Turning Up the Volume

1. Turning Up the Volume CU*Answers Annual Stockholders Meeting June 18, 2008

2. Agenda • Call to Order • Review 2007 Minutes • Review Financial Reports • Chair of the Board: Year In Review • Welcome New Owners • Election • Board Members • CEO Report • Turning Up the Volume: What it means as more and more people sing along (planning for the evolution of a network) • CFO Report • Board Election Results • Adjourn

3. Chairman’s Comments Turning Up the Volume From the Perspective of Your Board Chair

4. Your Board Ray Ward Dean Wilson Vickie Schmitzer Dave Wright Dave Ohman Joni Shinn Chris Butler These people start every day with no time to spare in just running their credit unions...and somehow they find the time to work hard at ensuring the future of this CUSO

5. 2008 CUSO of the Year • First CUSO ever to win NACUSO’s top award twice • The award’s actual name is • Companies don’t collaborate, people do • It all starts with your members and comes together through your focus CUSO Collaboration and Innovation Award

6. Supporting NACUSO Could Randy’s head get any bigger?

7. Get to Know Our New Owners • New Stockholders Since Last Year’s Meeting • Clawson Community CU(Clawson, MI) • Kensington Valley Community CU(Highland, MI) • Great Lakes Members CU(Dearborn, MI)

8. Board Elections Let’s hear from the candidates and get to the voting...

9. CEO Report Turning Up the Volume: What it means as more and more people sing along Planning for the evolution of a network

10. Growth, Success, Diversity, and Mission • During today’s presentation, two things were evident • Since the last time we met, CU*Answers has enjoyed a great deal of success and recognition from the marketplace • A theme of ownership and the need for the constant focus on what sets us apart as a network of businesses, owned by our customers and clients • These two ideas can actually be in conflict with each other, and we must plan for the evolution of our network

11. Growth, Success, Diversity, and Mission • Nothing challenges a mission more than the concepts of growth, success, and diversity • To be successful in carrying out your mission, you must grow, which is the first signal of success • With success comes those attracted to success, and a growing diversity of ideas about where to go, how to get there, and the expected returns • With growing diversity comes the anguish over the mission and the future direction of the firm • Some would call this simply growing pains, but it’s more problematic for a cooperative than for most businesses • Think about credit union-to-mutual savings banks conversions and what it means as owners begin to challenge what it’s all about

12. Planning for the Evolution of a Network • Cooperative or not, the cycle is real and we must all recognize the challenges as we stay committed to the mission • We must embrace the diversity of our partners • We must respond positively to the inevitable demand that we change with the marketplace • We must remain respectful of our need to be answerable, not only to our owners, but to our clients and to an industry • We must remain committed to being different and true to a collaborative framework • We must stay committed to what is timeless about our traditions, without remaining stuck in the past The “We” here is not a group without faces, people without names, or organizations that cannot be called on ... it is us When it’s time to call BS on our direction, we will be the ones who step up with the plan

13. Mission • As we grow, it is easy to confuse our day-to-day tasks with our big-picture mission • Twice within the last 60 days, Evie Rasmussen’s challenges have reminded me of our big-picture mission • Evie’s challenge to every business that claims to be a partner: “Before you claim to be my “partner” make sure you truly are. Don’t just sell me what your business needs to have sold – it needs to benefit my CU too. Do you really need to charge every CU for setting up with your company? Once the platform has been built with whatever processor, why continue the huge charges? So, we’ve got a Catch-22 – we can’t afford many of your services and yet we can’t afford not to and be competitive. The only way we can succeed is to lower the boundaries, roll up your sleeves and collectively use your minds to figure out how to help this fading industry.” From a blog posting dated June 4, 2008, at www.nacuso.org Build a business that is about the ultimate success of its clients and their futures

14. Mission • Evie is a CU*NorthWest Board member, and therefore a partner to every owner in this room • My response to the challenge: “For all of us to win in the future, network leaders must be free to change the financial models that drive their organizations in partnering with credit unions... “Once credit union investors free the firm to attack the challenges of the market with a new mindset, then it will be up to the leaders of the networks to step up. First, by ensuring that network businesses are free of designs that define their value by contract revenue flows, income redistribution models, and by secondary counter norms that claim to lift the participants and ultimately fund the asset value of the network ownership more than the asset value of the participants. The question will be, once free to redesign themselves, will network leaders be able to truly call BS on the models of yesterday?” From a blog posting dated June 5, 2008, at www.nacuso.org You are the investors in these networks; you are the future network leaders...we all might need a new mindset about business

15. Understanding New Financial ModelsCan We Agree That We’re a Different Kind of Business? • We must distribute our financials to owners and to the NCUA in order to be compliant • But more important than being compliant is the responsibility we all have to understand the economics of our CUSO and how our performance and returns are based on our commitment to our mission • In 2008, I was happy that people started to engagemore than ever before around our numbers...... I just wonder if was the result of endeavoring to better understand the mission, or simply a reaction to some blips on the radar, or even a temporary response to due diligence tasks

16. Can We Agree That We’re a Different Kind of Business?By Working Together, Can We Inspire Others? • Since we last met, we have been busy talking about how collaboration and network business design might be the key to redesigning our entire industry and the business processes related to building credit unions • Working on a new mindset

17. Dump the Movement, Start a Network • We’ve even started selling the concept to credit unions as a good marketing program for consumers • The network advantage, direct to members • “Movement” ...what does that say to members? • “Industry” ...what does that say to members? • “Network” ...what does that say to members? We think there is more to this than simply marketing to consumers But consumers are beginning to see the power in networks

18. We Presented cuasterisk.com as a Template Business network design driving us to: • Play where members play...Re-map your business processes to reach members • Focus inside-out and outside-in simultaneously...Re-map your business processes to distribute work • Respond to vested external innovators...Re-map your business processes to drive innovation • Expand your HR pool by leveraging peers...Re-map your business processes to capture the power of talent • Consider a new set of network pricing concepts...Re-map your business processes for earning engines

19. We Presented Our Success as an Example For Others It’s working for CU*Answers: • Capturing the benefits of scale • Projecting a larger persona than a standalone organization • Challenging us to diversify our focus • Enabling us to participate in more initiatives • Inspiring a competitive advantage • Amplifying the cooperative effect and aligning with our market We are selling it not only for CUSOs but as a process for every business leader

20. We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry Point to Point

21. What is the opportunity, and where is it focused? We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry Point to Point

22. We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry A Hub

23. What is the opportunity, and where is it focused? We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry A Hub

24. We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry A Network

25. What is the opportunity, and where is it focused? We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry A Network

26. We Sold Our Vision of Network CompaniesCUSOs: The Hubs of an Industry • Which is bigger? The opportunity of one, or the opportunity of all? • A network multiplies the work of one into an opportunity for all of its participants A vision where Evie’s opportunity is embedded and is equally important as all of the network’s opportunities...a true partnership

27. We Sold Our Role In a National Scene

28. We Sold Our Role In a National Scene

29. We Made the Commitment Be Different Working Under the Best Contracts • At the 2007 CEO Strategies event, CU*Answers took the next step in making sure that your balance sheet and asset valuations were paramount to our own • Contract changes that said we were about ongoing operations and execution more than our sale value • Assignment • Cancellation clauses • Anxiety about CU*Answers selling out “...secondary counter norms that claim to lift the participants and ultimately fund the asset value of the network ownership more than the asset value of the participants”

30. Walkin’ the Talk • All of the things we presented to the marketplace since we last met might make CU*Answers confident that we are walking the talk, but what do they say to you? • You are the ultimate judge...Are we on mission? • If not, I hope you’ll speak up right now and add your voice to figuring out how this CUSO should get there • If so, I hope you will speak up and carry that message to the rest of the credit union industry, so that even more will join this effort next year “...secondary counter norms that claim to lift the participants and ultimately fund the asset value of the network ownership more than the asset value of the participants”

31. Remaining Respectful of Our Need to be Answerable • Someone I admire very much said to me recently, “It’s not fun to debate with you, Randy.” • After a little soul searching, I worried that for all my passion, zealousness, and absolute drive to be understood and all-encompassing in my explanations, I end up discouraging you from digging deeper and adding your voice where it is so needed • In 2009, I will work hard to make sure that the experience is based more on the bedside manner of Dr. Jekyll than the demeanor of Mr. Hyde We are listening...I am listening

32. A Look at The Numbers Understanding how it all adds up dollars- and cents-wise is a little bit more complicated these days And explaining it to a casual third-party observer might your biggest problem

33. The Revenue Picture Continues to ChangeThe Chance to Earn Comes From a Growing Market Influence • CU*Answers direct revenues continue to evolve with new processes, internal capabilities, and new offerings • Projected for 2008: $25.090M • Just as important, CU*Answers’ influence through partnering with other CU*BASE networks and investing in new initiatives is starting to really add up • Xtend projected for 2008: $595K (- $40K) • eDOC projected for 2008: $3.056M (+ $500K) • CU*NW projected for 2008: $927K (- $10K) • CU*S projected for 2008: $231K (+ $2K) • Processing Alliance proj. for 2008: $475K (- $8K) Gotta watch out for Enron type hocus-pocus here...the important number is how many members we participate with (over 6 million) How relevant we can be to 6 million people is the big question in our future

34. Net Income & Patronage DividendsWhat do shareholders get, and what are we putting away for our future? Before Consolidation $1.305M $265K $1.305M includes an accrued expense for an eDOC Intangible Asset Write-off of $840K, netting $465K in GAAP net income (for details, check out Note 5 – Intangible Assets on the audited financials)

35. Intangible Asset Write-offs • Let’s take a second to talk about what events create a need for us to have an intangible asset write-off • What is different about eDOC than past events that created similar kinds of expenses? If this gets you going, think about tracking sales tax, income tax, and other miscellaneous taxes in 14 states Diversity definitely has an upside and a downside when it comes to accounting

36. Return on InvestmentHow did things work out in 2007? 2007 Gross Income Submitted by Owners to CU*Answers $ 15,284,983(Includes all vendor pass-throughs) 2007 Patronage Dividends Paid $ 200,000 2007 Class A Stock Dividends Paid 86,515 (4.00%) 2007 Class B Stock Dividends Paid 22,304 (4.00%) 2007 Interest Paid Credit Unions on Loans 520,788(~9.00%) Total Revenue Returned to Credit Unions $ 829,607 Return Per Total Dollars Received: $0.0833 $830K  $9,964K (excludes vendor pass-throughs) = $ 0.0833 return per CU*A $ received Glass half full: “All this, and great investment in our future through eDOC, too!” Glass half empty: “Pretty good, but that shareholder value drop of $31.04 dampers my enthusiasm.”

37. Projecting Shareholder ValueAfter the 2008 dividend, what shape is your investment in? • In 2006, we invested to jump to the future with a new endeavor • Depending on when you bought in, your perspective might be different Ownership price 1985: $10, 1991: $59.31, 2000: $176, 2005: $460, 2008: $460 The eDOC Innovations Years The delta is the additional capital paid in to participate as an owner, paid so as not to dilute the ownership value of the pioneers before you

38. Shareholder Value Projection for 2008New Math For a Company Extending Itself By Investment • Very rough numbers, and very simple concepts For the details, you need to understand the fine print of the Audited Consolidated Financial Statements you receive every year

39. Investing in eDOC InnovationsSummarizing the Process • Quarter after quarter, year after year, CU*Answers has reported positive financial performance, and everyone has become accustomed to the trend • Then, wham! ...a dip, a drop, a left-hand turn, almost overnight (well, kind of, if you consider 2 years to be overnight) • But it certainly got people wondering about the investment and how it worked • This document is to give you a little history and a quick summary of the process

40. Members Served • 2008 has been a great conversion and sales year – we go into 2009 with new clients waiting for their conversion date • The numbers below represent CU*Answers alone, and these days, that’s not the whole story...keep your eye on cuasterisk.com

41. We Can Help With That Casual Third-Party Observer • Remember Randy’s earlier challenge to all of us to remain respectful of our need to be answerable, not only to our owners, but to our clients and to an industry • Our Board is always ready to talk about their role in leading this firm – reach out to Chris • Randy is always ready to talk about our team’s accountability and what that means to you – reach out to Randy • I am always available to give you the dollars and cents background – reach out to me Bob Frizzle, CFO bfrizzle@cuanswers.com 800-327-3478, ext. 142

42. Conclusion(Randy just has to have the last word) Good night!