Summarized balance sheetDecember 31 2010 2009AssetsCash resources $ 38,841,547 $ 37,565,943Loans 153,868,401 152,709,694Investments and other 15,072,156 15,138,838Derivative instruments 161,402 35,396Property and equipment 2,473,200 2,610,397 $ 210,416,706 $ 208,060,268

LiabilitiesDeposits $ 197,938,407 $ 197,109,786Payables and accruals 2,379,025 2,069,215 200,317,432 199,179,001 Members’ equityRetained earnings 10,029,157 8,883,271Accumulated other comprehensive income (loss) 70,117 (2,004) 10,099,274 8,881,267 $ 210,416,706 $ 208,060,268

Summarized statements of earnings and retained earnings Year ended December 31 2010 2009Financial income $ 9,744,160 $ 9,728,841Financial expense (3,201,300) (4,298,983)Share dividends (14,628) (13,786)Financial margin 6,528,232 5,416,072(Provision for) recovery of credit losses (18,301) 160,817Other income 1,357,652 1,253,853Operating margin 7,867,583 6,830,742Operating expenses (5,539,874) (5,419,680)Patronage dividends (992,065) (649,897)Earnings before income taxes 1,335,644 761,165Income taxes (189,758) (116,754)Net earnings $ 1,145,886 644,411

Retained earnings, beginning of year $ 8,883,271 $ 8,238,860Net earnings 1,145,886 $ 644,411Retained earnings, end of year $ 10,029,157 $ 8,883,271

Summarized statement of comprehensive income and accumulated other comprehensive incomeYear ended December 31 2010 2009Net earnings $ 1,145,886 $ 644,411Other comprehensive income (loss), net of tax Unrealized income (loss) on derivatives 72,121 (2,004)Comprehensive income $ 1,218,007 $ 642,407

Accumulated other comprehensive income (loss) Balance, beginning of year $ (2,004) $ - Other comprehensive income (loss) 72,121 (2,004)Balance, end of year $ 70,117 $ (2,004)

Summarized statement of cash flows Year ended December 31 2010 2009Cash flows provided by (used in) Operating activities $ 1,711,308 $ 674,075 Financing activities 1,047,078 8,925,937 Investing activities (1,482,782) (6,664,867) Net increase in cash resources 1,275,604 2,935,145Cash resources, beginning of year 37,565,943 34,630,798Cash resources, end of year $ 38,841,547 $ 37,565,943

A full set of financial statements is available from the Credit Union.

On behalf of the Board

Michael Strukoff, Director Theresa Dergousoff, Director

To the members ofGrand Forks District Savings Credit Union

The accompanying summary financial statements, which comprise the summary balance sheet as at December 31, 2010, the summary statements of earnings and retained earnings, comprehensive income and accumulated other comprehensive income and cash flows for the year then ended, and related notes, are derived from the audited financial statements of Grand Forks District Savings Credit Union for the year ended December 31, 2010. We expressed an unmodified audit opinion on those financial statements in our report dated February 17, 2010.

The summary financial statements do not contain all the disclosures required by Canadian generally accepted accounting principles. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Grand Forks District Savings Credit Union.

Management’s responsibility for the summary financial statementsManagement is responsible for the preparation of a summary of the audited financial statements in accordance with Article 128 of the Financial Institutions Act of B.C.

Auditors’ responsibilityOur responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with Canadian Auditing Standard (CAS) 810, “Engagements to Report on Summary Financial Statements.”

OpinionIn our opinion, the summary financial statements derived from the audited financial statements of Grand Forks District Savings Credit Union for the year ended December 31, 2010 are a fair summary of those financial statements, in accordance with Article 128 of the Financial Institutions Act of B.C.

Independent Auditors’ report on the summary financial statements

Chartered accountantsKelowna, BCFebruary 17, 2011

Box 2500, 447 Market AvenueGrand Forks BC V0H 1H0

Tel: 250-442-5511 Fax: 250-442-5644www.gfdscu.com

® Registered trademarks, used under licenseStaff and Board photos by LAURA WILBy PHoToGRAPHy

Design by Empire New Media

Bottom left to right

Chrissy Peterson, Tracey Lloyd, Jacquie Kopan, Kelly Thomas, Dan Currie, Melodie Davidoff, Diane Davey, Kathleen Rezansoff

Next row up

Shauna Lum, Cheryl Fofonoff, Heather Tresnich, Angela Hanlon

Next row

Sheri Wlasoff, Angela Fraser, Tina Flanagan, Kathy Kalesnikoff

Next row

Sherry Stewart, Jan Subotin, Sandy Shiloff, Lee Day

top row

Angela Soukoreff, Tricia Ronmark, Debbie Fofonoff, Lisa Anderson, Les orme, Valerie Kelly, Doug McGillivray, Terry Woodruff, Debbie Mark, Marion Duralia

missiNg:

Connie Hajdasz, Dale Lachapelle, Jenna Brewer, Julie Hallstrom, Krista Soobotin, Lil Popoff, Lisa Clemens, Melanie Haffner, Nicole Hulbert, Paula Wolkosky, Samantha Vaugeois, Samantha Subotin, Lil Voykin, Jalene Padmoroff, Sally Sofonoff, NicoleTourcotte, Stephanie Koorbatoff

InNOVAtion Award

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our 2010staff

In 2010, GFCU was chosen to receive the Central 1 InNOVAtion Award for the creation of a Form Generation Wizard designed in house using existing technology. Basically, it means when you do business with us, forms will ‘automatically populate’ with your information – saving time for you and our staff! Members sign on a digital pad and everything is stored electronically saving trees and money. This innovation is part of a sophisticated Enterprise Content Management system that our very own local staff created. While members see only a portion of our technology advancements, our organization is doing its best to ensure we remain a secure, efficient, and cost-effective Credit Union.

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2010Annual report

Regional Chamber plans to be operational in 2011 for the purposes of providing membership services and benefits to our business community, increasing visibility and tourism to our area, and more. As a community Credit Union, we know the success of our businesses and commercial ventures keeps our area strong and vibrant.

$30,000 was provided to create a permanent Heritage Exhibit at the Grand Forks & District Arts & Heritage Centre. We are very proud of our heritage and the role the Credit Union has played in that history. We believe the story of the Boundary is one rich in spirit, determination, resilience and cooperation. We also believe this story will be of

interest to visitors and will encourage them to stay longer and experience more of what the Boundary has to offer.

We often talk about the “difference” between our Credit Union and other financial service providers. We make the decisions right here – not in some office in some far away location that may have never even heard about the Boundary or the challenges we face.

We support as many Boundary area initiatives, events, sports teams etc. as we can manage financially. We also provide assistance in kind through staff volunteering, the use of our facility and equipment, and by offering our voice at community tables. We have talented and committed employees who, generation after generation, continue our tradition of providing you with a wide range of competitive financial products and services.

Although we often speak in terms of what the Credit Union has achieved, it is the members we must acknowledge; those citizens and businesses of the Boundary that make all of this possible. you have a lot to be proud of.

To all our members, thank you for choosing the Credit Union. It has been a privilege and a pleasure to serve you.

Strength Retained Earnings = $10 million Capital Adequacy = 16% (almost twice the 8% we require)Liquidity = 26% (we need a minimum of 8%)

Michael Strukoff, Chair Kelly Thomas, CEO

2010 Board of Directors & Chief executive officer

Charitable• Community Christmas Hamper Program

• Boundary Community Food Bank

• Christina Lake Community Christmas Dinner

• Grand Forks Community Christmas Dinner

• Boundary Family & Individual Services Society

• Canadian Red Cross – Medical Equipment Loan Service

• Whispers of Hope

• Habitat for Humanity

• Rotary / Phoenix Foundation Golf Tournament

• Royal Canadian Legion – Remembrance Day

Recreation / Sports • Grand Forks BMX Society

• Grand Forks Archery Club

• Boundary youth Soccer Assn

• Phoenix Mountain Racers

• Grand Forks Wildlife Assn

• Kettle River Bikers’ Assn

• Kettle Valley Express Bantam Rep Hockey

• Grand Forks International Baseball Tournament – Gold Sponsor

• Boundary Baseball

• Greenwood Demolition Derby

• Boundary Girls’ Fastpitch

• Grand Forks Border Bruins

Education• School District 51 – Solar BC Grant

Partnership

• Grand Forks & District Public Library – Books For Babies, Summer Reading Club, Adopt-A-Magazine

• Christina Lake Stewardship Society

• Perley Playground

2010 Boundary Area Contributions

Business• Boundary Country Regional Chamber

of Commerce -- $30,000 Start Up Funding

Youth/ Children• yES Credit Union Camp – Leadership

& Citizenship

• Success By 6 Lead Partner

Scholarships & Bursaries• Selkirk College Bursary – Lisa McPhee

• Grand Forks Credit Union Endowment with Phoenix Foundation – Brandon Kootnekoff

• BCSS – Craig Kitchen & Jordan Smith

• GFSS – Kimberley Lacey, Jordan Andrews, Satya Scott, Jair Gobbett, Samuel Brockmeyer, Kaitlin Scown, Haley Sofonoff

Health• Grand Forks & Boundary Regional

Agricultural Society

• F.A.I.R. Dental Access Fund

• Boundary Women’s Coalition

• Relay For Life

Arts & Culture• Grand Forks & District Arts

& Heritage Centre – $30,000 Permanent Heritage Exhibit

• Grand Forks Art Gallery

– Art Rental Program

• Grand Forks Fall Fair

T h e S p i r i t o f C o o p e r a t i o n

Board (left to right) Peter Perepelkin, Jennifer Wetmore, Roland Russell, Kelly Thomas (CEO), Michael Strukoff (Chair), Theresa Dergousoff, Suzanne Schroeder, Bill Strookoff, Ken McKinnon. Missing is Pat Horkoff.

More than$100,000

2010 was a noteworthy year for our Credit Union. In spite of the difficult economic challenges we are experiencing in the Boundary, GFCU managed to share more than $1 million in dividends with our members and we set aside over $1 million in our capital account.

Earnings in 2010 are extraordinary at over $2.3 million before taxes and dividends.In 2009, interest rates decreased significantly resulting in lower deposit rates in 2010. With lower than historic deposit costs, our financial margin increased considerably, well beyond what it has been historically. Although difficult to predict, as we move through 2011, we expect deposit rates to increase which will lead to a financial margin more in keeping with historic levels.

our employees work closely with those members who are experiencing changes in their financial circumstances that prevent them from meeting their obligations in a timely manner. Solutions designed to fit a member’s specific needs serves not only the member, but also helps to ensure our loan delinquency remains at levels far less than the Provincial Credit Union average. our practical, hands on approach to our members’ needs is another reason why people choose to do their business with us.

The dividend announcement of $1 million, approximately 40% higher than any other year’s distribution, was a historic achievement for our Credit Union. Since 1990, GFCU has returned more than $9 million to members as part of our profit sharing philosophy. This cooperative approach means the more business a member does with us the greater the returns.

$30,000 was provided to Community Futures Boundary as start up funds for the creation of the Boundary Country Regional Chamber of Commerce. The