FORWARD MOMENTUM 2015 ANNUAL REPORT

FORWARD MOMENTUM 2015 ANNUAL REPORT

altiercu.org 1,653,196 PAGE VIEWS 104,747 UNIQUE VISITORS 81,988 NEW VISITORS BY THE NUMBERS KASASA CHECKING PAID OUT $115,741 IN DIVIDENDS AND CASH REWARDS TO OUR MEMBERS 18,483 MOBILE DEPOSITS MADE VIA SMARTPHONES AND TABLETS FOR A TOTAL OF $7,661,690.03 43% SINCE 2014 $65M IN LOANS CLOSED RANKED THIRD AMONG THE TOP 10 CREDIT UNIONS IN ARIZONA* *According to Ranking Arizona: The Best of Arizona Business WHAT OUR MEMBERS THINK I enjoy the easy cash back without a ton of hoops to jump through. :) Kelly S.

MESSAGE FROM THE CEO In keeping with our value proposition for members, Altier Credit Union continues to be large in terms of innovation and technology, yet small enough to connect with our members from a service viewpoint. 2015 has been an active year in product enhancement for members of Altier Credit Union. In the first quarter of the year, we launched our EMV chip credit card, allowing members to be prepared for the new requirements of our credit card systems in the United States. The goal of the technology is to reduce point of sale fraud, but additional benefits will be evident for members who travel with their Altier card, especially internationally, where this technology is already widespread. MESSAGE FROM THE PRESIDENT The credit union s financial positions trended positively in 2015. Assets grew 2.87% during the year and net worth held at 8.0%, which is classified as well capitalized by regulatory standards. Your credit union s profitability also improved over the prior year-end, as we ended with a 0.24% return on average assets, which translates to $431,857 of net income. In 2015, we approved $65,287,476 in new loans, while maintaining a low level of loan delinquency and charge-offs in relation to our peers. Our Kasasa checking products continued to gain traction with the membership as well as the community, with 1,345 new accounts opened. Altier paid members an extraordinary sum of $115,741 in cash dividends and rewards and refunded $47,804 in ATM fees to Kasasa checking account holders. Altier is looking to the future and planning some exciting changes ahead. We continuously evaluate industry innovations designed to provide greater value to you. Our ongoing EMV chip card upgrade for both credit and debit cards will be completed over the next 12 months. In addition, we re enhancing the credit card program in order to provide more options to better fit the varying needs and interests of our members. For your convenience, we ve added Apple Pay to our credit and debit cards, making purchases quick and easy for members with an iphone. Furthermore, our new e-signature platform was rolled out, providing greater accessibility and ease at loan closings. Members no longer need to visit a branch during business hours but can instead sign and send in their loan documents online. In response to the demand for more rewards, we ve expanded Kasasa checking to include two new options. Kasasa Cash Back offers cash rewards based on card swipe activity rather than account balance, and Kasasa Tunes provides rewards in the form of credit for downloads and purchases made on itunes or Amazon. Finally, we ve redesigned our website to better meet the needs and interests of our members, regardless of the device they use to access the site. We look forward to providing our members with additional innovations and improved technologies in the years to come. Harry Mateer, CEO Over the next few years, we will continue to modernize our branch offices and integrate new technologies to improve efficiency and member experience. It s our vision that these changes will strengthen our relationship with both members and employees and that this, in turn, will strengthen the credit union. Our goal is to be your go to institution for all your financial needs. David Skilton, President & CFO Altier is looking to the future and planning some exciting changes ahead. LEADERSHIP AND GROWTH

CHAIRMAN S REPORT Serving on the board, our goal is to protect the safety and soundness of our members assets and to create opportunities for a healthier future for the credit union, our members and the communities in which we do business. Helping to make that possible was the team effort of management and staff. While economic value is important to all of us, member loyalty is one of the key indicators of the value we provide to our membership. Our commitment to delivering the highest level of service is stronger than ever, and we are extremely gratified that Altier was again voted among the top three credit unions in Arizona. This is a testament to our loyal membership, and we appreciate the vote of confidence. While 2015 was filled with notable achievements, it has also been a period of corporate transformations. Harry Mateer, who has guided the credit union as CEO for nearly 10 years, will be retiring from his position at the end of this year. Under his progressive leadership, Altier was positioned for growth in the midst of a very difficult economic period. As the CEO, he continued to build a strong relationship with both state and federal regulators, and his keen eye on compliance has ensured the safety and soundness of the credit union. Always a forward thinker, Harry led his team in seeking out new technologies to continually improve services to members. We thank Harry for his service! As part of the transition plan, David Skilton became Altier s new President this past June. David has been the Sr. Vice President & Chief Financial Officer for the credit union since 2008. David has a long list of accomplishments, one of which was the development and implementation of a net worth recovery strategy that helped Altier successfully navigate the hardships of the Great Recession and maintain sound financial footing and performance. We have the utmost confidence that he will continue to provide strong strategic direction and leadership in the future. I wish to thank our members for their continued participation and support. We encourage your input anytime. Such valuable feedback helps us drive our decisions in new product expansion, develop stronger training and service goals, measure overall member satisfaction and allow us to link our strategic goals with member expectations. No matter what stage in life you may be in, whether it s welcoming a first child, saving for college, buying that dream house or retiring, we want our members to trust Altier to be their financial advocate every step of the way. Kathy Danielson, Board Chairman WHAT OUR MEMBERS THINK Altier has always had great customer service and helped answer all my questions. :) BOARD OF DIRECTORS (from left to right) (back row) Kathy Danielson, Board Chairman; Joseph Nowaczyk, Director; Yvonne Reinink, Secretary; George Njock II, Director (front row) Rose Pfister, Vice Chairman; Brendan O Connor, Treasurer (not pictured) Casey Wamsley, Director Jeri K.

COMMUNITY PARTNERSHIPS $3,165 DONATED TO TCAA TO HELP ALLEVIATE POVERTY, HUNGER AND HOMELESSNESS THIRTY LOCAL UNDERPRIVILEGED KIDS RECEIVED HOLIDAY GIFTS & TOYS THROUGH THE SALVATION ARMY ANGEL TREE PROGRAM $2,065 RAISED FOR THE CHILDREN S MIRACLE NETWORK AND PHOENIX CHILDREN S HOSPITAL $600 COLLECTED TO COVER THE COSTS OF VACCINATIONS, FOOD, BEDDING AND TOYS FOR SHELTER PETS SEVENTY-ONE POUNDS OF FOOD DONATED TO LOCAL NONPROFIT FOOD BANKS $5,000 PROVIDED TO LOCAL HIGH SCHOOL FINANCIAL LITERACY CURRICULUMS OUR EFFORTS HELPED THE FOLLOWING ORGANIZATIONS: Camp Rainbow Children s Miracle Network HALO Animal Rescue Howard Memorial Rodeo Hospice of the Valley NCC Community Food Bank Page Food Pantry Page High School Phoenix Children s Hospital Salvation Army SRP PERA Clubs SRPGA, SRP AACC St. Johns High School Tempe Community Action Agency (TCAA) Tempe High School Williams Field High School DIRECTION AND INSPIRATION

FINANCIALS * 2.0 1.5 DLQ Ratio 2009-2015 STATEMENTS OF FINANCIAL CONDITION 2015 2014 ASSETS Cash and cash equivalents $12,448,970 $7,186,483 Available-for-sale 6,321,509 7,971,187 Other investments 25,661,339 21,313,233 Loans to members, net of allowance for loan losses 127,495,511 130,978,974 Premises and equipment, net 6,819,756 7,029,042 NCUSIF deposit 1,632,230 1,589,801 Other assets 2,508,800 1,714,869 Total Assets $182,888,115 $177,783,589 LIABILITIES Members share and savings accounts $166,618,042 $162,414,072 Other liabilities 1,888,178 2,194,421 Total Liabilities $168,506,220 $164,608,493 MEMBERS EQUITY Regular reserve $9,415,023 $9,415,023 Undivided earnings 5,111,173 4,679,316 Accumulated other comprehensive loss (144,301) (919,243) Total Members Equity $14,381,895 $13,175,096 Total Liabilities & Members Equity $182,888,115 $177,783,589 1.0 0.5 0.0 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1.0 2009 2010 2011 2012 2009 2010 2011 2012 2013 2014 DLQ Ratio 2013 2014 2015 Net Charge-Off Ratio 2009-2015 2015 STATEMENTS OF INCOME 2015 2014 INTEREST INCOME Interest on loans to members $5,680,107 $5,512,436 Interest on investment securities and cash equivalents 364,512 302,255 Total Interest Income $6,044,619 $5,814,691 INTEREST EXPENSE Dividends on members' share and savings accounts $240,382 $194,403 Interest expense on borrowings 20,937 55 Net Interest Income $5,783,300 $5,620,233 Provision (credit) for loan losses 596,791 206,360 Net Interest Income After Provision (Credit) for Loan Losses $5,186,509 $5,413,873 NON-INTEREST INCOME Total Non-interest Income $3,842,991 $3,437,960 NON-INTEREST EXPENSE Compensation and benefits $4,276,350 $4,393,171 Occupancy 464,327 593,428 Operations 3,856,966 3,605,300 Total Non-interest Expense $8,597,643 $8,591,899 NET INCOME $431,857 $259,934 Other comprehensive income (loss) 774,942 (118,497) Comprehensive Income $1,206,799 $141,437 *Comprehensive Audited Financial Statements 0.8 0.6 0.4 0.2 0.0-0.2-0.4-0.6 10 8 6 4 2 0 2009 2010 2011 2012 2013 2014 Net Worth/Total Assets Ratio 2009-2015 2009 2010 2011 2012 2013 2014 ROA ROA 2009-2015 2015 2015 *NCUA 5300 Data

TREASURER S REPORT Altier Credit Union remains financially solid and finished 2015 with a healthy balance sheet, a solid income statement, strong growth and earnings, and a remarkably low delinquency rate. The credit union maintains its well capitalized financial rating by state and federal regulators at 8.0%. With discerning lending practices and low loan rates, the credit union brought in more than $65 million in new loans, while achieving asset growth of more than $182 million. Such financial achievements and sound business decisions give Altier the capacity to deliver positive value to its members, regardless of their financial stage of life. Over 18,000 members enjoy a broad selection of products and services with the benefits of competitively low rates, personal service and a lasting financial partnership. Improving productivity and operating efficiencies will continue to be a primary focus. The Board of Directors appreciates the commitment and financial responsibility that the executive management and staff have exercised this year, and we are grateful for your membership. Your trust and investment in Altier Credit Union is truly what makes this such a successful partnership. Brendan O Connor, Treasurer Your trust and investment in Altier Credit Union is truly what makes this such a successful partnership. SUPERVISORY COMMITTEE REPORT The Altier Credit Union Supervisory Committee is a five-member independent standing committee required by state law and the Altier Credit Union (ACU) Bylaws. Specifically, the committee s responsibilities help assure the following: Effective internal controls are in place related to financial reporting and protection of assets Accounting records and reports are prepared accurately and on a timely basis Policies and procedures approved by the board are administered effectively Adequate and comprehensive policies and procedures are in place to safeguard against errors and fraud The committee s main focus is on the internal control system designed to help prevent errors and fraud. The internal and external auditing processes provide information about the health of the ACU internal control system and make recommendations for improvement. The committee tracks all recommendations made by the internal auditors, external auditors and examiners to help assure that identified problems and internal control weaknesses are corrected. Our internal auditor, CliftonLarsonAllen (CLA) performed audits of 21 different areas/functions in 2015. Another firm audited two additional areas/functions. Altier s contract with CLA expires at the end of 2016; the Supervisory Committee will be assessing performance of the internal audit work during the coming months. Moss Adams is currently completing their work on the 2015 annual financial audit for Altier. This work represents the second year of a three-year contract with Moss Adams. The committee performs its work to ensure that ACU s financial statements properly reflect the financial condition of the credit union and that your assets are properly protected. Randy Dietrich, Chairman, Supervisory Committee PERFORMANCE AND EXCELLENCE

WHAT OUR MEMBERS THINK Mesa Gateway Branch 6846 E. Warner Road Mesa, AZ 85212 Tempe Branch 1511 N. Project Drive Tempe, AZ 85281 Western Branch 221 N. 79th Avenue Tolleson, AZ 85353 MORE THAN 18,000 MEMBERS STRONG I like Altier for the cash back on all my purchases and the superb customer service. It is a refreshing change to call a company and have a real person answer and not have to press a ton of buttons and battle an automated system. I love my credit union. Linda A. Page Branch 449 Haul Road Page, AZ 86040 St. Johns Branch P.O. Box 2447 St. Johns, AZ 85936 altiercu.org 602.797.3000 888.999.3936 Federally Insured by NCUA Our mission is to provide exceptional value and the best possible service while delivering a full line of competitively priced savings, loans and other consumer financial services and resources.