b'TREASURERS REPORT 2023ANNUAL REPORTKauai Federal Credit Union remains a safe and well-capitalized institution with reserves well over the minimum regulatory limits. Our capital and liquidity ratios remain strong with con-tinued asset growth.2023 performance reects reinvestment of capital raised and earned over the last couple of years, back into the community. Assets grew 13% to $169.2 million. Loans grew 18% to $130.0 million, part of the growth funded though wholesale borrowings, as deposits stayed mostly at at $120.6 million. Net interest income grew at a lesser pace of 4%, as increases in short-term interest rates impacted the funding rates and net interest margin. The credit quality of our loan portfolio remained well managedincrease in loan loss provision of $0.4 million was mostly related to new loan volumes.Our investment in East-side market expansion project is reected as increased operating expenses, as we added personnel and non-personnel resources to serve new markets. Increases in market expansion related expenses, along with key noninterest income revenue streams (related to U.S. Treasury programs) being deferred to 2024, resulted in 2023 negative earnings of $2.2 million.Our continued ability to be effective in making an impact as a Community Development Financial Institution (CDFI) is dependent on our capital strength and access to liquidity.Capital Strength: Net worth ended the year at $18.4 million with a 10.9% net worth-to-assets ratio, 3.9% above the 7.0% well-capitalized regulatory level.Liquidity: We invest our member deposits, back in the community, at double the rate of our Hawaii peers, where in addition to member deposits, we rely on our ability to raise funds in the wholesale markets. Our borrowing power in the wholesale markets against our mortgage and government securities portfolio is one of the highest in our peer group. Our 12-month cash and contingent liquidity is forecasted at $70 million41% of our asset size.We are well positioned to be impactful and looking forward to an exceptional 2024!Cyndi AyononTreasurer, Board of Directors'