77th Annual Meeting & Member Appreciation

Let theAdventure

Begin!

77th Annual Meeting ProgramFebruary 16, 2019, 6:00pm

Welcome & Annual Business Meeting:

Holly Dixon, Board Chair

Invocation: Greg Peter

Dinner: Hog Wild Pit Bar-B-Q

Prize Raffle

Dance to the music of

LLEW BROWN BAND

SKYWARD CREDIT UNION VOLUNTEERS AND STAFF

BOARD OF DIRECTORS SUPERVISORY COMMITTEEHolly Dixon Chair Link Newton Chair

Rusty Johnson Vice-Chair Roy Aycock MemberPhilip Chronister Sec/Treasurer Jennifer Faust Member

Kim Anderson Director CREDIT COMMITTEEJeff Dowden Director Mike Langston Chair

Darrell Elkinton Director Mike Irvin SecretaryWanda Scott Director Jim Mendenhall Member

Tom Butherus MemberTracie McIntire Member

Kevin Wilmoth President & Chief Executive Officer Greg Peter Vice President & Chief Financial Officer Daniel Hayden Vice President - Operations Veda Hogue Accountant Liz Wager Compliance/Internal Audit Michael Tucker IT Specialist Christy Bales IT Project Manager Megan Dominguez Marketing Lisa G Townsend Marketing Ashley Haner Trainer Theresa Pope Vice President of Lending Kevin Cade Senior Loan Officer Randy McCannon Loan Officer Ashley Arellano Mortgage Loan Officer Tammy Soper Mortgage Processor Sarah Duhon Loan Processor Fran Taylor Loan Processor Devonte Edwards Loan Processor Zachary Morgan Collections Specialist Teresa Walker Collections Specialist Nancy Bell Lead Accounting Clerk Melissa Page Accounting Clerk

Brandy Cinotto-Mauk Accounting Clerk Amanda Tate Lead Member Services-M/C Leeza Griffin Member Services-M/C Alexis Danielson Member Services-M/C Donna Scobee Member Services-M/C Kennedy Sloan Member Services-M/C Kaylee Lyda Member Services-M/C Nicole Cavanaugh Member Services Anna Bell Manager-Pawnee Branch Michelle Hayworth Senior Member Services-P Patty Cadle Member Services-P Gianna Jacobson Member Services-P David House Member Services-P Paul Mainz Manager-Greenwich Branch Kourtney Fritze Senior Member Services-G Carla Stockstill Member Services-G Liz Foster Member Services-G Terika Chambers Member Services-G Lisa Reed Vice President of Independence Branch Deidra Schild Member Services-I Tara Younger Member Services-I

CREDIT UNION STAFF

Skyward Credit UnionMINUTES OF THE ANNUAL MEETING

FEBRUARY 17, 2018The 76th Annual Meeting of Skyward Credit Union was held on Saturday, February 17, 2018, at the Cotillion at 6:00 p.m. The formal meeting was called to order at 6:10 p.m. by Holly Dixon, Chairman of the Board of Directors. A quorum of members was declared present with a total attendance of approximately 750.

Roll call of the Board of Directors and Committees was called. In attendance were:

BOARD OF DIRECTORS

Holly Dixon, Chairman Darrell ElkintonRusty Johnson, Vice Chair Kim Anderson

Philip Chronister, Secretary/Treasurer Wanda Scott

SUPERVISORY COMMITTEE

Roy Aycock

CREDIT COMMITTEE

Mike LangstonJim Mendenhall

Mike IrvinMisty RandallTom Butherus

Absent volunteers were from the board, Jeff Dowden, and from the Supervisory Committee, Link Newton, and Jenny Faust.

Misty Randall had previously announced she would be stepping down from the Credit Committee. Holly Dixon presented her with a plaque recognizing her 16 years of volunteer service.

Holly welcomed those in attendance and highlighted that our theme this year is Go for the Gold, to tie in with the Winter Olympics going on at this time. She then introduced the Credit Union staff and recognized them for their service to members. She also acknowledged the support of Textron Aviation and many of its employee groups that play a role in the success of the Credit Union.

Holly noted the Minutes of the February 17, 2017 Annual Meeting were published in the Annual Report. A motion was made to approve the 2017 Annual Meeting Minutes as printed and was sec-onded. The motion carried by a show of hands.

Holly noted the Treasurer’s Report for 2017 was published in the Annual Report. A motion was made to accept the Treasurer’s Report as printed and was seconded. The motion carried by a show of hands.

Holly reviewed the election results for the Board of Directors that had been conducted by mail-in and electronic ballot. Rusty Johnson and Jeff Dowden were re-elected.

Holly directed the audience’s attention to the screen where a prerecorded video was presented giving the highlights of the performance of the credit union for 2017.

Highlights in the video included the open house for our new Greenwich branch, and started offering Saturday hours at that branch. We had a clean audit and our annual exam by the Kansas Department of Credit Unions had no findings. We completed several compliance related projects to make sure we complied with regulatory changes like the Military Lending Act and other credit card and mortgage related changes. A college scholarship program was started this year with over 80 applicants. We awarded four $1,000 scholarships and due to the large response, we have increased it to six for 2018. The credit union rolled out Apple, Samsung, and Google Pay tied to our credit card this year. There were other IT related changes including moving our core software over to a service bureau. To enhance system security, we are in the process of moving our IT infrastructure off the Textron network to a company that specializes in financial institution networks. We rolled out eAlerts on our home banking system and on our MasterCard. Online HELOC applications were setup in the summer. Your family anywhere can open an account with us.

Changes coming in 2018 include Apple/Samsung/Google Pay for our debit cards, completing the network conversion process to strengthen our cybersecurity efforts and selecting a new online and mobile banking provider.

Financial highlights for the year included share deposit growth to $231 million, a 1.6% increase. The loan portfolio increased 7.4% to $121.5 million. Total Assets at year-end totaled $279.2 million, an increase of 2.6% over the prior year. Total operating revenue was $12.9 million with operating expenses totaling $7.6 million. The credit union paid over $1.9 million to members through normal dividends on share and certificate accounts. The board declared an extraordinary dividend of $500,000 at year-end. This dividend was shared by both our savers and our borrowers! Over the last four years, the credit union has distributed over $3.2 million in bonus dividends. The credit union reported net earnings after dividends of $2.8 million, resulting in a very safe and strong Net Worth to Total Assets ratio of 17.5%.

Holly noted that the reports of the Chairman, Supervisory Committee and Credit Committee were contained in the Annual Report that was distributed to attendees. She reported that 2017 was a suc-cessful year for the Credit Union.

Holly noted that our Board, Committees and staff are dedicated to serving you and providing you exceptional value with the financial products and services we offer. Thank you for your membership and consider sharing our benefits with your family members and Textron Aviation colleagues.

No old or new business was brought before the meeting.

Holly thanked Chris Ross and the annual meeting team for coordinating tonight’s event. The for-mal Annual Meeting of Skyward Credit Union was adjourned at 6:30 pm.

Holly introduced Greg Peter to give the invocation and Pledge of Allegiance. This was followed by dinner provided by Hog Wild Pit Bar-B-Q.

After dinner Chris Ross introduced Amanda Tate to conduct the drawing to giveaway over $5,100 in door prizes. The total in gifts including the attendance gifts given when the members come in the door totaled over $10,000. When Amanda and her team completed the drawing, President Kevin Wilmoth thanked staff, volunteers, and those in attendance for participating. He then let everyone know that Annie Up would be entertaining us as soon as we cleared the floor. There were several positive comments by attendees regarding the evening.

__________________________________________ __________________________________________

Holly Dixon, Chairman Philip Chronister, Secretary/Treasurer

Skyward Credit UnionSTATEMENT OF FINANCIAL CONDITION

- unaudited -

For the twelve months ended

ASSETS December 31, 2018 December 31, 2017

Cash and Cash Equivalents 1,814,144 4,437,850 LOANS TO MEMBERSConsumer Loans 87,132,452 88,067,149 Member Business Loans 8,401,100 7,238,831 Real Estate Loans 28,091,461 25,964,888 Loans Held for Sale - MMS 351,500 209,250 Total Loans to Members 123,976,514 121,480,118 Less: Allowance for Loan Loss (921,753) (980,204)Net Member Loans After ALL 123,054,761 120,499,914 INVESTMENTSFederal Agency Investments (Note A) 129,772,281 126,955,334 Certificates of Deposit 17,595,115 15,402,115 CUSO Investments 641,200 626,038 NCUA Share Insurance Deposit 2,309,531 2,240,501 Other Investments 3,972,029 3,557,833 Total Investments 154,290,156 148,781,821 OTHER ASSETSTotal Receivables 1,207,072 1,184,915 Total Prepaid Items 225,869 489,238 Net Property & Equipment 3,650,740 3,778,048 Total Other Assets 5,083,681 5,452,201 Total Assets 284,242,742 279,171,786 LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIESTotal Accounts Payable 1,064,820 1,753,729 Accrued Dividends Payable 211,843 179,648 Accrued Expenses Payable 401,638 311,865 Short Term Note 3,315,625 - Total Liabilities 4,993,926 2,245,241 SHAREHOLDERS' EQUITYTotal Member Shares 233,067,026 230,677,875 Reserves and Undivided Earnings 52,334,384 49,563,167 Unrealized Gain/(Loss) on Investments (6,152,594) (3,314,498)Total Shareholders' Equity 279,248,816 276,926,544 Total Liabilities & Equity 284,242,742 279,171,786 Note A: These investments are guaranteed by the US Government

Skyward Credit UnionSTATEMENT OF INCOME

- unaudited -

For the twelve months endedOPERATING INCOME December 31, 2017 December 31, 2016Interest on Loans 6,325,847 6,206,330 Investment Income 3,964,918 3,710,264 Other Operating Income 3,093,316 2,934,964 Total Operating Income 13,384,081 12,851,557 OPERATING EXPENSESWages & Benefits 2,977,065 2,822,086 Travel & Conference 123,619 109,935 Office Occupancy 29,506 27,403 Office Maintenance 53,352 46,359 Utilities 44,714 39,963 Building Depreciation Expense 129,868 107,561 Leasehold Improvements Expense 61,655 54,168 Building Taxes 36,675 36,990 Communications Expense 144,921 93,465 Postage 79,207 75,450 Equipment Maintenance 252,167 133,478 Office Supplies Expense 102,835 97,489 Insurance Expense 54,467 53,699 Furniture & Equipment Depreciation 170,781 141,783 Software License Expense 263,568 234,668 Cash Mgmt. & Vault Servicing Fees 77,400 70,550 Promotional & Educational 471,842 229,277 Legal & Professional Fees 134,757 113,740 Collection Expense 125,957 89,688 Loan Processing Fees 474,389 471,135 Debit/ATM Cards & Checking Expenses 686,608 695,938 Credit Card Fees 397,387 317,077 Charged off Share Accounts 4,036 657 State Examination/Operating Fees 51,365 49,736 Cash Short/Over 2,157 22 Fraud Losses 59,751 58,900 Association Dues 60,508 58,198 Miscellaneous Expense 836 2,824 Shared Branch Expense 322,239 333,194 Annual Meeting Expense 25,600 33,600 Provision for Loan Loss 510,000 1,050,000 Total Operating Expense 7,929,228 7,649,032 Income from Continuing Operations 5,454,853 5,202,525 Less Interest on Borrowed Funds (15,333) (8,668)Gain (Loss) Sale of Investments (149,433) 8,011 Gain (Loss) Sale of Assets (31,279) 37,394 Non-Operating Income (Expenses) 194,350 7,795 Net Income before Dividends 5,453,158 5,247,056 Member Shares Dividend Expense 2,681,941 2,419,755 NET INCOME 2,771,217 2,827,301

Report Of Board ChairpersonHOLLY DIXON

Skyward Credit Union saw significant changes in 2018. The most significant project of 2018 was getting the credit union off the Textron network. The change took place in March and was seamless to members. It has allowed us to enhance our cybersecurity protections and conduct more detailed monitoring. We want to make sure you have 24/7 access to your information and know that it is secure. We also rolled out Apple, Samsung, and Google Pay tied to our debit cards. Many members have started using it. This is one of the safest payment methods today.

We significantly increased our charitable giving in 2018, supporting local organizations and events such as Big Brothers/Big Sisters, Wichita’s Littlest Heroes, Riverfest, Guadalupe Clinic, the Salva-tion Army and many more. The college scholarship program started in 2017 was increased from 4 to 6 scholarships and the amount was doubled to $2,000 each. We offered our first youth financial education event, with over 55 teens attending.

We continue to maintain our focus on complying with regulatory changes, automating processes, and making efficiency improvements to enhance our products and services. One of those enhance-ments is a new mobile app that will roll out this summer along with an upgraded online banking platform and new website. New ATMs will be installed in the first quarter of 2019 to meet new security standards. A call center will be added later in the year to provide better member service and we will be rolling out two new credit card programs that allow you to pick the one that fits you best; a low interest rate for those that carry a balance or higher rewards for those that pay it off every month.

We continued our focus on sharing the value of our financial services to those eligible for member-ship, and we continued to maintain strong financial performance. Included in this Annual Report are a Statement of Financial Condition and Statement of Income. The following are some highlights for the year.

In 2018, share deposits grew to $233 million at year-end, an increase of 2.2%. Our loan portfolio increased 1.8% to $123.6 million. We managed our investment portfolio to achieve an above aver-age return while minimizing our risk. Total Assets at year-end totaled $284.2 million, an increase of 1.8% over the prior year.

Our credit union is committed to returning value to our members through above market savings rates, very competitive loan rates and low fees. Our interest income from lending, investments and our non-interest activities combined for total operating revenue of $13.4 million. Operating expenses totaled $7.4 million. As a result, the credit union was able to return over $2.2 million to members through normal dividends on share and certificate accounts. As a result of our overall strong performance, our Board was able to declare and pay another extraordinary dividend of $500,000 at year-end. This dividend was shared by both our savers and our borrow-ers! Over the last five years, the credit union has distributed over $3.7 million in bonus dividends. The credit union reported net earnings after dividends of $2.8 million, resulting in a very safe and strong Net Worth to Total Assets ratio of 18.4%.

Our Board, Committees and staff are dedicated to serving you and providing you exceptional value with the financial products and services we offer. Thank you for your membership and consider sharing our benefits with your family members and Textron Aviation colleagues!

Report Of Supervisory CommitteeLINK NEWTON, CHAIR

Skyward Credit Union is audited by the independent accounting firm of J. Tenbrink and Associates. They are in the process of conducting an audit for the period ending December 31, 2018. A similar audit was performed as of December 31, 2017. The auditors reported that Skyward Credit Union’s financial statements “presented fairly, in all material respects, the financial condition and results of operations and its cash flows, in accordance with generally accepted accounting principles.” The auditor’s report is available for inspection by members at the Skyward Credit Union Mid Continent office during normal business hours.

The credit union is also examined on a regular basis by the Kansas Department of Credit Unions and National Credit Union Administration. Due to our strong earnings, strong capital, and our focus on staying compliant with state and federal laws and regulations, they extended our exam cycle to 18 months, so we did not have an exam in 2018. We will be examined in early 2019 as a part of the regulators regular oversight process.

Our internal auditor reports to the Supervisory Committee at regularly scheduled meetings. She and the committee conduct random reviews and tests of various transactions, activities and inter-nal controls on a periodic basis. Results of these reviews are reported to the Board of Directors.

Report Of Credit CommitteeMIKE LANGSTON, CHAIR

The Credit Committee met monthly in 2018 to review the loan activity for compliance with guide-lines and policies of the credit union, and to approve loans as required. The credit union made 14,095 loans (including line of credit advances) totaling $55,374,836 during the year. At year-end, the balance of loans outstanding totaled $123,630,014 (net of loans held for sale) representing an increase of 1.8% from year-end 2017. The total amount of loans charged off as uncollectable for the year was $768,301. This was offset by recovery of prior charge-offs of $217,238. Delinquency to Total Loans ratio at year-end was 0.65%. The loan activity of the credit union was in compliance with guidelines and policies.

Volunteer Election ResultsRUSTY JOHNSON, NOMINATING COMMITTEE CHAIR

Paper ballots were distributed with the mailed year-end account statements and electronic ballots offered to those with e-statements, providing an opportunity for every member to vote for candidates to serve on the volunteer Board of Directors. Kim Anderson, Darrell Elkinton, and Wanda Scott were re-elected for another three-year term. We thank Tracie McIntire and Lisa Carselowey for running for the board.

*3.49% Annual Percentage Rate (APR) for 12 months on credit card balance transfers posted on or between 1/01/19 – 2/28/19. The 12-month period begins with the first qualifying transaction. After 12 months, any remaining balance from this promotion will return to the individual cardholder’s standard rate. See your credit card statement for further details.

*APY is Annual Percentage Yield. APY is accurate as of 01-15-2019. Roth and traditional IRA certificates are not eligible. Promotion subject to change at any time. Minimum opening balance $1,000. Certificate automatically renews to 12-month term at maturity. Early withdrawal penalties may apply. Fees could reduce earnings. Account opening subject to membership requirements. Federally insured by NCUA.

3.49% APR for 12 Months*

on Credit Card Balance Transfers.

Cheers to No Balance

Transfer Fees

11 Month Certificate at 2.80% APY *

Savings so Sweet

2019 Aim Higher Scholarship Program

Skyward will be awarding six $1,000 scholarships

for the 2019-2020 school year. Application Deadline: March 29th

Skyward, Loan, Share and Asset Growth

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Thankyoutoourbusinesspartnersthatgraciouslycontributedprizestoour2019AnnualMeetingRaffle:MillenniumCorporateCreditUnionRaymondJamesKWCHTenbrinkDavis-MooreHogWildPit-B-B-QHatchettDevlinAutomotiveGroupMainStreetInc.

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

2013 2014 2015 2016 2017 2018

LOANS

SHARES

ASSETS

Credit Union Five Year Highlights2013 201814,413 Members 16,30410,509 Loans to Members 12,5071.46% Return on Assets Percentage .98%

Skyward Loan, Share, & Asset Growth

Student applicant must be a member and primary account holder in good standing with Skyward Credit Union. Applicant must be a high school graduate in 2019 (or earlier) and under the age of 24. Applicant must have a minimum cumulative high school GPA of 2.5 (or minimum GPA of 2.5 in one full year of post-high school education, if applicable). Employees and volunteers of Skyward Credit Union and their household family members or dependents are not eligible to apply. Applications must be delivered in person or by mail by 5:00 PM CST on March 29th, 2019. Electronic applications will not be accepted.

Cheers to No Balance

Transfer Fees

Thank you to our business partners that graciously contributed prizes to our 2019 Annual Meeting Raffle:

Millennium Corporate Credit Union

Raymond James

KWCH

J. Tenbrink and Associates

Davis-Moore

Hog Wild Pit Bar-B-Q

Hatchett Devlin Automotive Group

Main Street Inc.

Berkshire Risk Services

Textron Aviation Employees Flying Club