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JSC FEDERAL CREDIT UNION

ANNUAL REPORT 2013

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OUR MISSION

OUR COMMITMENT

Maximize member satisfaction and financial stability

Enable our members to become financially self-sufficient and successful

2013 ANNUAL REPORT

LOCATIONS · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

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JSC FEDERAL CREDIT UNION

To Members and Friends:

I am honored to present the 2013 Annual Report for JSC Federal Credit Union (JSC FCU). The

Credit Union has had another year of exceptional accomplishments. JSC FCU experienced

remarkable growth in 2013, adding more than 10,385 new members and growing in assets

by $82,809,559. In addition, JSC FCU added

273 new Community Business Partners to its

field of membership, which brings the total

to over 1,700 ways a person can qualify to

be a Credit Union member. These affiliations

continue to be an essential source of Credit

Union membership opportunities in the

communities we serve.

As technology evolves, JSC FCU continues to take steps toward improving the ways in

which we communicate and interact with members. The Credit Union also continues to

develop and implement online and mobile tools that help members manage their JSC FCU

accounts easily, quickly and securely.

In April 2013, JSC FCU opened its 19th branch. The Pearland Parkway location offers a

fresh and modern design, a 24 hour walk-up ATM, and interactive touchscreen kiosks

where members may watch product tutorials and education modules. Breaking away from

traditional branch layout, this branch has an open concept and utilizes cash recyclers to

dispense cash. This concept allows staff to be more personable in order to maintain and

build relationships with our members.

In December 2013, JSC FCU launched

Express Deposit which allows members to

deposit checks into their JSC FCU account

by using the camera on their mobile device. Once the member completes online banking

enrollment, the member has access to Express Deposit on their mobile device. The

a letter from our chairman

FROM THE CHAIRMAN ······················································································································································

JSC FCU CONTINUES TO TAKE STEPS TOWARD

IMPROVING THE WAYS IN WHICH WE COMMUNICATE

AND INTERACT WITH MEMBERS.

IN APRIL 2013, JSC FCU OPENED ITS 19TH BRANCH.

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JSC FEDERAL CREDIT UNION

members can enjoy the convenience of making a deposit anytime and anywhere while

having the peace of mind that the transaction was processed safely and securley.

JSC FCU continues to be an excellent corporate citizen within the communities it serves.

The Credit Union donated monies and personal time to numerous charitable and community

development organizations in 2013. The Credit Union also continues to offer financial

and volunteer support for multiple outreach organizations whose efforts directly benefit

the members of our community with modest means. In terms of direct involvement, the

Credit Union offers financial education opportunities to members and nonmembers alike

by hosting free seminars on such topics as Home Buying, Identity Theft and Understanding

Credit, free access to our MoneyFIT program, as well as partnering with organizations like

the YMCA, and elementary schools that host events designed to enhance financial literacy,

wellness and education to all ages.

In closing, I am pleased to report to our

membership that your Credit Union is

financially safe and sound, well capitalized,

and prospering in all the ways we hold

valuable. In its 52nd year of business, your Credit Union continues to be a vital asset to its

members and to the greater communities it serves and supports. We realize that you have

many options when choosing a provider for financial needs, and we appreciate your choice

of JSC Federal Credit Union as your financial service provider.

Sincerely,

David W. WhittleDavid W. WhittleChairman, JSC Federal Credit Union

····················································································································································· FROM THE CHAIRMAN

YOUR CREDIT UNION IS FINANCIALLY SAFE AND

SOUND

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JSC FEDERAL CREDIT UNION

2013 AT A GLANCE

The credit union only exist because of our members. At JSC FCU, we treat our members the way we want to be treated. Our dedication shows each year as more people choose us as their financial institution.

JSC FCU strives to promote the benefits of credit union membership to local businesses in our community. This is a great way for local businesses to enhance their employee benefits package at no charge. Taking care of our community through educating its work-force about financial responsibility remains a core mission of JSC FCU.

At JSC FCU, we strive to serve our members’ financial needs with our products and services. When we take care of our members, we believe financial success will follow.

MEMBERSHIP GROWTH

COMMUNITY BUSINESS PARTNERS

ASSET SIZE{BILLIONS}

2011

2012

2013

115,929118,390

123,622

2011

2012

2013

115275273

*Added per year

2011

2012

2013

$1.57$1.69

$1.77*Billion

YEAR AT A GLANCE ····························································································································································

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

ASSETS

Total Loans 448,163,057 414,771,799 349,099,916

Less: Allowance (1,448,626) (1,407,350) (1,806,671)

Net Loans 446,714,430 413,364,449 347,293,245

Cash & Investments 1,285,053,475 1,227,836,219 1,174,211,227

OTHER ASSETS

Fixed Assets 19,597,878 19,003,679 18,518,067

NCUA Share Insurance Deposit 15,066,270 14,271,443 12,957,547

Other Assets 5,591,412 14,792,119 14,295,957

TOTAL ASSETS $1,772,023,468 $1,689,213,909 $1,567,276,043

LIABILITIES, SHARES & EQUITY

Total Liabilities 5,316,847 1,882,113 6,679,653

Total Shares & Deposits 1,590,977,220 1,520,969,887 1,404,382,929

Total Equity 175,729,399 166,361,909 156,213,461

TOTAL LIABILITIES, SHARES & EQUITY $1,772,023,467 $1,689,213,909 $1,567,276,043

OPERATING INCOME

Total Interest on Loans to Members 17,812,216 18,778,950 20,065,012

Income from Investments 13,305,711 13,952,095 15,342,070

Fee and Other Operating Income 13,869,027 12,750,284 12,902,547

Total Gross Income 44,986,955 45,481,329 48,309,629

Total Operating Expense $26,243,312 $25,249,706 $26,795,042

Income (Loss) From Operations 18,743,643 20,231,623 21,514,587

Less: Provision for Loan Losses (1,550,998) (1,052,866) (1,583,843)

Non-Operating Gain (Loss) (1,079) 65,844 (143)

Total Cost of Funds (7,824,074) (9,096,153) (10,052,353)

Adjusted Net Income (Loss) $9,367,490 $10,148,448 $9,878,248

AS OF DECEMBER 31, 2013 2013 2012 2011

2013 2012 2011

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CONSOLIDATION STATEMENTOF INCOME

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David W. WhittleChairman

Term Expires 2015

Curtis C. CollinsVice Chairman

Term Expires 2016

James H. RaganTreasurer

Term Expires 2016

Peggy A. ZahlerSecretary

Term Expires 2015

Deborah A. ConderDirector

Term Expires 2014

Harry GussDirector

Term Expires 2016

John J. ThielDirector

Term Expires 2014

Grady PerdueDirector

Term Expires 2015

Natalie SaizDirector

Term Expires 2014

Timothy DaggetBranch 1 Gemini

Shawn ChittumBranch 3 Ellington

Gregorio Jaramillo Branch 8 Park Place

Brett BurnsBranch 10 Pearland

Elizabeth OliverBranch 11 Seabrook

Glenn Perk Branch 13 Monument

Owen HiltonBranch 14 Deer Park

Kenneth WeberBranch 15 La Porte

Dion McInnisBranch 1 Gemini

Ann PaulissenBranch 2 League City

Gerald Stacy Branch 4 Friendswood

Dorethea Wynn Branch 5 Galveston

Leo Rudd Branch 6 Tuscan Lakes

William ReidBranch 7 Mainland

Louis DeckerBranch 9 Bay Colony

Fay HoggBranch 12 League City West

Nancy MalliniBranch 16 Clear Springs High SchoolBranch 17 Clear Falls High School

Teming Tse Jose OlivarezChairman

Joseph Pat McCormack

LEADERSHIPBOARD OF DIRECTORS

NORTHERN ADVISORY BOARD

SOUTHERN ADVISORY BOARD

SUPERVISORY COMMITTEE

LEADERSHIP· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

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· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · LEADERSHIP

JSC FCU MANAGEMENT

Michael G. BrownPresident & Chief Executive Officer

Paul MaslonkaChief Operations Officer

Debra ReederChief Financial Officer

Thomas HastChief Lending Officer & Vice President of Marketing

EXECUTIVE TEAM

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CLEAR LAKE/MAIN OFFICE1330 GeminiHouston, TX 77058

LEAGUE CITY BRANCH501 FM 270League City, TX 77573

ELLINGTON BRANCH404 FM 1959Houston, TX 77034

FRIENDSWOOD BRANCH1320 S. FriendswoodFriendswood, TX 77546

GALVESTON BRANCH2121 Market St.Galveston, TX 77550

TUSCAN LAKES BRANCH1280 East League City ParkwayLeague City, TX 77573

MAINLAND BRANCH2300 Gulf FreewayTexas City, TX 77591

PARK PLACE BRANCH8424 Park Place BlvdHouston, TX 77017

BAY COLONY BRANCH2461 FM 646 WDickinson, TX 77539

PEARLAND BRANCH9101 BroadwayPearland, TX 77584

SEABROOK BRANCH2900 NASA Parkway, Suite 310Seabrook, TX 77586

LEAGUE CITY WEST BRANCH2660 West Main StreetLeague City, TX 77573

MONUMENT BRANCH2200 East 13th StreetDeer Park, TX 77536

DEER PARK BRANCH120 East 8th StreetDeer Park, TX 77536

LA PORTE BRANCH607 West Fairmont ParkwayLa Porte, TX 77571

CLEAR SPRINGS HIGH SCHOOL BRANCH501 Palomino LaneLeague City, TX 77573Access restricted to CSHS students & staff

CLEAR FALLS HIGH SCHOOL BRANCH4380 Village WayLeague City, TX 77573Access restricted to CFHS students & staff

CLEAR LAKE CITY BLVD. BRANCH1600A Clear Lake City BlvdHouston, TX 77062

PEARLAND PARKWAY BRANCH1849 Pearland Parkway, Suite 103 Pearland, TX 77581

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1330 Gemini • Houston, Texas 77058P.O. Box 58346 • Houston, Texas 77258