By John B. Lund, President & Chief Executive Officer

Dear members,

I am honored to report on behalf of America First Credit Union and express my appreciation for your membership and support. This year, we celebrate our 80th anniversary—Fort Douglas Civilian Employees Credit Union was founded on March 16, 1939. Although our origins are humble, the 59 members who formed this cooperative had one simple yet powerful objective: helping each other improve their collective and individual financial well-being. Building on this same focus and passion, America First now stands as one of the strongest and most well-respected credit unions in the country.

The past 12 months have produced outstanding results. Although we are a national top-10 credit union and have a significant presence, we endeavor each day to provide relevant, affordable products in a convenient, professional and personal manner. In 2018, Forbes ranked America First #1 in their Best-In-State credit union review; I humbly agree.

We have three pillars guiding our operation to ensure long-term health and vitality:

• Lifetime relationships with members.
• Strategic and balanced growth.
• Financial strength and integrity.

LIFETIME RELATIONSHIPS

Our loyalty, retention and utilization numbers are among the industry’s highest. America First’s Net Promoter Score—a benchmark for evaluating service quality—stood at 81.9 at year’s end, a mark achieved only by the best of the best.

To establish lasting connections, we develop services, tools and information geared to benefit members throughout life’s many stages. We have youth and student accounts designed to increase financial literacy and promote responsibility. We deliver free checking, free debit cards, and free 24/7 account access through mobile and online banking, as well as at thousands of ATMs. With Visa® from America First, you’ll earn cash back, rewards, merchant-paid discounts and additional cash rebates.

No-cost financial counseling is available to those seeking a helping hand with budgeting, planning, or setting a new economic course. Members can review their credit scores for free, while our branches host free educational seminars and document shredding services, among other events.

America First proudly provides a diverse array of lending products, including Visa credit cards, lines of credit, mortgages and home equity loans, auto & RV financing and personal loans, as well as Small Business Administration and commercial loans. In addition, we provide investments, trust services, insurance, and a full complement of savings vehicles, including money market, certificate, retirement and health savings accounts.

To combat the prevalence of data breaches and fraud, we offer members and their families identity theft recovery and monitoring services. This is tremendous coverage that extends beyond America First accounts. All that is required for this protection is to hold a Visa credit card from America First. Similarly, free Card Guard® mobile security allows real-time control of when, where and how your Visa is used.

We maintain a large branch network throughout Utah, Nevada, Arizona and Idaho. Additional locations are planned this year. Credit union access and communication is provided via our robust website, free telephone banking, toll-free contact centers, secure email, and live chat. We foster informative, engaging social and digital media dialogue.

Our premier mobile and electronic services are nationally recognized for technology, simplicity and functionality. Products include mobile deposit, mobile & online bill pay, Apple, Android and Samsung Pay, person-to-person payments, and more.

GROWING IN A BALANCED, STRATEGIC MANNER

At America First, we do not seek to grow for the sake of growth. Expanding opportunity strategically and carefully gives us the ability to adapt products, services, security measures and other offerings to changing needs. Balanced growth further reduces risk, sustains appropriate capital levels, and promotes ongoing success.

A few highlights for 2018 are:

• Utah’s #1 credit union
• The country’s 9th largest credit union with assets exceeding $10 billion
• The nation’s 6th most substantial with over one million members and the 8th largest in terms of deposits
• Leading business, mortgage & credit card provider
• The region’s #1 auto lender
• Successfully merged with Altier Credit Union of Arizona
• Five new branch locations opened
• New departments established to enhance service and security

ENSURING FINANCIAL STRENGTH AND INTEGRITY

America First is fiscally sound and independently rated as one of the country’s most secure credit unions. We closed the year with $1.114 billion in net worth and a net worth ratio of 11.08%. Our federal regulator, the National Credit Union Administration, considers a net worth ratio of 7% to be well-capitalized. Last year, we received positive results from our annual regulatory and external audit examinations.

Net income for 2018 totaled $119.3 million. Assets were up by 11.65%, closing at $10.3 billion. Return on assets was a strong 1.20%. Membership grew at a healthy 10.63%, while deposits increased $989.5 million or 12.24%. Loans increased at a rate of 21.08%, finishing the year at $8.4 billion. Loan delinquency increased slightly to 1.16%. Our allowance for loan and lease loss is more than adequate to absorb any portfolio deficiencies.

This commitment to integrity extends beyond our role as a financial institution. We believe in the importance of good corporate citizenship and enhancing the communities we share. America First works to improve our schools, provide for the less fortunate, and make a meaningful difference in the lives of others. Such programs include food drives, our Warm the Soles campaign, the Souper Bowl of Caring, the 100% For Kids Credit Union Education Foundation, the credit union’s own charitable foundation, scholarships, and many other worthy causes. Further, our team donates considerable hours of personal time to service outreach.

My deepest gratitude is extended to the volunteers and staff, who are passionate about serving the membership, whether directly or indirectly. Our commitment to the uppermost standards of ethics and integrity, forward-thinking strategies, prudent financial management, and excellence in service has endured the test of time and the inevitability of changing economic cycles. It’s therefore a pleasure to state that our credit union is strong, vibrant and well-positioned for the future. Finally, I express my utmost appreciation to you as valued members. We pledge our best efforts to maintain your trust and establish a lifelong relationship.

By Glen Olpin – Senior Vice President & Chief Economist

As economic expansion in the United States continues, we are approaching one of the longest-running periods of growth on record, with the 120-month benchmark likely to be surpassed in 2019. We expect this positive trend to extend through the year.

Overall economic growth, as measured by gross domestic product, has seen ongoing improvement in Utah and neighboring western states. These have been among the top states in economic strength and we believe such strong performance will be ongoing.

Consumers are leading the recovery, their confidence being at an all-time high. Households are spending more and increasing debt levels. Personal income is up from last year, driven in part by tight labor markets. Low unemployment rates and an abundance of new job openings are applying upward pressure on wages.

Tax reform and regulation relief have encouraged stronger industrial production. Capital expenditures remain robust. The business sector should demonstrate durability comparable to the consumer segment, boosting economic security. However, issues of concern for stock and bond markets—weakening global indices, fears of ongoing trade wars, border security disputes and gridlock in Washington—may impede broad economic gains.

Home prices are rising more quickly than upticks in personal income, although the pace of price increases has slowed. Mortgage rates should gradually increase. The higher cost of housing, lower income gains, and long-term rate increases are reducing affordability for owners, with little near-term relief in sight. Moderate increases in sales are expected.

Positive underlying economic fundamentals supported the auto industry in 2018, but as manufacturers pay more for labor and materials, consumers will bear much of that burden. Demand for new vehicles is expected to cool somewhat this year, as buyers become more selective and price-conscious.

Indications suggest that inflation doesn’t pose a serious threat to the economy. Accordingly, following a series of minimal short-term rate hikes, the Federal Open Market Committee pushed the pause button, presumably for the first half of 2019.

Longer-term rates have seen small, sustained increases and are expected to go up slowly. The flattening yield curve, more moderate overall growth, a narrowing labor situation, and rising wage pressures give us mixed signals as to future financial strength.

Although challenges and market fluctuations will continue, we expect this year to generate solid economic results. As America First members, you can be assured that we will provide flexible, affordable, and convenient products & services that fit your changing needs.