Y o u c a n t r u s t y o u r d r e a m s t o u s .

M e r i w e s t A n n u a l R e p o r t 2 0 1 6

Whether for family, business, community or simply for one’s self, we all have dreams. We envision what we most want life to look like in a year, a decade, a half-century. Those images of the future motivate us. Give us focus. Point us in a specific direction. To become reality, every dream needs a plan, support,

guidance, the right tools and a little inspiration. That’s where Meriwest Credit Union comes in. From envisioning that first home, picturing a new car, looking ahead to starting or growing your business, watching your children receive their college diploma, imagining a secure retirement or an adventure of a lifetime, you can trust us with your dreams.

Helping you, our members, realize your dreams inspires us and is the reason we look back on 2016 with a sense of accomplishment. We are honored to serve nearly 7,000 new members as more and more people put their trust in us. With innovations in product delivery and an increased focus on customer service that anticipates member needs, we are here to help you put your dreams into action. Energized by our vision and values to serve our members, we continued to invest ourselves and our resources in ways that improve convenience, security and accessibility as well as quality of life in our communities.

Your dreams are safe with us.

The continued financial stability and strength of Meriwest assures we’ll be here for our members for generations to come. That continued strength enabled us to provide over $310 million in loans to help members buy or refinance a home in 2016, and lend $125 million to local businesses in support of our community’s growth. We also enhanced our mobile app with advanced technologies including fingerprint ID, for fast, secure login, and Card Controls that allow you to deactivate, reactivate or cancel your debit card immediately if needed. We also converted all of our debit cards to EMV chip-technology, and every MasterCard® we issue comes with that added security plus an array of new benefits such as Identity Theft Resolution Services, Extended Warranty and Price Protection, at no additional cost.

In early 2016, we created Meriwest Wealth Advisors to help grow and protect your assets while realizing your dreams for retirement. We’ve recently developed a stronger presence in our main office for Meriwest Wealth Advisors to help provide better, more efficient service.

You can trust us with your dreams.

“ The key to realizing a dream is to focus not on success but significance – and then even the small steps and little victories along your path will take on greater meaning.”

– Oprah Winfrey

M e r i w e s t A n n u a l R e p o r t 2 0 1 6

Making your life easier.

Everything we do is designed to make accomplishing your dreams a lot easier. We continued to upgrade products and services like expanding ATM Remote Deposit Capture to all of our ATMs and to tellers in our branches. Transactions are scanned and instantly digitized so you have an accurate, speedy record of your checks and deposits. And with our new instant-issue capabilities on the horizon, when you open an account or need a replacement debit card, the card can now be created right at the branch so there’s no waiting for convenient, secure access to your funds.

In order to get you the information you need faster, we significantly enhanced our Knowledge Base Enterprise System and upgraded our training technologies. Our staff is equipped with the most up-to-date information, making it easier to serve our members. And your account balances are now always at your fingertips with Quick Balance on our mobile app. We not only want to help you realize your dreams, we also want you to enjoy the experience along the way. That’s why we are investing in a new branch opening soon in Cupertino and an extensive remodel in Milpitas slated for 2017. Our new state-of-the-art eNotice system delivers the information you need and depend on faster, and even more securely. With our upgraded telecommunications system, you have easy, around-the-clock access to more account information.

Our vision of excellence is also a reality. In our latest Member Service Quality Survey, 95 percent of our members said that we met or exceeded expectations. We won’t rest even when we reach 100 percent.

An even brighter future ahead.

As an organization and as individuals, Meriwest is dedicated to growing our community outreach efforts. In 2016, 100 percent of our staff joined in some form of community service, contributing more than 1,900 service hours to feed the poor, volunteer at churches and community centers, clean up parks and support school events in addition to blood drives, helping at hospitals and camps for underserved kids, mentoring our youth, and more. In all, staff supported 34 local charities and nonprofits and donated over $38,000 in addition to their time and effort.

We exceeded our goal to provide financial literacy workshops and seminars, taught by Meriwest employees, to 6,000 members, neighbors and students at local schools, junior colleges and youth organizations throughout the community. Further, we partnered with the Federal Home Loan Bank of San Francisco and their WISH and AHEAD programs to sponsor $180,000 in matching grants for eligible first-time homebuyers, and on AHEAD and AHP programs providing $55,000 to Habitat for Humanity & Peninsula Family Service.

This year is already brimming with promise. We’re continuing to discover even more ways to help make your dreams come true. Thank you for putting your trust in us.

When I joined the Board of Directors of IBM San Jose Credit Union (now Meriwest) in 1967, we

had assets of $1.2 million and a staff of four or five. Our only office was in the “Boathouse” next

to the cafeteria on the IBM plant site. Prior to that it was actually in the cafeteria itself.

Today, our assets exceed $1.3 billion, our staff numbers 232 and we have 11, soon to be 12,

conveniently located offices to serve our 76,000—and growing—members. Continued investments

in the latest technologies also make it possible for members to bank online and on their

smartphones, from anywhere, any time.

Through these years of growth there have been a number of constants. Foremost in my mind is

the excellent service we provide to our members through a myriad of loan and savings programs,

educational seminars and a commitment to making our community a better place to live. I am

very proud of the contributions that Meriwest and its employees have made in terms of their

time, energy and resources that grow with each passing year.

Another important constant has been the support of our members. You were our foundation in

those early years, you stuck with us in the recent recession, and you inspire and enable us today

to grow along with you as you pursue your dreams. We will continue to work to earn your trust

in everything we do.

Stanley Chapman, Board Chairman

Chairman's Report

“ To accomplish great things, we must not only act, but also dream; not only plan, but also believe.”

– Anatole France

President & CEO's Message

My daughter is headed off to college soon with a cargo of clothes and a heart full of dreams.

Through the years we’ve prepared ourselves and her for this as best we can. And it’s that

preparation and her hard work that will give her the runway to fulfill her goals and aspirations.

We all have dreams and it’s our job at Meriwest to help you, our members, prepare for and

realize your own dreams, whatever they may be.

Dreams, preparation and goals are the themes for this year’s annual report. Knowing that we

are helping our members make their dreams come true is what makes us at Meriwest excited

to come to work each day. Our mortgage loan officers know the joy of financing a home for

first-time home buyers. Our business banking group gets satisfaction out of assisting owners

in growing their businesses. Our wealth advisors take pride in helping members realize their

retirement objectives. So whether you dream of a new car, a bucket-list vacation, a home

remodel, putting your feet up and relaxing in retirement or something else, you can trust us

to help make it happen.

At Meriwest we continue to dream big when it comes to our community outreach efforts. In

concert with the Federal Home Loan Bank of San Francisco we were granted $180,000 to help

those in our community who otherwise would not be able to purchase a home. In addition, we

secured another $55,000 in grants to support Habitat for Humanity and Peninsula Family Service.

And a recent study conducted on Meriwest to measure the economic impact we had in our local

community showed that the credit union generated $108 million of economic value, supported

660 local jobs and produced $10.2 million in member benefits. That’s many dreams realized!

As you scan the pages of this report you’ll learn more about how we put our vision and values

to work for you — as a company and as individuals. I’m excited about the future and for the

76,000 members that put their trust in us. The possibilities are endless and it is our privilege

to help make your dreams become reality.

Julie Kirsch, President/CEO

M e r i w e s t A n n u a l R e p o r t 2 0 1 6

Lauren Burch, Secretary

Lauren Burch joined the Board of Directors as Secretary in 2015. With her comes a passion for organizations that bring about positive change, as demonstrated by her work on the Bay Area Promise Walk for Preeclampsia committee. Ms. Burch has extensive experience in the healthcare industry with a focus on employee engagement, internal communica-tions, messaging and culture. She is currently a Corporate Communications Manager at a surgical robotics company in Sunnyvale. Ms. Burch holds an MBA from the UC Berkeley Haas School of Business.

Stanley Chapman, Chairman

Stan Chapman has served as a member of the Board of Directors for 50 years. Mr. Chapman worked for IBM for 26 years in various financial management positions. He has served as Board member in all offices and as President of the League of IBM Credit Unions. He has also served as President of Children’s Playhouse of San Jose, as President of Temple Beth Shalom, and as Board member of Temple Emanuel. He has a Bachelor’s degree in Business Administration from CSU San Francisco and a certificate in Management Accounting.

Edwin Mach, Vice Chairman

Edwin Mach has been Vice Chairman of the Meriwest Board of Directors since June of 2015, and a Director on the Board since 2013. He previously served as an Associate Director since 2006. Mr. Mach has extensive experience in business and engineering ranging from IBM to Silicon Valley startups. Currently, he is a Senior Product Manager at Amazon Web Services working on new technologies for the enterprise. Mr. Mach graduated from UC Berkeley with a BA in Computer Science, where he was an IBM Thomas J. Watson Scholar, and an MBA from the UC Berkeley Haas School of Business, where he was a Berkeley Board Fellow. Mr. Mach also earned an MS in Computer Science at UCLA.

Karl Nigg, Treasurer

Karl Nigg has served as a volunteer for 48 years and as Board Treasurer from 1995 to 2013 and again since 2014. Mr. Nigg was a manager at IBM before being admitted to the California Bar in January 1971, and has been a practicing attorney for over 46 years. He has served as Judge Pro Tem in the Superior Court of Santa Clara County and is a member of the State Bar of California and the Santa Clara County Bar Association. Mr. Nigg earned a Bachelor’s degree in 1961 and a Juris Doctorate, Cum Laude, in 1970.

Charlie Munch, Director

Charlie Munch is serving his ninth year on the Board of Directors after completing six years as Chairman. Mr. Munch previously served on the Golden Bay Credit Union Board of Directors for 25 years. He joined the Meriwest Board as part of the merger with Golden Bay. He holds a BS degree from Duke University and an MS in Management from George Washington University.

He was employed for 20 years by the Northrop Grumman Corporation in Sunnyvale retiring as Business Area Manager for Information Technology. Prior to joining Northrop Grumman he served 26 years in the Navy retiring as Executive Officer Moffett Field Naval Air Station.

Dr. Arthur L. Jue, Director

Dr. Jue has served on the Board of Directors since 1994. He has extensive senior leadership experience in talent and organization development, technology management, and human resources. He holds a Doctorate in leadership, an MBA, and a BS in Marketing and Decision Sciences. Dr. Jue is a Certified Credit Union Director (CCD), speaks extensively, and has coauthored multiple books. He enjoys social entrepreneurship, independent filmmaking, martial arts, and playing the violin.

Scott Timpe, Director

Scott Timpe joined the Meriwest Board of Directors in June of 2014. Mr. Timpe has extensive business experience as a small business owner. He has been a franchisee of Carl’s Jr. Restaurants since 1992, and currently owns multiple locations. Previous to that he owned a cash register repair company. He holds a Bachelor’s degree in Business Management from San Jose State University.

2016 Board of Directors

“ All our dreams can come true, if we have the courage to pursue them.” – Walt Disney

Forty-eight years and still counting. For me, 1969 was a year of changes. My last child, Miriam, was born. I was promoted to 2nd line manager at IBM. I was in my last year of law school and, most important, Frank Rose asked me to join the Supervisory Committee of our Credit Union where I served for the next 20 years until I became a member of the Credit Union Board in 1989.

At the 1969 Credit Union Annual Meeting, Board Chairman Stan Chapman announced that the Credit Union had $10 million in assets and 4,000 members. Never in my wildest dreams could I have imagined that by year-end 2016 we would have assets over $1.3 billion. During those 48 years I learned about “people helping people,” “safety and soundness,” and the need to make certain that our member deposits were secure. And today I can state, without question, that all of those objectives, and more, were accomplished throughout those 48 years.

In 2016, Meriwest funded more than $310 million in mortgages; our assets grew by close to 10 percent; our Assets to Capital ratio was a solid 9.49 percent; and our Net Worth was $119 million with a healthy 8.88 percent Net Worth Ratio. In addition, during this past year we increased our spending on new technology by 11.2 percent to improve service to our members. With continued growth our capital and other ratios should also grow, providing additional security and benefits.

As I’ve said in past annual reports, I thank you for the trust you have provided Management, the Board, and the Supervisory Committee. Working as a team we have been able to support your dreams and achieve the accomplishments outlined above.

Karl Nigg, Treasurer

The primary function of the Supervisory Committee is to be the audit committee of Meriwest Credit Union. The mission of the Supervisory Committee is:

n To ensure or cause to be made by an independent auditor of the Supervisory Committee’s selection, an audit of the credit union’s books and records, and an examination of the business and affairs of the credit union for the year.

n To review acts and affairs of the Board of Directors, officers and credit union management, subject to the provisions of the credit union’s bylaws as well as the California Credit Union Law/Financial Code and the California Corporations Code.

n To cause accounts of members to be verified with the records of the credit union.

n To safeguard the reputation of credit union Board of Directors, officers and operating officials against unfair and unfounded criticism.

n To ensure and review the credit union system of internal controls that evaluates controls and risks.

n To encourage continuous improvement of credit union policies, procedures and practices, consistent with the Supervisory Committee’s mission.

The Supervisory Committee partners with Turner, Warren, Hwang & Conrad AC, to perform our comprehensive independent annual audit. Meriwest Credit Union, like all State credit unions, is subject to a review by State examiners. We are pleased to announce Meriwest has been found to be sound in both policy and practice. The annual audited statements as of September 30, 2016 present the financial position of the Meriwest Credit Union and Meriwest Mortgage without material exception.

James M. Hicks, Supervisory Committee Chairman

SUPERVISORY COMMITTEE

Karl Nigg, Treasurer

Supervisory Committee Chairman's Report

James M. Hicks

Phil Fluegemann

Harsha Vyas

Treasurer's ReportM e r i w e s t A n n u a l R e p o r t 2 0 1 6

Financial Statements

2016

As se t s :

Cash and Cash Equivalents 30,289,291

Investments 255,821,581

Loans to Members 1,020,137,826

Less: Allowance for Loan Losses (8,094,745)

Net Loans to Members 1,012,043,081

Fixed A ssets 6,800,328

Other A ssets 39,548,274

Total A s se t s 1,344,502,555

Li a bilitie s and Members’ Equit y:

Accounts Payable and Other Liabilities 11,979,548

Notes Payable 114,000,000

Total Liabilities 125,979,548

MEMBERS’ EQUIT Y

Members’ Shares 1,085,968,678

Non-Members' Shares 40,031,633

Reser ves 24,133,350

Undivided Earnings 95,306,048

Total Equity 92,522,695

Total Members Equity 1,218,523,006

Total Li a bilitie s and Members’ Equit y 1,344,502,555

CONSOLIDATED STATEMENT OF FINANCIAL CONDITIONS AS OF DECEMBER 31, 2016

$1,000

800

600

400

200

02012 2013 2014 2015 2016

Total Consumer Loans 1st Mortgage Member Business Loans Participation Loans

LOANS (in millions)

Member Shares Business Shares

$1,200

1,000

800

600

400

200

2012 2013 2014 2015 2016

SHARES (in millions) ASSETS (in millions)

2012 2013 2014 2015 2016

$1,400

1,200

1,000

800

600

400

200

Financial StatementsM e r i w e s t A n n u a l R e p o r t 2 0 1 6

2016

Interest from Loans 34,253,635

Interest from Investments 5,022,960

Total Interest Income 39,276,595

Dividends 1,773,382

Interest on Borrowings 854,851

Total Interest Expense 2,628,233

Net Interest Margin 36,648,362

Provision for Loan Losses 1,789,300

Net Interest Margin After Provision For Loan Losses 34,859,062

Non-Interest Income 11,718,887

Operating Expense 37,900,299

Non-Operating Income/(Expense) 327,885

Net Income 9,005,534

CONSOLIDATED STATEMENT OF EARNINGS AS OF DECEMBER 31, 2016

$1,000

800

600

400

200

02012 2013 2014 2015 2016

Total Consumer Loans 1st Mortgage Member Business Loans Participation Loans

LOANS (in millions)

Member Shares Business Shares

$1,200

1,000

800

600

400

200

2012 2013 2014 2015 2016

SHARES (in millions) ASSETS (in millions)

2012 2013 2014 2015 2016

$1,400

1,200

1,000

800

600

400

200

$1,000

800

600

400

200

02012 2013 2014 2015 2016

Total Consumer Loans 1st Mortgage Member Business Loans Participation Loans

LOANS (in millions)

Member Shares Business Shares

$1,200

1,000

800

600

400

200

2012 2013 2014 2015 2016

SHARES (in millions) ASSETS (in millions)

2012 2013 2014 2015 2016

$1,400

1,200

1,000

800

600

400

200

Notes to Financial Statements

Note 1 Total Investments are reported at book balance of $256,958,722. The market value of the Investment

portfolio at the close of business on 12/31/2016 was $255,833,726.

Note 2 Depreciation is computed on a straight line basis over the estimated useful life of the buildings.

• Furniture, fixtures, and equipment are depreciated on a straight line basis over their estimated useful life.

• Leasehold Improvements are depreciated on a straight line basis over their estimated useful life.

Note 3 Estimated Fair Value of the Credit Union’s financial instruments in accordance with FASB 107 is:

Note 4 Pension Plan: The Credit Union has a non-contributory retirement plan for the benefit of its employees

who meet specific length of service and age limitations.

Note 5 Credit Line: The Credit Union offers lines-of-credit for the benefit of its members. Currently, 10,703 members

have been authorized for a total commitment of $545,266,447. Loans outstanding are $208,735,319.

Loans $1,002,605,940

Investments $255,833,726

Shares $833,156,514

Notes Payable $4114,443,247

Net Fair Value of Financial Instruments $394,652

Land $1,843,986

Buildings $8,008,977

Less: Depreciation ($6,220,866) $1,788,112

$3,632,098

ContactsM e r i w e s t A n n u a l R e p o r t 2 0 1 6

Main Phone Number: 877-MERIWEST (877-637-4937)

Customer Contact Center: 408-363-3200 or 800-750-3775, contact_center@meriwest.com

Business Development: corp_communications@meriwest.com

Meriwest Online: www.meriwest.com

VIP 24-hour Audio Response Service: 408-363-3333 or 800-346-5706

SAN JOSE

Chesbro Financial Center – 5615 Chesbro Avenue

Cottle Financial Center – 5683 Cottle Road

Downtown Financial Center – 100 S. Second Street (inside the Market by Safeway)

Hillsdale Financial Center – 1795 Hillsdale Avenue

IBM Almaden Research Center – 650 Harry Road (IBM and Hitachi employees only)

IBM Silicon Valley Lab – 555 Bailey Avenue (IBM and Hitachi employees only)

SANTA CLARA

Santa Clara Financial Center – 2042 El Camino Real

MILPITAS

Milpitas Financial Center – 117 N. Milpitas Boulevard

SUNNYVALE

Sunnyvale Financial Center – 563 E. El Camino Real

MOUNTAIN VIEW

Monta Loma Financial Center – 580 N. Rengstorff Avenue

PALO ALTO

Palo Alto VA Hospital – 3801 Miranda Avenue, Building 101, Room C1-210

CUPERTINO — COMING SOON

MAIN St. Cupertino - 19459 Stevens Creek Blvd, Suite 120

For directions to locations, go to: www.meriwest.com/locations.

Locations

“ You are never too old to set another goal or to dream a new dream.” – C.S. Lewis

Your savings federally insured to at least $250,000and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency