2020 ANNUAL REPORT Mutual Funds and Other Securities Are Offered Through Credential Securities and Qtrade Advisor, a Division of Credential Qtrade Securities Inc

2020 ANNUAL REPORT Mutual funds and other securities are offered through Credential Securities and Qtrade Advisor, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. Mutual funds are offered through Credential Asset Management and Qtrade Asset Management (a tradename of Credential Asset Management Inc). Envision Financial Wealth Management, Valley First Wealth Management and Island Savings Wealth Management are divisions of FW Wealth Management Ltd. which is a wholly owned subsidiary of First West Credit Union. FW Wealth Management Ltd. is a licensed life insurance agency offering financial planning, life insurance and investments. CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................ 1 1. A Message from the Board Chair and the CEO ........................................1 2. Management’s Discussion and Analysis ..................................................5 3. Disclaimer on Forward-Looking Statements............................................5 4. Business Profile and Organizational Overview ........................................6 5. Financial Highlights ...............................................................................12 6. Member, Employee & Community Highlights ..........................................17 7. Economic Review & Outlook ...................................................................23 8. Financial Performance 2020 Overview and Line of Business Review ....24 9. Discussion on Financial Performance ....................................................29 10. Risk Management ...................................................................................42 11. Internal Controls Over Financial Reporting and Disclosures .................53 12. Critical Accounting Estimates ................................................................54 13. Future Changes to Accounting Policies ..................................................54 14. Compensation Practice ..........................................................................55 CONSOLIDATED FINANCIAL STATEMENTS ...........................................................62 GOVERNANCE REPORT ......................................................................................116 1 A MESSAGE FROM THE BOARD CHAIR AND THE CEO CHARACTER MEMBERS CAN COUNT ON “Adversity does not build character, it reveals it.” If this is true—and we believe it is—then 2020 was a year of personal and corporate character coming into plain sight. Just as spring arrived last year, First West Credit Union—along with all of Canada—was plunged into a season of adversity, the likes of which we had not seen in generations. How would we respond in the face of a global pandemic and what would it reveal about the character of our credit union? This question and a multitude of related ones ran through our minds, demanding answers. As we look back one year later, we are proudly able to say that First West responded how we had hoped: thoughtfully, generously and confidently. Our “why”—to simplify lives and help our members and communities thrive—and our co-operative values compel us to stand with and support one another in good times and in difficult times. That is why, when our province began to feel the impact of the pandemic, First West showed up. We were there for our members, employees and community partners. A Helping Hand, However Possible We recognized quickly that difficulties brought on by the pandemic would stretch resources within the charitable sector, which we have proudly partnered with for decades. To help alleviate some of the shortfall, the First West Foundation launched the Community Response Fund in May 2020. The fund provided $500,000 in grants to local charities wrestling with the impacts of COVID-19, especially those focused on food security and basic needs for youth, families and seniors. In total we invested more than $3.4 million in our communities last year. When the challenges of COVID-19 began to emerge, we saw the needs around us and responded with: y Complimentary housing for frontline health care workers in Victoria, Kamloops, Kelowna and Abbotsford y More than $100,000 in responsive funding to local community and healthcare foundations y $500,000 in funding to charitable organizations focused on food security and basic needs for youth, families and seniors impacted by COVID-19 y $481,000 to help charities in our communities address the economic impacts of COVID-19 in their organizations y $110,000 to our signature causes The Full Cupboard and Feed the Valley, which support local food banks What is more, our Get a Meal, Give a Meal campaign provided creative incentives for our members to continue supporting local member businesses and local food banks during public health orders in the summer of 2020. Through the program, we offered members a $25 discount on food purchases of $50 or more at participating member-owned restaurants, while triggering a $5 donation to a local food bank. Our efforts helped to generate more than $70,000 in business for local restaurants and $8,130 for local food banks, a total equivalent to 24,390 meals for those in need. ANNUAL REPORT 2020 | MANAGEMENT’S DISCUSSION & ANALYSIS 1 We are also happy to report that our annual Make a Difference Days went ahead as planned in October. More than 150 volunteer activities were completed by employees who took the opportunity to volunteer 203 hours with charities in our communities, virtually and physically, where approved safety precautions were in place. Making a Way for Members For many years First West’s Board of Directors and senior leadership team has acted according to a firm belief that our members need a well-prepared, prudently managed, operationally agile and financially strong credit union, ready to weather seasons of difficulty. And so, when COVID-19 arrived at Canada’s doorstep, we did not need to pivot, as many organizations did. Instead, we responded from a position of strength and concentrated on accelerating key components of our existing strategy, in order to address our members’ most urgent day-to-day needs. Flexible options for banking services and safe in-person service and advice at branches quickly became paramount, and the significant investments we have made in new technologies in recent years to enhance our banking delivery channels rose to the fore. When our society needed to bank differently to stay safe—and keep others safe—we were ready: y Through online and mobile banking, our Member Advice Centre and THE EXCHANGE® Network of ATMs, we continued to provide day-to-day banking service to members during the most severe phase of public health orders. y We mobilized 50 additional employees for our telephone-and-email-accessible Member Advice Centre and extended its hours of operation. y Within just a few days of B.C. declaring a state of emergency in March 2020, we leveraged our partnerships with industry-leading technology providers to transition many branch and back office employees to serve members securely and safely from home. y We removed deposit holds on tens of thousands of accounts to ensure many of our members had instant access to funds when they deposited cheques at ATMs or with Deposit Anywhere™ on our mobile app. y We accelerated releasing new features in our digital banking platform so members could make deferral payment requests, apply for Canada Emergency Business Account (CEBA) loans or make Canada Revenue Agency direct deposits safely online. y We fast-tracked our e-signing technology for personal and business lending documents to enable members to sign from the safety and comfort of their own homes. y We modified our branches according to health authority directions, for the safety of members and employees. y We made it possible for members facing financial hardship resulting from the pandemic to fast-track their access to our Back On Track program, which provides financial relief in the form of a payment reduction or deferment. y We were among the first credit unions in Canada to offer the federal government’s CEBA to business members facing financial difficulty due to the pandemic. y We partnered quickly with Export Development Canada and the Business Development Bank of Canada to provide small and medium businesses access to additional financial relief. ANNUAL REPORT 2020 | MANAGEMENT’S DISCUSSION & ANALYSIS 2 Our ability to be there for members in these ways and more during times of difficulty is a powerful testament to our size and financial strength. We would be remiss, however, if we failed to acknowledge that we also made the difficult-but-right decision to consolidate five branches, for the continued long-term health of the credit union. We acknowledge these consolidations resulted in a change for some of our members. Even so, we know that by making these changes, we can refocus resources toward new channels, which will help us reach even more British Columbians with the power and possibility of co-operative banking. Added Value Never Taking a Backseat We are extremely proud to say that despite the unusual challenges of 2020, we did not waver from our commitment to continually produce real value that improves our members ever-evolving banking experience. We expanded our digital banking features as we added the ability to open select chequing, savings and term deposit accounts within our online banking platforms and our mobile apps, and rolled out Google Pay™ and Samsung Pay. We also introduced members and potential

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