2022 marked the third year of the pandemic and the third year in which we faced a series of historic economic disruptions. The major supply chain issues and labor shortages of the pandemic's first two years, along with Russia's invasion of Ukraine, led to the biggest spike in inflation the U.S. had seen in 40 years. To mitigate this inflation, the Federal Reserve raised interest rates at the fastest pace in four decades. This, in turn, led mortgage rates to climb to levels not seen in over 20 years, significantly cooling the housing market.

This past year our members felt the rising prices everywhere—from the gas pump to the grocery store to the cost of buying a home. Along with our members, we had to adapt to this economic turbulence. Rising rates and the shuttering of the secondary loan market meant we had to slow our solar, home improvement, and mortgage lending. As the possibility of recession loomed and the financial outlook started to become more challenging for our members, we pivoted our focus. We raised savings rates and added new savings options, giving our members more ways to reinforce their financial security during these uncertain times. 

Though we faced significant challenges in 2022, we're pleased to report we achieved a net income of $6.2 million. We originated an all-time high of over $630 million in total loans to our members, a 25% gain over 2021. Deposit balances grew by 8% to $1.0 billion, as our members saw above-market returns on their savings after years of low interest rates. We also welcomed over 6,500 new members to our credit union.

We're proud of some significant achievements we had over the last year. Our Dealer Direct Lending program completed its expansion to all 50 states, giving even more people access to affordable financing for home improvement projects and solar energy. Thanks to this effort, we funded over 5,200 home and commercial solar systems, which will save an average of 22,500 metric tons of carbon emissions every year. Just to put this in perspective, that's the equivalent of taking over 4,800 gas-powered cars off the road for an entire year.

We also continued our efforts to expand banking and lending access to the underserved cannabis industry, where employees and businesses continue to face barriers to getting even the most basic banking services. We successfully launched our cannabis banking awareness campaign aimed at educating people in the cannabis industry about the banking services we can provide them. We are proud to currently offer banking for the cannabis industry in 19 states.

Thanks to our members choosing to do their banking and financing with Salal, we were able to once again honor our commitment to give 5% of our annual income to help people and causes in the communities we serve. We donated over $400,000 in support of a wide range of organizations, such as HealthPoint, Rebuilding Together, GRID Alternatives, the Renton Family Foundation, and King County Nurses Association. Including this past year's giving, we've committed over $2.1 million for future charitable donations to our local communities since 2017. See the Community Impact section of this report to learn more about the impact Salal members made in 2022.

As we look ahead to 2023, we understand continued economic hardships have created a challenging environment for many of our members. In response, we are prioritizing our focus on helping our members grow their savings, adding new savings options and reducing fees to help them weather these uncertain times. Despite the challenges we face, our credit union remains healthy and well-positioned for future success. We remain committed to our members' financial well-being and will continue to invest in our digital technology to improve their ability to easily access banking services, tools, and solutions.

In this coming year, we'll mark Salal's 75th anniversary. Through the good times and the challenging ones, we've stayed focused on empowering our members and our communities. At the core of our mission is the belief that when we work together, we're more powerful than when we go at it alone. We can unlock more opportunities, help more people realize their potential, and make the future a better place for everyone.

All that we accomplished in 2022 is thanks to the trust and loyalty of our members and the tireless dedication of the Salal team. On behalf of Salal leadership and our all-volunteer Board of Directors, we thank you for the opportunity to serve your financial needs. We look forward to all that we will achieve together in this coming year.

Sincerely,

Brian Luong, Chair, Salal Board of Directors

Russell E. Rosendal, President and Chief Executive Officer

The mission of the Supervisory Committee is to oversee the operations of the credit union to protect the investments of its members. The Committee meets with management, independent external auditors, and governmental examiners to ensure the credit union operates in compliance with the requirements of state and federal regulatory agencies.

The Supervisory Committee meets regularly with management to review and evaluate the credit union’s operating policies; ensure internal controls are defined, effective, and followed; review and recommend policy changes to the Board of Directors; and ensure sound operating procedures are adhered to in accordance with established policies.

The Supervisory Committee works with the credit union’s internal auditor to make certain the activities of the internal audit department are reported to the Board of Directors. The internal auditor's reports and recommendations have increased the Committee’s visibility and effectiveness internally and externally. This is reflected in the positive feedback received from Salal surveys, regulators, and independent auditors. The Committee also serves as the Board of Director’s liaison with the independent auditors in carrying out the annual audit opinion, as well as reporting the auditors’ findings and recommendations to credit union members at the annual meeting. In the 2021 audit, our independent auditors, Moss Adams LLP, CPAs, issued an unqualified opinion.

The Supervisory Committee finds the reporting and operating procedures of the credit union, as well as the actions and policies of the Board of Directors, committees, and management, to be in compliance with applicable laws and regulations.

ALI SEALS

CATHERINE BAILEY

BRIAN LUONG

Chair

ALAN LEDERMAN

Vice Chair

JOE LePLA

JOHN ZIELONKA

DICK WOO

NISHAT AKHTER

QUYNH-ANH NGUYEN

SOPHIE BROUGHAM

RUSSELL E. ROSENDAL

President & CEO

BOB SCHWEIGERT

SVP, Chief Lending Officer

RANDY CLOES

CMA, SVP, Chief Financial Officer

JUDY LOVELESS-MORRIS

SVP, Chief Diversity & People Officer

SKOTT POPE

SVP, Chief Digital & Strategy Officer

Brian Luong - Chair

Alan Lederman

Joe LePla

Russell E. Rosendal

Chad Cheney - Chair

Eric Oliner

Catherine Bailey

John Zielonka

Annette Murphy

Randy Cloes - Chair

Joe LePla

Annette Murphy

Sophie Brougham 

Nishat Akhter

Jeffrey Gabeau  

Russell E. Rosendal

Bob Schweigert

Brett Ballman

Kevin Knowles - Chair

Ali Seals

Magnus Andersson

Daniel Hirsty

Russell E. Rosendal

Bob Schweigert

Randy Cloes

Catherine Bailey - Chair

Brian Luong

Dick Woo

Joe LePla

Alan Lederman

Ali Seals

Sophie Brougham 

Nishat Akhter

Quynh Nguyen

Alan Lederman - Chair

Sophie Brougham 

Jason Kunkel

Andrew Makori 

Russell E. Rosendal

Bob Schweigert

Randy Cloes

Skott Pope

Kari Stenslie 

Brett Ballman

John Zielonka - Chair

Nishat Akhter

Quynh Nguyen

Russell E. Rosendal

Skott Pope

Michael Bishop

Natalie VanderVegt

Matt Vance 

Megan Wozniak

Christian Grunert

Matthew Heitland

Keith Price

Sylvia Pope

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At Salal Credit Union, we believe that when people team up and work together, we can accomplish just about anything. We've seen this firsthand over our 75-year history as a member-owned financial co-operative. We know, as a financial institution, we have a crucial role to play as a facilitator and catalyst for positive change. Here’s a look at some of the positive change your membership helped make possible in 2022.

in nursing scholarships and career development.

for critical home repairs.

to promote social equity.

to solar energy access and workforce training.

Our vision is to empower communities and unlock opportunity for the benefit of everyone. Thanks to members like you, in 2022 Salal was able to continue our commitment to making a positive impact in the communities we serve. Our charitable giving was once again centered on four focus areas, guided by our all-member Board of Directors: healthcare, housing insecurity, social equality, and renewable energy. Beyond community giving, we continue to offer our members ways to lower their carbon emissions with affordable financing for solar energy and electric vehicles. Below are some highlights from the many causes we proudly supported this past year.

We were very pleased to continue our partnership with Rebuilding Together in 2022. Salal and the Salal Foundation once again provided support for the She Builds, a program focused on advancing the housing and community issues affecting women. Salal's support this past year included seven capacity-building support grants of $10,000 to launch or expand existing She Builds program. Critical home repairs were funded in communities where our members live in Connecticut, California, Tennessee, Colorado, Texas, and Washington.

A major community impact highlight from this past year was Salal being named 2022 HealthPoint Partner of the Year this past September. As a longtime supporter of this community health network, it's a great honor to be recognized by the HealthPoint team. Salal members made it possible for us to give over $46,000 in funding to HealthPoint last year. We also continued our long tradition of support for King County Nurses Association, with $34,000 in funding for scholarship and a unique grants program that empowers nurses to direct funding to address specific needs they see among the people they serve. One such project funded seasonal influenza vaccines for new parents and family members who had close contact with infants.

"Thank you to Salal Credit Union for establishing the Community Connection fund with us. The fund is absolutely invaluable. It is something we are able to leverage in the community with our community partners, with patients who are very high-risk, have significant needs, and have very unusual gaps in their care. Bridging these gaps in care, where there truly are no other options, is one of the most successful strategies that I have come across to really build a future for patients in our community."

Sarah Jemley,

HealthPoint Care Support Director

Part of our support for renewable energy this past year included over $30,000 in funding for GRID Alternatives, an organization that works to build community-powered solutions to advance economic and environmental justice through renewable energy. Salal’s financial support this year funded four solar industry workforce development programs. These programs provided hands-on job training opportunities with a focus on making opportunities accessible and inclusive for groups that have been traditionally underrepresented in the solar industry, including women, people of color, and those impacted by the criminal justice system.

Our efforts to promote social equity and expanded access to opportunity in our communities took many forms this past year. Notable projects included $15,000 to support the building of the Renton Family First Community Center. The new community center will bring quality recreation, education, and wellness programs and services to the historically underserved communities in Renton's Benson Hill and Cascade neighborhoods. The community center is expected to open in spring 2023. 

As Brian and Russ mentioned in their report above, Salal funded the installation of 5,202 solar systems in 2022 through our Dealer Direct lending program. When added together, these solar systems will produce an estimated 52,020,000 kwh of emissions-free electricity for homeowners in their first 12 months—potentially preventing 22,504 metric tons of carbon emissions. This is the equivalent emissions of 55,858,451 miles driven by an average gasoline-powered car. Or, more optimistically, it's also equivalent to the carbon sequestered by 26,632 acres of U.S. forests in one year. 

Sources for solar and carbon emissions stats:

United States EPA "Greenhouse Gas Equivalencies Calculator"

"How Much Power Does A Solar Panel Produce?," Forbes, 2022

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