MISSION STATEMENTCEFCU provides superior value with

unsurpassed service through selected

financial products while maintaining our

tradition of stability, security, and trust.

CORE VALUESMEMBERS FIRSTWe always place the best interests and

welfare of our members first.

FINANCIAL STRENGTH We never compromise the financial

strength and security of the organization.

ETHICSWe conduct all activities with honesty

and integrity.

IMPORTANCE OF PEOPLEWe promote the well-being of our

members, volunteers, and employees.

STRENGTH THROUGH FORESIGHTPerpetually, CEFCU has maintained an enviable, unwavering position of growth, strength, and stability.

As anticipated, 2015 was no exception. With assets rising to nearly $1.4 billion, we demonstrated gains in every

area of operation, including new members, loans, shares and net worth.

But last year went beyond just reaping the benefits of our unique business model of providing unsurpassed

value on selected services (doing only what we do best).

In 2015, we built a framework for the future — reinforcing our

infrastructure to assure our members of greater safety and

security for their money; and unsurpassed convenience with

next-generation technology.

On the most apparent level, we continued to invest in

technology to expedite our members’ interactions with us —

making all manner of transactions faster, easier, safer, more

customizable and more portable than ever. From mobile deposits

to online account opening and funding. . . from External Accounts

Funds Transfer to our Online Loan Application Center. . .we are

well positioned to meet the demands of the future.

Equally important, was the installation of a technology

platform with state-of-the-art security software and hardware to

protect our members from sophisticated cyber threats; and the

implementation of internal systems to maximize efficiency and

thereby keep our operating costs down. To this end, we also

purchased new facilities to handle our growing volume of real

estate loans. By expanding our ability to process our real estate

loans in-house, we are ensuring that these products continue to

give borrowers a cost advantage, while providing higher dividends

to our members.

It is this kind of pro-active planning that continually keeps

CEFCU ahead. . .delivering unsurpassed value today, while ensuring

tomorrow’s advantage.

STRENGTH THROUGH FORESIGHT

BOARD OF DIRECTORS(Sitting L to R):Treasurer RICH HARRIS, CEO/President, CEFCU;Chair DLORAH GONZALES, Retired, Director ofEmployment and Employee Services, Caltech; ANN MARTIN, Associate General Counsel, Caltech;

(Standing L to R):Vice Chairman JOHN PATTERSON, Senior Finance Analyst for the County of Los Angeles, Treasurer& Tax Collector; Secretary MIKE MIRANDA, Division Administratorfor Biology & Biological Engineering, Caltech; WILLIS CHAPMAN, Logistics & Technical Information Division Manager, JPL; STEVE PROIA, CFO/Director for Business Operations, JPL; GARY GRAY, Leased Facilities Administrator, JPL;RICHARD O’TOOLE, Executive Manager, Office of Legislative Affairs, JPL.

CHAIR & PRESIDENT’S REPORTCHAIR & PRESIDENT’S REPORT It is our pleasure once again to report that2015 was another solid, safe and successful yearfor our Credit Union — as well as a formative yearfor strengthening our operational infrastructure. Assets rose to $1,397,949,329 — an increase of3.89% for the year. Loans soared to almost $356million, an increase of 10.66%. Shares grew tonearly $1.25 billion, rising 3.64%. And our NetWorth climbed to more than $139 million, a gainof 7.88% over the previous year. But we all know that size alone is not a fail-proof indicator of strength. Strength requiressustainability. And sustainability requires foresight.This is where CEFCU continues to excel. In 2015, we reinforced our infrastructurewith a new generation of technology, designed tomaximize opportunities and minimize risks for ourmembers, both now and in the future. To this end,we enhanced and expanded such services asCEFCU Mobile. . .eBranch. . .online account openingand funding. . .online loan application. . .External Accounts Funds Transfer. . .and Quicken Direct Connect. While these service upgrades make transactions faster and easier for our members, many of the year’s mostimportant improvements remain “invisible.” These include the implementation of cutting-edge security softwareand hardware. CEFCU is now better equipped to discover and block cyber security threats — preventing databreaches and protecting our members’ investments and personal information. Two new lending platforms were introduced in 2015. One is utilized by staff for underwriting, processing and funding loans. The second serves as an online lending platform for web-based member loan applications. We also changed our credit card program from VISA® to MasterCard® in order to provide our members withthe latest EMV chip technology — improving the security as well as global usability of our card. CEFCU’s new Platinum MasterCard preserves our low rates and fees while offering some exciting new features as well, such asprice protection, extended warranty, Identity Theft Resolution Services, and zero liability.

PLANNING FOR LONG-TERM GROWTHReal Estate lending was again our leading loan product in 2015,

generating nearly $57.3 million in new loans. Our ability to processthese loans in-house — both funding and servicing them — gave us

a significant, cost-saving advantage over other financial institutions. As always, the savings were passed on to our members. Our

operational efficiency allowed us to cut points on conformingmortgages, thereby reducing closing costs. At the same time,

it preserved more of the income generated by these loansto provide superior dividends.

Not surprisingly, the growing volume of work involved in our real estate lending made it necessary

to expand our Real Estate Loan Center. So, in November, 2015, the Credit Union purchased new

DLORAH GONZALES, Chair, Board of Directors (right), and RICHARD HARRIS, President/Treasurer.

REAL ESTATE LOANS

(Year end, in millions of dollars)

facilities at 801 Foothill Blvd., La Cañada Flintridge, with plans to relocate specific operations there. With more space,our Real Estate Loan Center can continue to expand and generate revenue to pay top dividends.

In addition, all our real estate loan documents now utilize easier-to-understand terms, and easier-to-use mortgage disclosure forms mandated by new Consumer Financial Protection Bureau regulations.

PERPETUATING THE CEFCU ADVANTAGEOur commitment to providing exceptional value — both in savings and borrowing — was again obvious in 2015.

In December, the Board established a new share dividend tier for deposits of $250,000.01 and above to take effectin January, 2016. The new tier structure allows us to pay competitive dividends on all four tier levels. And whilemany financial institutions lowered dividend rates last year, CEFCU’s rates stayed steady and reliable with an increasein December. . .ultimately paying members more than $10.5 million.

On the lending side, our Auto Loan rates remained at all-time lows, generating $17.8 million in new and pre-ownedvehicle loans. Our Home Equity Line of Credit products were also extremely popular. Featuring low rates and nofees to open or maintain, they attracted more than $8 million of new credit. In addition, we funded nearly $3.5 millionin Debt Consolidation promotional loans at a discounted rate of 6.49% APR. CEFCU also thanked its MasterCard holders with a special promotion, featuring a reduced rate of 4.75% APR on all purchases and balance transfersposted between November 15, 2015 and April 15, 2016.By year end, more than 460 members were approvedfor a new MasterCard to take advantage of this offer. In every loan category, all borrowers were affordedthe same low rate regardless of their credit score — a policy that reflects our high esteem for our member-ship. Better still, this esteem appears to be mutual. In 2015, our members gave us a 98.8% satisfaction rating in our Annual Survey. More members than ever took advantage of ourelectronic services in 2015, too. Usage of eBranchcontinued to climb, as did mobile deposits and payrolldeductions. One of the most used features was External Accounts Funds Transfer, moving some $97.1million between CEFCU and other financial institutions.

Better still, we were happy to welcome 1,454 new members in 2015; and all of this growth wasachieved within our exclusive Caltech Community. . .without resorting to mergers, adding new employergroups, or changing our charter to serve city orcounty employees. Our unique strategy of selective services — providing added value without trying to be allthings to all people — once again proved the wisdom of this choice.

So, as we enter 2016, we have every reason to look forward to sharing another successful year with our members as we have carefully laid the groundwork for continued strength and stability for years to come.

ASSETS, SHARES & LOANS(Year end, in millions of dollars)

FINANCIAL CONDITIONDecember 31, 2015 2014

ASSETSLoans, net of allowance for loan losses $ 352,748,742 $ 318,260,277Cash on hand and demand accounts 39,115,276 35,811,540Investments, net 986,686,248 975,922,003Accrued income 3,408,738 3,195,673Fixed assets, net 10,150,150 6,239,776Other assets 5,840,175 6,115,623

$ 1,397,949,329 $ 1,345,544,892

LIABILITIES AND MEMBERS' EQUITYAccounts payable and accrued expenses $ 4,910,134 $ 5,649,875Members’ shares 1,245,881,696 1,202,104,543Capital, net 147,157,499 137,790,474

$ 1,397,949,329 $ 1,345,544,892

INCOME AND EXPENSE

For the years ended December 31, 2015 2014

INTEREST INCOMEInterest on loans $ 13,623,590 $ 12,731,841Interest on investments 18,695,103 17,601,611

$ 32,318,693 $ 30,333,452COST OF FUNDSInterest on borrowed funds 504,481 125,349Members’ dividends 10,514,123 10,414,819

Net interest income $ 21,300,089 $ 19,793,284

Provision for loan loss expense $ –0– $ –0–

Other operating income $ 1,475,512 $ 1,259,777Other non-operating income (expense) 364,782 183,341

$ 23,140,383 $ 21,236,402

OPERATING EXPENSESCompensation $ 5,180,386 $ 4,907,646Employee benefits 2,777,797 2,240,901Education and conference 355,204 294,601Association dues 121,438 115,819Office occupancy 465,305 446,459Office operations 1,822,705 1,810,628Marketing and promotion 364,301 351,632Loan servicing 814,860 710,661Professional and outside services 817,435 950,928NCUA operating fee 229,411 220,693Miscellaneous 4,733 12,229

$ 12,953,575 $ 12,062,197

NET INCOME $ 10,186,808 $ 9,174,205

The 2015 Statements above are unaudited. An independent, certified opinion audit is currently in process.

STATEMENTSSTATEMENTS

The Supervisory Committee is an audit committee composed of three Credit Union memberswho are appointed by the Board of Directors. Ourprimary responsibility is to ensure that memberfunds and interests are protected.

In pursuit of this goal, the Supervisory Committee’s activities include: participation in themonthly Board of Directors’ meetings; bi-monthlymeetings of the Supervisory Committee to review financial performance and overall financial health ofthe Credit Union; and periodic audits of accounts,policies, procedures and internal controls.

To assist in our review of the Credit Union andin accordance with regulatory requirements, theSupervisory Committee engaged the independentaccounting firm of Richards & Associates, CPA’s, to

perform the annual certified audits. An Opinion audit was completed in 2015 for the year of 2014. The 2015 auditis currently in process. The Committee has also engaged the accounting firm of Turner, Warren, Hwang & Conrad, CPA’s, toprovide the Internal Audit function on a regular ongoing basis. In addition to these reviews, the National Credit Union Administration (NCUA) performs a regulatory examinationevery 12 months. The results of all reviews to date give us confidence that the Credit Union is in compliance with applicableregulations, safeguarding members’ assets, and following policies and procedures approved by the Credit Union Board of Directors.

SUPERVISORY COMMITTEE (L to R):THERESA SLOWSKEI; LAURICE BALIAN, Chair; WALTER BOYD.

SUPERVISORY COMMITTEE REPORTSUPERVISORY COMMITTEE REPORT

ATM LOCATIONSLa Cañada OfficeCaltech Campus (2 Locations) Winnett Center Keith Spalding BuildingThe Huntington Library & Botanical GardensJPL (2 Locations) Building 303 Building 291

WEBSITEwww.cefcu.org

JPL OFFICE4800 Oak Grove DriveBuilding 291Pasadena, CA 91109818/354-3280

LA CAÑADA OFFICE528 Foothill BoulevardP.O. Box 11001La Cañada Flintridge, CA 91012-6001800/592-3328 • 818/952-4444FAX 818/952-4382

CAMPUS OFFICE1200 East California BoulevardPasadena, CA 91125CIT 100-63626/395-6300

NET WORTH(Year end, in millions of dollars)

Net Worth excludes unrealized gains/losses on investment securities.

NNCCUUAAYour savings federally insured to at least $250,000

and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government AgencyLENDEREQUAL OPPORTUNITY