Our Mission:To provide Foothill members with excellent banking productsand services, backed by exceptional service.

Our Vision:To penetrate our schools and hospitals to 50% of potentialmembership, resulting in long term, meaningful relationships.

Our Core Values

Our Contact & Branches• MAILING ADDRESS: P.O. Box 660130, Arcadia, CA 91066-0130• ARCADIA BRANCH: 30 S. First Ave. Arcadia, CA 91006• COVINA BRANCH: 928 N. Citrus Ave. Covina, CA 91722• AZUSA BRANCH: 312 E. Foothill Blvd. Azusa, CA 91702• GLENDORA BRANCH: 645 S. Lone Hill Ave. Glendora, CA 91740• TELEPHONE: 626-445-0950• WEBSITE: www.foothillcu.org

EmbracingChange2013

Annual Report

• Striving for service excellence• Passionate, motivated team members• Long-term team member development• Integrity and mutual respect for others• Open and honest communication• A fun, friendly team environment

Foothill Federal Credit Union’s Supervisory Committee consists of four membervolunteers appointed by the Board of Directors to serve on behalf of the mem-bership. The Supervisory Committee oversees accounting practices and ensuresthat the Board and Management are directing the credit union’s operations incompliance with applicable regulations. Their responsibilities include:

• Selecting a CPA firm to perform the annual external audit

• Ensuring that internal audit work is performed in a thorough and timely manner

• Assessing the adequacy of the credit union’s internal controls

• Guarding against potential fraud and other losses that could adversely impact the membership

The Supervisory Committee contracted with Richards and Associates, a CPA firmspecializing in credit union audits, to conduct the external audit of the creditunion’s financial statements as of and for the year ending December 31, 2013.The Supervisory Committee has approved the audited financial statements and is

in concurrence with the auditors that the statements do present fairly the finan-cial position of the credit union as of December 31, 2013.

On behalf of the Supervisory Committee, I want to thank the Board of Directorsand team members of Foothill Federal Credit Union for their dedication to pro-tecting member assets and operating with integrity and sound business practices.

Foothill’s Supervisory Committee:Larry Williams, Member, Tamara Murphy, Chair, Marc Chaldu, Member, DavidJaynes, Secretary, Jill Underwood, Board Liaison (not pictured)

Supervisory CommitteeReport

Foothill’s Executive Team (left to right): Chris Andersson, VP Operations, Jackie So,VP Finance, Brian Hall, President/CEO, Judy Schaeffler, VP Lending,

Gabriel Juan, VP Technology

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The Board of Directors is composed of seven dedicated volunteers, led by Chair,Mike Abata, who has dedicated 15 years to Foothill, promoting excellence inevery aspect of the organization. Board members volunteer their time and ex-pertise to ensure that you, our members, have access to excellent banking prod-ucts and services, backed by exceptional service. Board membersalso work diligently to ensure that Foothill sustains its strong finan-cial condition and that we anticipate your future financial needs.

2013 Financial Performance

Net Income for 2013 totaled $3.9 million, resulting in a Return onAssets (ROA) of 1.3 percent. Strong earnings helped Foothill im-prove its Net Worth ratio from 11 to 12 percent in 2013. A NetWorth ratio over 7 percent is considered “Well Capitalized” by ourfederal regulator the National Credit Union Administration (NCUA)and compares favorably with the “peer average” for Net Worth of10.8 percent. Member deposits increased from $246 million to$255 million, a $9 million or 3.7 percent increase. On the assetside of the balance sheet, member loans grew from $115 millionto $124 million, a 6.3 percent increase.

In March 2014, Foothill received an unqualified or clean opinionfrom our audit firm, Richards and Associates, for the 2013 fiscalyear. We were also examined by the NCUA, and received an excellent reportand rating. NCUA reviews all the important credit union financial performancemeasures including: Capital, Asset Quality, Management, Earnings and Liquidity.

In November 2013, we completed a merger with Azusa City Employees FCUadding 450 members and a 4th branch to the other 3 branches available tomembers. Azusa City Credit Union brings a rich history of providing financialservices to the city employees of Azusa. The new Azusa branch is located infront of the historic Azusa auditorium and opens accounts, processes loans andgeneral non-cash account support. In conjunction with the new Azusa branch,Foothill installed a “cash dispense” ATM in the lobby of the police station justwest of the branch.

Our Real Estate loan team continued to provide a wide range of mortgage prod-ucts including, no-cost fixed rate conforming mortgages, jumbo mortgage loans,and adjustable rate mortgage loans. Foothill created a unique 5/1 Arm Loanfor our members with a maximum of 1 percent per year adjustment and a life-time maximum increase (or Cap) of 3 percent. This loan has proven to be verypopular and poses less interest rate risk to the members than the typical ad-justable rate mortgage.

Financial Education and New Products

In 2013, our team provided member education for home buying and vehiclepurchasing, two of the most significant purchases most members will make intheir lifetime. These educational seminars were well received and will be offeredagain in 2014.

Two significant improvements in technology during 2013 were the introductionof Remote Deposit Capture (RDC) and Debit Card Instant Issue. Remote DepositCapture was introduced in June of 2013 and members quickly began using thisconvenient method of depositing checks to their account. Using a smart phone,members take a picture of the check and then electronically transmit it toFoothill for deposit. By year-end, member deposits averaged over 1,000 checksa month, reducing time visiting a branch or ATM. In December, we introducedbranch technology called “Instant Issue,” which is immediate issue of a new orreplacement Debit Card, at our branches. Members can use this Debit Card im-mediately, as compared to waiting 5 to 7 days for a card to be mailed from aprocessor.

We are always looking for ways to make buying a vehicle more convenient formembers. Last year we introduced two convenient tools, 1) Loan Checks allowpre-approved members to take a credit union cashier’s check with them whilethey shop for a vehicle. To make the purchase, you complete the purchaseamount at the dealership, eliminating another trip to your credit union or thedealer, and 2) E-DOCS, allow members to sign consumer loan disclosures elec-tronically via email, improving convenience for members.

Financial Strength

Statement of Financial Condition

Balance Sheet 2013 2012AssetsCash and Cash Equivalent 15,394,802 14,489,361 Investments 143,353,582 143,358,407 Loans Receivables, Net of Allowance for Loan Losses 123,569,641 115,188,840 Accrued Interest Receivable 628,782 629,015 Property and Equipment, Net of Depreciation 2,866,738 2,638,245 NCUA Share Insurance Deposit 2,505,173 2,425,841 Prepaid Expenses and Other Assets 1,934,977 2,460,377

Total Assets 290,253,695 281,190,086

LiabilitiesMember Shares 254,638,785 245,532,710 Accounts Payable and Other Liabilities 2,327,274 2,717,796 Total Liabilities 256,966,059 248,250,506

Members' EquityAppropriated (regular reserve) 2,583,811 2,507,811 Unappropriated (undivided earnings) 32,157,588 28,273,301 Accumulated Other Comprehensive Income (1,453,763) 2,158,468 Total Members' Equity 33,287,636 32,939,580

Total Liabilities and Members' Equity 290,253,695 281,190,086

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Azusa City Credit Union brings a rich history ofproviding financial services to the city

employees of Azusa.

Giving BackTo Our Communities

Foothill sponsoredbanners for the MonroviaUnified School District to remind parents and studentsthat good attendance doesmatter.

Foothill has maintained its efforts to be a community partner. In2013, existing partnerships were strengthened and new relation-ships were forged.

Through close ties with local Chambers of Commerce, city govern-ment, schools, hospitals and businesses, Foothill has made astrong footprint in the San Gabriel Valley.

A volunteer committee, Team Foothill, was created and launchedin 2013- giving Foothill team members a unique benefit to volun-teer with local charitable organizations and Select EmployerGroups (SEGs).

Foothill’s commitment to community support and the bettermentof society was evident through participation in events such asMaryvale’s Family Summit, the Duarte Youth Summit, MonroviaPerforming Arts Center’s Music Man production, Glendora’s Tasteof the Village, Glendora and Monrovia community “read-in,”Azusa’s Toast of the Town, and much more.

Foothill has become the community “go-to” for resources in finan-cial education and financial service.

Vice President, ChrisAndersson with Priscilla Samadi(left), a student at Arcadia HighSchool and active member ofFoothill’s Student AdvisoryCouncil.

Above: Team members StacyArena and Jamie Moreno volunteerwith the Monrovia Performing ArtsCenter.Right: Melinda Dilwicius donates jeansto help Alverno High School studentswith a service project in November2013.

Foothill team membersand participants of the volunteercommittee “Team Foothill” helpmake Thanksgiving baskets at Cityof Hope. Team Foothill waslaunched in June 2013.

CEO Brian Hall takes acelebratory shot with threescholarship recipients at the2013 Annual Meeting.

Vice President JudySchaeffler delivers donatedgifts to Foothill Unity Center,along with team membersStacy Arena, Ardo Baharian,and Russell Domingo. The giftsgo to underprivileged youth inthe San Gabriel Valley.

Foothill completed its sec-ond Staff Lounge Makeover con-test. Working over the summerbreak and having a grand revealwhen teachers returned to work inAugust. Beardslee ElementarySchool in Duarte, CA was the luckyschool selected for the make-over.