ANNUAL REPORT 2019

Realizing Dreams

I’m pleased to report that Xceed Financial Credit Union

ended 2019 in solid financial condition, with total assets

of nearly $885 million and a very healthy net worth ratio

of 10.8%. Our loan/deposit ratio of 98% reflects Xceed’s

continuing commitment to meeting our member’s

borrowing needs. Member satisfaction continued to be

a major strength, as we reached 95% Satisfied/Very

Satisfied on a goal of 88% on our member surveys.

Nonetheless, it was an extremely challenging year from

a financial performance perspective, with three interest

rate cuts by the Fed which negatively impacted the Credit

Union’s net margin and overall profitability. However,

Xceed’s continued focus on expense control resulted

in drop in non-interest expense of $4.5 million thereby

offsetting the impact of the declining interest rate

environment. Although lower than budget, we’re very

pleased to report net income of $1.9 million for the year

given the difficult challenges faced in 2019.

Looking back on 2019, with a perspective influenced

by events of 2020, I’d like to share a few words about

diversity, equity and inclusion. While a series of tragedies

brought these issues to the forefront of national and

global consciousness in 2020 — spurring what we hope

will be substantive and lasting change — long-time Xceed

members know this is an area where our Credit Union

has long been a leader and role model among financial

institutions. Xceed has for decades proactively worked

to enhance our workforce and volunteer leadership with

people from diverse backgrounds and perspectives.

We are also proud of how we have used our industry

platforms to help other credit unions recognize and take

action to address our industry’s shortcomings.

This authentic commitment to being a force for good

in our members’ lives and our communities is one of

the defining differences between member-owned,

cooperative financial institutions like ours and for-profit

banks. On behalf of your volunteer Board of Directors, I

want to thank you for your support of these ideals and

reiterate our unwavering commitment to decision-making

and governance that put your interests at the center of

everything your Credit Union does.

RONI CRICHTONBoard Chair

A MESSAGE FROM THE BOARD CHAIR

2019 ANNUAL REPORT

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Like a lot of our SEG business partners, Xceed operates

with a playbook that is a guide for associates at all levels

to reference when interacting with members, prioritizing

projects, and deciding where to allocate member

resources. Right at the top of that playbook is this simple

statement of our core purpose – why we exist:

With that mind, our frontline associates are trained to

be engaged and expert in focusing first on a member’s

goals and hopes for the future; only then can they offer

their best guidance on the Xceed products and services

that can best help transform the member’s dreams into

reality. That same member-centric perspective infuses

management-level decisions about everything from new

products, promotions and technology, to the work we do

to enhance members’ experience with their Credit Union.

It was fitting, then, to select Realizing Dreams as the

theme for 2019’s annual report. The year brought loan

programs and promotions to help members realize

their dreams of home ownership, get into their dream

ride, and finance all sorts of other aspirations. It also

brought great savings opportunities, including the

limited-time Xclusive Money Market Account (XMMA).

One of our most spectacularly successful products in

recent memory, the XMMA combined flexibility with very

attractive dividends, growing members’ nest eggs and

helping the Credit Union to surpass our deposit growth

goal.

Another way we worked to respond to your needs and

keep you at the center of everything we do was the new

member survey program we adopted in 2019. This new

program is proving to be more efficient in delivering your

feedback about your experiences with us, enabling us to

respond more quickly to issues and trends, and drive the

priorities that matter most to you.

As you look through this annual report and some of the

highlights for Xceed in 2019, I hope you are proud of

your choice to join the Credit Union. It is truly our honor

to serve your financial needs, and help you realize your

dreams.

TERESA Y. FREEBORNPresident & Chief Executive

A MESSAGE FROM THE PRESIDENT & CHIEF EXECUTIVE

“We exist to serve our members’ financial

needs and help them realize their dreams.”

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The Supervisory Committee, a group of appointed volunteers, is primarily responsible for overseeing the overall safety

and soundness of Xceed Financial, as well as the Credit Union’s adherence to operating policies and procedures. Each

year, we reaffirm our commitment to ensuring that your credit union is financially stable and maintains the highest

member service standards possible.

The Supervisory Committee annually conducts a number of on-site audits of Financial Centers and other Credit Union

areas. Additionally, we review member account records to verify their accuracy and oversee the audit performed by our

independent auditing firm, Crowe LLP, Certified Public Accountants. As a result of these combined efforts, I am proud to

report that Xceed Financial Credit Union and its assets remain financially sound and secure.

GRETCHEN G. VALENTINESupervisory Committee Chair

SUPERVISORY COMMITTEE REPORT

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No doubt about it. Day-to-day money habits – things

like saving consistently, making a budget and keeping

to it – are key to reaching both big and small financial

goals. So, throughout 2019, we helped members

tackle the goals that will enable them to realize their

dreams by adding to our outstanding checking and

savings account lineup with great new accounts and

promotions. It was all about making savings grow

faster and money go farther.

Xclusive Money Market Accounts: Money Market

Accounts offer a flexible way to save, combining easy

access to your money with a higher dividend rate.

In the spring, we dreamed up a pretty fantastic new

promotional product – the Xclusive Money Market

Account – with a hard-to-beat rate of up to 2.25% APY

that was locked in through mid-2020. The account was

a spectacular success, and it wasn’t long before we

knew we needed to let members saving for retirement

in on the same great deal by creating the Xclusive IRA

Money Market Account!

IRA Promotional Share Certificates: When Tax Day

was on the horizon, we were there to help members

reduce their tax bite and save more for retirement

with a nine month promotional IRA share certificate

offering a market-leading 2.50% APY.

Signature Checking: We made our premier, dividend-

earning checking account even more appealing by

offering auto loan rate discounts and increased share

certificate dividend rates to members who took

advantage of our Signature Checking promotion.

Visa® Rewards & Promotions: The Xceed Visa® is

one convenient piece of plastic, with rewards that

make it the perfect card for daily spending and major

purchases. We made it an even more attractive

choice with popular promotions like the Visa® Super

Bowl Sweepstakes, double rewards points on various

purchase categories, and generous statement credits

during key spending seasons like the holidays.

CONVENIENT DAY-TO-DAY BANKING

High-value accounts that help you realize your dreams faster.

When Tax Day

was on the horizon, we were there to help members

reduce their tax bite and save more for retirement

with a nine month promotional IRA share certificate

We made our premier, dividend-

earning checking account even more appealing by

offering auto loan rate discounts and increased share

certificate dividend rates to members who took

advantage of our Signature Checking promotion.

The Xceed Visa® is

one convenient piece of plastic, with rewards that

make it the perfect card for daily spending and major

purchases. We made it an even more attractive

Super

Bowl Sweepstakes, double rewards points on various

purchase categories, and generous statement credits

during key spending seasons like the holidays.

2019 ANNUAL REPORT

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Whether it’s a first home, a new car, a vacation-of-

a-lifetime, or something else entirely, most of us

need to take out loans for the major purchases and

experiences that make our dreams. With great rates

and our comprehensive lineup of home, auto and

personal loans, Xceed’s knowledgeable associates

helped members at every stage of life secure the right

loans for their individual needs.

Help with Home Loans: Shopping for a first home

can be intimidating, so throughout the year we hosted

“Meet the Experts” events at our Financial Centers to

enable members to get their mortgage loan questions

answered while also getting acquainted with respected

realtors in their area. We also helped more members

achieve home ownership through government

programs such as FHA, WISH and HomeReady.

New 5/5 ARM Loan: We want to make sure every

member who is in the market for a new home loan

or refinance can find exactly what they need at their

Credit Union, so we’re always looking for ways to

improve our mortgage product line. In 2019, we added

a new 5/5 ARM (adjustable rate mortgage) which was

very popular.

Holiday Gifts for Members: If there’s ever a time we

can all use a break financially, it’s the holidays! To help

members take advantage of all the best year-end deals,

we offered special “gifts” in the form of rate discounts

on auto and personal loans, and credits toward closing

costs on mortgages. And for those in the mood for

holiday saving, we offered a dividend rate boost on

share certificates.

Cruise into Savings: Xceed has helped countless

members get into a first car or dream car, with low-

rate loans on new and used vehicles. This year, we

helped many members negotiate their best deal by

preapproving them in advance so they knew exactly

how much they could afford to spend. And, for

members who were happy with their vehicle, but not

their payment, we came through with great deals on

auto refinancing.

A LOAN FOR EVERY DREAM

Affordable financing that brings all your dreams within reach.

2019 ANNUAL REPORT

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Your dreams are as unique as you are, so your Xceed

Wealth Management Group Financial Consultant

takes the time to understand what makes you tick.

That helps us zero in on what you want your money

to achieve, now and in the future, so we can tailor our

advice and investment strategies to help keep you

on track for success. Members love our personalized

approach to everything from insurance and investment

management, to wealth planning, estate planning and

cash management. In 2019, that helped us grow our

advisory business by 38% and grow our assets under

management by $20 million.

Trust Services: We embarked on an exciting new

partnership with Affinity Trusts and Members Trust

Company which greatly expanded our ability to meet

clients’ wealth and estate planning needs. In addition

to helping clients choose which type of trust might

work best for them, and effectively manage their trusts

in life, we’re also able to provide access to prudent

trustees who can manage a client’s financial affairs

when they pass away or are no longer able to do so on

their own.

Retirement Planning and Financial Education: Our

Financial Consultants are proud to work with both

experienced investors and younger people just starting

to think about retirement and other major financial

goals. So, throughout the year, we hosted financial

workshops aimed at helping clients get answers to

the big questions that often arise with major life

milestones. We also shared our deep experience with

Xerox-specific plans at a special retirement seminar

just for Xerox employees.

Social Media Engagement: With Xceed Wealth

Management Group’s fresh new Facebook, Twitter and

LinkedIn pages, clients gained easy and convenient

ways to stay up to date on our upcoming financial

education workshops and webinars. This year, clients

who engaged with us on social media also had access

to a continual stream of helpful posts featuring timely

financial tips and techniques to help them reach their

retirement and investment goals.

XCEED WEALTH MANAGEMENT GROUP

Working toward your dreams.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. The information provided by the Retirement Results Team is not intended to be the primary basis for your investment decision.

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Xceed Financial Credit Union and Xceed Wealth Management Group are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Xceed Wealth Management Group, and may also be employees of Xceed Financial Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Xceed Financial Credit Union or Xceed Wealth Management Group. Securities and insurance offered through LPL or its affiliates are:

Not Insured by NCUA or Any Other Government Agency Not Credit Union Guaranteed Not Credit Union Deposits or Obligations May Lose Value

2019 ANNUAL REPORT

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It’s often when they first take a job with an Xceed

business partner (a.k.a. SEG or select employer

group) that our members learn just how much their

new employer cares about employees’ well-being.

That’s because a benefit package that includes

Xceed membership can go a long way toward helping

employees dial down financial stress, and make real

progress toward achieving financial goals. Hello,

dream home!

Special Perks for Employees: In 2019, we partnered

with several SEGs — from ADT to Xerox – to offer a

range of special, limited-time perks and bonuses to

their employees. The response was so positive, we

also offered those same great deals to members in

key communities such as Rochester, New York and

El Segundo, California, too! Whether members were

in the market for a new checking account or share

certificate, a home mortgage or auto loan, we were

there to sweeten the deal with cash rewards, dividend

rate bumps, reduced costs, and interest rate discounts.

More Convenience: Realogy and Wyndham are among

Xceed’s largest SEGs, and in 2019, we stepped up

to make banking with us even more convenient for

their workers. Responding to feedback from these

companies’ leaders, we greatly expanded our presence

and the services offered at the Xceed Financial

Center in Parsippany, New Jersey which is near both

companies’ headquarters.

Extraordinary Banking is Worth Sharing: The

referral program we rolled out in 2018 was such a

hit, we decided to continue it on into 2019 and make

it even more rewarding for you to share all the great

benefits of Xceed membership. Throughout the year,

both the member and the co-worker or friend they

referred were eligible to pocket up to $200 each in

bonus cash!

Xerox and Xceed: We’ve had a special relationship

with Xerox and its employees for decades, but we

never take that relationship for granted. This past

year, we were especially honored to be the Silver

Sponsor of the XLA (Xerox Leadership Association)

2019 Leadership Professional Development Event.

COLLABORATING WITH BUSINESS PARTNERS

Your dream job, with awesome benefits.

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When you’re pursuing your dreams, the last thing you

want is friction slowing you down. So, we made it a

priority in 2019 to do a deep dive on your experience

with us, eliminate points of friction, and make it easier

than ever to access your accounts and do more with

your Credit Union. Here are just a few examples.

24/7 Access to Your Money: As much as we

love engaging with members in our Financial

Centers, you’ve let us know you want to do most of

your banking with us digitally. So, our tech gurus

continually rolled out tweaks and enhancements to

improve your digital experience. And, of course, we

continued to offer unsurpassed access to your cash

through our nationwide network of more than 80,000

surcharge-free ATMs.

Keeping ATMs Updated: You’ve also told us you’re

not actually using cash so much anymore, but when

you visit an ATM, you want it to be equipped with the

latest, greatest tech. We helped make that happen by

upgrading our ATM fleet. Bonus point: we negotiated a

killer deal on the new machines, so they’re cheaper to

operate and keep technologically current!

Free Visitor Wi-Fi: Nobody likes to burn up their

device’s data plan, so we were delighted to roll out

free Wi-Fi for members visiting any of our Xceed

Financial Centers.

Financial Education at Your Fingertips: Expert

Xceed associates are always happy to offer savvy

advice on managing your money, but sometimes you

just want to tap your device for the answers you need.

To make sure you’re always covered, we kept our By

the Numbers blog and social media pages fresh and

relevant with great savings tips, budgeting tools, and

easy-to-use calculators.

Streamlining Processes: “Less paper, please.” We

heard you, and took the opportunity to improve

our processes, from simplifying our membership

application and slashing our trust account application

from five pages to two, to making it easier to open

new accounts online.

EASY & CONVENIENT ACCOUNT ACCESS

So you can spend your time on thethings that matter most.

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We at Xceed take pride in being a deeply engaged in

the communities where we do business. Here are just

some of the ways we collaborated with other leading

organizations and institutions to help members’

neighborhoods thrive.

Rochester Red Wings: It just wouldn’t be summer

in Rochester without Red Wings baseball! Our

sponsorship of this much-loved minor league team

allowed us offer special discounts to members,

promote Credit Union membership onsite, and host fun

activities for fans during home games.

Seneca Park Zoo: From the zoo’s annual Zoobilation

fundraising gala to its ZooBrew happy hour events that

raise funds for elephant conservation, we were proud

to continue our longtime support for this much-loved

Rochester institution. As part of our sponsorship,

members also received entry and concession discounts

when using their Xceed debit or credit card.

ROC Tech Conference: Sponsored by our friends at

the Greater Rochester Chamber of Commerce, this

major local event drew nearly 500 tech professionals

to the Floreano Convention Center. Xceed’s

sponsorship gave us an opportunity to support and

engage with the businesses that are making Rochester

and the Finger Lakes region a technology hub.

Xceed Health & Lifestyle Expo: We were thrilled

to host our very own Health & Lifestyle Expo,

featuring a range of health-oriented vendors, food,

and fun contests in the parking lot of our El Segundo

headquarters. More than 300 people from nearby

SEGs and neighboring businesses, as well as Xceed

associates, attended and learned more about Xceed —

a different kind of financial institution that truly cares

about their well-being.

Los Angeles Street Festival: Taking place in Xceed’s

own backyard, the annual Los Angeles Street Festival

is a popular sports, entertainment and food event

that draws more than 20,000 people in the Silicon

Beach area of Southern California. As a major

sponsor, we were able to showcase our deep roots

in the community and share with attendees how we

help members locally and nationwide to realize their

dreams.

ENGAGING WITH OUR COMMUNITIES

Dreams grow where communities are strong.

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Xceed has always been all-in with the credit union

ethos of “people helping people.” In 2019, we

supported a range of charitable activities and causes

that matter to our members.

American Heart Association: We love our partnership

with the American Heart Association Rochester

Heart Walk & Run! This year, around a dozen Xceed

associates participated in the event while associates

nationwide helped to raise more than $4,000 for

the cause through Wear Red Day, bake sales and

Valentine’s Day Grams.

Danielle Downey Credit Union Golf Classic: The

Rochester area has been hosting women’s professional

golf for decades, and the beautiful Brook-Lea Country

Club was again the site of the tournament that honors

Danielle Downey, Rochester’s most successful female

golfer. Xceed was honored to be a part of this event,

which raises funds for the Pluta Cancer Center.

Children’s Miracle Network Hospitals: Xceed and

our associates continued to be big supporters of our

industry’s charity of choice, Children’s Miracle Network

Hospitals, participating in fundraising activities

throughout the year, including the CHOC Walk at

Disneyland where we raised close to $3,000.

Pirate Toy Fund: This beloved nonprofit program

provides holiday toys to low income children in the

Rochester area. We continued our longtime financial

support, with associates also volunteering at events,

and members dropping off new, unwrapped toys in the

collection bins set up at our Financial Centers.

Romeo Doty Scholarships: A college education can be

just what a young person needs to realize their career

dreams. In 2019, as in years past, Xceed awarded

$1,000 scholarships to promising students pursuing

higher education through our Romeo Doty Scholarship

program and Chairman’s Xcellence Scholarship

program.

Bite of Reality: Not everybody gets schooled at home

on financial basics, but we know that financial literacy

is crucial for individuals and families to realize all sorts

of dreams. So, we joined our fellow credit unions in

sponsoring the Richard Myles Johnson Foundation

Golf Tournament, which raised more than $50,000 to

fund the Foundation’s signature Bite of Reality youth

financial education program.

SHARING THE DREAM

Charitable activities that improve lives.

Children’s Miracle Network Hospitals: Xceed and

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FINANCIALS

2019 Financial Statements

For the independent auditor’s report and opinion, please contact us at: 800.XFCU.222Insured by NCUA.

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CONSOLIDATED STATEMENT OF FINANCIAL CONDITION As of December 31, 2019

CONSOLIDATED STATEMENT OF INCOME For the year ending December 31, 2019

ASSETS

Net Loans $ 698 ,4 3 7 ,887

Cash 62 ,3 58 ,38 7

Investments 48 ,890 ,203

Other Assets 74 ,6 0 7 , 1 4 1

TOTAL ASSETS $ 884 , 2 9 3 , 6 1 8

LIABILITIES & EQUITY

LIABILITIES

Members’ Shares $ 720 ,5 20 ,854

Notes Payable 65 ,500 ,000

Other Liabilities 3 ,050 ,046

TOTAL LIABILITIES 789 ,0 70 ,900

MEMBERS’ EQUITY 95 ,2 2 2 , 7 1 8

TOTAL LIABILITIES & EQUITY $ 884 ,2 9 3 , 6 1 8

INTEREST INCOME

Total Interest on Loans $ 3 1 ,432 ,8 2 1

Total Interest on Investments 2 , 1 84 , 1 8 7

TOTAL INTEREST INCOME 33 , 6 1 7 ,008

INTEREST EXPENSE

Total Dividends on Members’ Shares 5 , 760 ,663

Other Interest Expense 1 ,8 1 5 ,622

TOTAL INTEREST EXPENSE $ 7 ,5 76 ,285

NET INTEREST INCOME 26 ,040 ,7 2 3

PROVISION FOR LOAN LOSSES 1 , 1 80,000

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES 24 ,860 ,7 2 3

TOTAL NON-INTEREST INCOME 9 ,8 2 5 ,926

TOTAL NON-INTEREST EXPENSE $ 32 ,8 2 5 ,29 7

NET INCOME $ 1 ,86 1 ,352

FINANCIALS2019 Financial Statements

For the independent auditor’s report and opinion, please contact us at: 800.XFCU.222Insured by NCUA.

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CONSOLIDATED STATEMENT OF FINANCIAL CONDITION As of December 31, 2019

CONSOLIDATED STATEMENT OF INCOME For the year ending December 31, 2019

2019 ANNUAL REPORT

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Judy Novak

OTHER VOLUNTEERS

Mark Cunningham Don Rory Heather Smith Raleigh Steinbach

EXECUTIVE MANAGEMENT TEAM

Teresa Freeborn Michael Sacher Fabiana Burkett Bertha Gascon

BOARD OF DIRECTORS

John ButtrillDea Benson Gretchen ValentineDennis Ruffner

LEADERSHIP

Kelly Ritchey-DavorenMarquis Boochee

Roni Crichton Spence Leslie

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BOARD OF DIRECTORS

• Roni Crichton, Chair

• Judy Novak, Vice Chair

• Dea Benson, Secretary

• John Buttrill

• Spence Leslie

• Dennis Rufner

• Gretchen Valentine

EXECUTIVE COMMITTEE

• Roni Crichton, Chair

• Judy Novak, Vice Chair

• Dea Benson, Secretary

SUPERVISORY COMMITTEE

• Gretchen Valentine, Chair

• Mark Cunningham

• Don Rory

• Heather Smith

• Raleigh Steinbach

FINANCE & INVESTMENT COMMITTEE

• Judy Novak, Chair

• Dea Benson

• John Buttrill

• Spence Leslie

• Dennis Ruffner

NOMINATING COMMITTEE

• Spence Leslie

• Judy Novak

• Gretchen Valentine

LEADERSHIP & COMMITTEES

2019 ANNUAL REPORT

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• ADT Security

• Alorica

• Aramark

• Atkore

• Avis/Budget

• Builders Exchange of Rochester

• Centinela Freeman Regional Medical Center

• Chubb

• Comfort Windows & Doors

• Conduent

• Costco Wholesale

• Crosbie Brownlie

• Deerfield Realty

• Desser Tire & Rubber Company

• Dixon Schwabl

• DoubleTree Hilton Hotel

• Federation of Catholic Teachers

• Friendly Home

• Germino & MacKay

• Global Imaging Systems, Inc. (GIS)

• Heraeus Metal Processing, Inc.

• Hillcrest Country Club

• HITCO Carbon Composites, Inc.

• Ingram Micro

• Innovative Solutions

• Isaac Heating & Air Conditioning

• Jewish Home of Harrisburg

• Jewish Home of Rochester

• Johnson Controls

• Longwood Management

• Mallinckrodt Pharmaceuticals

• Medtronic (Covidien)

• nVent

• Optimax

• Pentair

• Raytec Group

• Realogy

• Securitas

• Silicon Valley Community Foundation

• St. Ann’s Community

• Stokes, Visca & Company

• Sysco Harrisburg

• TE Connectivity

• Travelodge Hotel

• Tyco International

• Unified Physician Management

• U.S.P.S. Harrisburg

• U.S.P.S. Rochester

• Wyndham Worldwide

• Xerox

BUSINESS PARTNERS

2019 ANNUAL REPORT

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