTINENT INDIVIDUALS. FORM 990, PART VI, SECTION B, LINE 15 PRESIDENT/CEO: THE EXECUTIVE COMMITTEE IS RESPONSIBLE FOR PREPARING THE CEO'S ANNUAL REVIEW, WHICH IS SUBMITTED ANNUALLY TO THE BOARD OF DIRECTORS FOR THEIR APPROVAL. ANNUALLY, THE EXECUTIVE COMMITTEE PRESENTS TO THE BOARD OF DIRECTORS A RECOMMENDATION FOR THE PRESIDENT/CEO'S MERIT RATING. THIS RECOMMENDATION WILL BE BASED ON THE PRESIDENT/CEO'S ANNUAL RESULTS AND WILL BE STATED IN TERMS OF THE STANDARD SCHOOLS FINANCIAL PERFORMANCE CATEGORIES. IN CONJUNCTION WITH THE MERIT RATING, THE EXECUTIVE COMMITTEE RECOMMENDS A PERFORMANCE BONUS AND SALARY INCREASE BASED ON THE CURRENT SCHOOLS FINANCIAL MERIT RATING CHART. THE PERFORMANCE BONUS IS CALCULATED BASED ON SUCCESS IN MEETING PRE-DETERMINED GOALS. THE BOARD OF DIRECTORS WILL ESTABLISH THE AMOUNT OF THE SALARY INCREASE (IF ANY) THAT WILL BE GRANTED TO THE PRESIDENT/CEO. THE MIDPOINT SALARY FOR THE PRESIDENT/CEO, AND PERFORMANCE BONUS TARGET, ARE ESTABLISHED ANNUALLY BY CONSULTING THE CALIFORNIA AND NEVADA CREDIT UNION'S BURNS-FAZZI, BROCK AND ASSOCIATES (BFB) SUMMIT ROUND TABLE (SRT) EXECUTIVE COMPENSATION SURVEY. THE SRT EXECUTIVE COMPENSATION SURVEY IS AN ANNUAL SURVEY OF SRT CREDIT UNION MEMBERS. THE LEAGUE CONDUCTS THIS SURVEY AS A SERVICE TO SRT CREDIT UNIONS, PROVIDING THEM WITH COMPARATIVE PEER DATA FOR EXECUTIVE COMPENSATION, BENEFIT, AND DEMOGRAPHIC INFORMATION. BASED ON THE RESULTS OF THIS SURVEY, THE EXECUTIVE COMMITTEE WILL RECOMMEND A MIDPOINT ADJUSTMENT TO THE BOARD OF DIRECTORS, IF NECESSARY. THE SCHOOLS FINANCIAL SURVEY RANGE WILL EXTEND FROM 80% OF ESTABLISHED MIDPOINT TO 120% OF THAT MIDPOINT. OTHER OFFICERS AND KEY EMPLOYEES: THE PRESIDENT/CEO COMPLETES ANNUAL REVIEWS OF THE OTHER OFFICERS AND KEY EMPLOYEES. THE ANNUAL RESULTS OF THESE EMPLOYEES ARE EVALUATED IN TERMS OF THE STANDARD SCHOOLS FINANCIAL PERFORMANCE CATEGORIES. THE MIDPOINT SALARY FOR THESE EMPLOYEES IS ESTABLISHED ANNUALLY BY CONSULTING THE CALIFORNIA AND NEVADA CREDIT UNION'S BURNS-FAZZI, BROCK AND ASSOCIATES (BFB) SUMMIT ROUND TABLE (SRT) EXECUTIVE COMPENSATION SURVEY. BASED ON THE RESULTS OF THIS SURVEY, THE EXECUTIVE COMMITTEE WILL RECOMMEND A MIDPOINT ADJUSTMENT TO THE BOARD OF DIRECTORS, IF NECESSARY. THIS MIDPOINT IS APPROXIMATELY EQUAL TO THE MEDIAN BASE SALARY FOR EACH EMPLOYEE'S RESPECTIVE POSITION AS SHOWN IN THE ABOVE MENTIONED SURVEY. THE SCHOOLS FINANCIAL SALARY RANGE WILL EXTEND FROM 80% OF THE ESTABLISHED MIDPOINT TO 120% OF THAT MIDPOINT. FORM 990, PART VI, SECTION C, LINE 19 THE CREDIT UNION'S GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICIES ARE AVAILABLE TO THE PUBLIC UPON REQUEST FOR THE SAME PERIOD OF DISCLOSURE AS SET FORTH IN SECTION 6104(D). THE CREDIT UNION'S ANNUAL REPORTS CAN BE VIEWED ON ITS WEBSITE. A COPY OF THE CREDIT UNION'S FINANCIAL STATEMENTS CAN BE REQUESTED. WE FILE A QUARTERLY 5300 REPORT WITH NCUA AND THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. FORM 990, PART XI, LINE 9: TRANSFER AS A RESULT OF MERGER -265,664,039.