2015 Annual Report

Chairman’s ReportThe year 2015 was a year of growth for the U.S. as well as for Prince George’s Community Federal Credit Union. The U.S. continued its recovery from the recession—a recovery that was quicker than almost every other country, especially considering that it was the worst recession since the Great Depression.

Prince George’s Community Federal Credit Union experienced growth as well which was no coincidence because throughout 2015, we focused on building our value, to which members responded positively. We continued to grow in numbers and in strength by maintaining the credit union promise: to devote our energy to helping you achieve financial success.

In 2015, we:• Added products and services to our lineup to help you with

your day-to-day finances, as well as your long-term goals.• Focused significant energy on educating members by offering

more seminars—home buying seminars, financial management seminars, and monthly business events centered on relevant business topics and networking. It is part of our ongoing commitment to help prepare you for the financial issues you’re sure to face throughout your personal and professional life.• Implemented a Mystery Shopper program whereby members

evaluate our service so that we can be consistent at every stage of member interaction.

Not only are we committed to your success, we are committed to our communities, and to giving back, as any good community citizen would. Our community involvement is more extensive than in any time in our history, and it flows from the credit union philosophy of “people helping people.”

For example:• Scholarship 2015 – We saluted the commitment and energy

of Prince George’s Community Federal Credit Union’s Virginia Stallings and Cindy Prestandrea by again awarding a $1,000 scholarship in each of their names.• Community Day – In June of 2015, 300 people attended

this ever-growing in-branch event that celebrates you, our members.• Community Outreach – We engaged in the communities we

serve by sponsoring various events to help improve quality of life here. By giving back, we also help spread the word about the value of membership.

While 2015 was a year of mostly good news, it was not without loss, as we mourned the passing of former Prince George’s Community Federal Credit Union Board Director and Founder, Virginia Stallings on July 7 and recently former Board Director J. Kay Marcos on February 19, 2016.

In 1967, Mrs. Stallings and four other county employees started what was then Prince George’s County Maryland Government Employees Federal Credit Union with a mission that remains in effect today: to help the underserved of the community. During

her tenure, the credit union grew to 15,000 members, $150 million in assets, and became a full-service financial institution serving all of Prince George’s County. “I always have to look out for the little guy,” she would say, as she was committed to helping those with modest means attain the financial tools to improve their lives.

Virginia Stallings served on our Board of Directors in several executive positions, including Emeritus Director. Ms. Marcos served on the Board of Directors from 1995 to 2009 in many facets including Secretary of the Board of Directors.

Both remained devoted advocates for the credit union until their passing. We are all better people—and a better organization—for having known these profound women.

Next year, 2017, we will celebrate our 50th anniversary as a strong financial institution with an excellent forecast for growth. During the coming Golden Anniversary, we will reaffirm our commitment to member service, to increasing your financial awareness, and to giving back to the communities we serve.

Our 50-year success is directly attributable to our staff and the managers who serve our members so well, to the various committees that monitor our activities, to the Board of Directors that establishes our direction, and especially to you, our members, who support our efforts and contribute to the steady growth we all need for success.

Respectfully,

Darryl A. Jones Sr.Chairman, Board of Directors

1 Prince George’s Community Federal Credit Union: 2015 Annual Report

CEO’s ReportTo be successful, every chalIenge requires a plan. Our commitment to nurturing an ECO culture (Engaging, Committing, and Over-Delivering) allows us to successfully meet the challenge of fulfilling the short- and long-term wants and needs of our members. Because, after all, that is the only reason Prince George’s Community Federal Credit Union exists.

Our ECO culture has directly contributed to an expanded menu of products crucial to members’ financial success:• Visa® Credit Cards –The Elite Visa Rewards for the member who

wants to earn rewards, and Visa Platinum for the member who wants a low annual percentage rate. Both are fixed-rate cards with no annual fee and other valuable benefits. Also, both have the new EMV chip, making transactions significantly less vulnerable to fraud.• Enhanced Mobile App with Remote Deposit Capture – A major

convenience for members that allows you to scan checks and transmit the scanned images to be deposited into your account.• Pay Day Alternative Loans – Offer funds to help the needs of

members in between pay periods.

Last year was a period of growth, with loans growing 1.78%, even during a time when some other financial institutions’ loan growth was flat. That loan growth likely correlates with a slight increase in 2015 membership growth, as your friends, family, and neighbors discovered the value and life-long benefits of Prince George’s Community Federal Credit Union’s membership.

We devoted considerable energy in 2015 to examining our internal processes with the goal of improving operational efficiencies. By working smarter and more efficiently, and by automating workflow wherever possible, we saw excellent opportunities to improve performance. Automating workflow and business processes will have an immediate and positive impact on the bottom line and, ultimately, the quality of the products and services we can offer you.

While credit unions have been historically known for helping individuals and families achieve financial success, in 2015, Prince

George’s Community Federal Credit Union was formally recognized as a friend of the business community, too, proving that we are committed to make our community stronger.

We were a finalist for The Money Manager Awards program that honors financial industry leaders for selflessly helping their clients navigate and manage the complex financial landscape of their lives and businesses. We also were recognized by the Prince George’s County Diversity Agency with the 2015 Supplier Diversity Appreciation Award. Three hundred sixty-five days of the year we are giving back to help increase the success of our Members and the business community we serve.

Community involvement has always been a defining part of our core mission of “people helping people.” Note that it’s not just “members helping members,” but people helping people. We support the communities where we live and work through active partnerships, contributions, and volunteerism. For example:• Community Day – In June 2015, family-friendly open house was

attended by more than 300 people who wanted to learn more about our services. It featured games, food, and fun and provided shredding services for those wanting to properly destroy private information and documents.• Prison Financial Education – We conducted financial education

seminars on budgeting, because financial literacy is one of the most important skills inmates can learn to help achieve a successful transition to a normal life.• Financial Wellness for Women Series – In conjunction with

National Breast Cancer Awareness Month (October), we conducted seminars to help improve and maintain financial growth for women. With the help of community partners, we also provided the community and our members information on breast cancer prevention.• National Night Out – We participated in National Night Out, an

annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live.• Toys for Tots – We were active in the U. S. Marine Corps Reserve

Toys for Tots Program, collecting new, unwrapped toys during the holiday season, and distributing them to less fortunate children in our community.

While 2015 was a year of growth and success for Prince George’s Community Federal, it’s important to acknowledge that when any organization succeeds, it’s usually attributable to an efficient, hard-working staff, a committed management team, and a wise and devoted Board of Directors. We thank them, and we especially thank you—our members—who continue to support us, and turn to us first when you need a safe and secure financial partner.

Respectfully,

Robert SchroederChief Executive Officer

Prince George’s Community Federal Credit Union: 2015 Annual Report 2

Treasurer’s Report

Supervisory Committee Report

As the Treasurer of the Prince George’s Community Federal Credit Union, it is my duty to report on its financial condition for the 2015 calendar year. I am happy to tell you that the credit union has enjoyed another successful year as we continue to grow. Our assets, shares and loans have all increased reflecting your faith and confidence in the credit union and our strong management team.

More specifically:• Our assets rose to $155 million in 2015. This represents a 9.2%

increase over 2014.• Our shares increased by 9.4% over the previous year to

$139 million.• Our reserves and members’ equity now stand at $15.3

million. This translates into a net worth of 9.86% and reflects the financial strength of the credit union. Our strong capital position gives the credit union the opportunity to better serve its members by offering new services.• We paid $554,031 in dividends to our members and offered

very competitive rates on our various savings instruments. To better meet the needs of our depositors’ we also increased the variety of saving options.• Our loan portfolio increased by 1.78% and we now have a

total of $106 million in outstanding member loans. The largest parts of the portfolio are: used auto loans at $25 million, home equity loans and HELOC (Home Equity Line of Credit) at $20 million, and mortgage loans at $21 million. Business loans for 2015 stood at $10.3 million and continue to contribute to our strong and diverse portfolio. We are currently loaning out 77% of our deposits.

Due to our strong financial position, the credit union is able to enhance member services. One example is the introduction in late 2015 of a new mobile application. This new on-line service gives members the ability to deposit checks, pay bills and consolidate accounts. We believe that this new smart phone app will make it more convenient for our members to do their credit union banking. We have also just initiated a new credit card for our members.

I would like to thank our members for their continued trust in our organization. We appreciate your business and look forward to partnering with you to help achieve your financial goals. Also, I want to thank the staff and management for their dedication and hardwork.

Looking forward, we will continue to provide you with the very best products and services available in the financial industry. For a more complete report of the past year’s results, I urge you to refer to the Condensed Financial Statement that appears on page 4.

Respectfully,

Steven KaplanTreasurer

The Supervisory Committee consists of four volunteer members of the credit union appointed by the Board of Directors. The committee’s primary responsibility is to safeguard members assets by overseeing the financial internal controls and policies related to credit union operations. The primary duties of the Supervisory Committee is to ensure that the credit union is operated in a safe and sound manner in accordance with our bylaws, charter, policies, procedures, and federal and state regulations; the Supervisory Committee oversees internal and external audits, and ensures that the credit union complies with audit recommendations.

The Supervisory Committee retained the certified public accounting firm of CliftonLarsonAllen LLP to conduct a comprehensive annual audit. A condensed audited financial statement is included in this Annual Report. A complete set of audited financial statements is available upon written request. An examination was also performed by the National Credit Union Administration.

Prince George’s Community Federal Credit Union had a successful year in 2015. We are financially strong and continue to operate in a safe and sound manner while complying with all applicable rules and regulations outlined by NCUA.

The Supervisory Committee would like to thank the Board of Directors and the credit union staff for their dedication and hard work in managing a great financial organization.

Respectfully,

Milt CrumpChairman, Supervisory Committee

Supervisory Committee MembersAlan RichmanFrancis DiSalvoMichael Hatton

Prince George’s Community Federal Credit Union: 2015 Annual Report 3

Consolidated Statementof Financial ConditionAs of December 31, 2015

Statementof IncomeFor the Year Ending December 31, 2015

ASSETS

Cash and Cash Equivalents $ 16,379,520

Deposits in Other Financial Institutions 2,000,000

Securities – Available-for-Sale 250,720

Securities – Held-to-Maturity 11,247,698

Other Investments 902,797

Loans, Net 106,648,932

Accrued Interest Receivable 344,479

Foreclosed Assets 879,509

Premises and Equipment, Net 9,375,937

NCUSIF Deposit 1,309,820

Other Assets 6,135,825

Total Assets $ 155,475,237

LIABILITIES AND MEMBERS’ EQUITY

LIABILITIES:

Members’ Share and Savings Accounts $ 139,035,806

Accrued Expenses and Other Liabilities 1,103,244

Total Liabilities 140,139,050

MEMBERS’ EQUITY:

Regular Reserve 1,423,229

Undivided Earnings 13,912,238

Accumulated Other ComprehensiveIncome (Loss) 720

Total Members’ Equity 15,336,187

Total Liabilities and Members’ Equity $ 155,475,237

INTEREST INCOME

Loans $ 5,690,718

Securities and Interest Bearing Deposits 157,179

Total Interest Income 5,847,897

INTEREST EXPENSE

Members’ Share and Savings Accounts 554,119

Net Interest Income 5,293,778

PROVISION FOR LOAN LOSSES 320,556

Net Interest Income After Provision forLoan Losses 4,973,222

NON-INTEREST INCOME

Service Charges and Fees 2,858,114

Other Non-Interest Income 216,553

Net Loss on Disposition of Assets (162,452)

Total Non-Interest Income 2,912,215

NON-INTEREST EXPENSE

Employee Compensation and Benefits 2,949,728

Office Occupancy and Operations 2,668,107

Other Operating Expenses 1,210,193

Total Non-Interest Expense 6,828,028

NET INCOME $ 1,057,409

Prince George’s Community Federal Credit Union: 2015 Annual Report 4

These condensed audited financial statements do not constitute a complete presentation. The complete set of audited financial statements including the statement of cash flows and changes in members’ equity, and notes to the financial statements are available at the Credit Union office during normal hours of operation.

Federally insured by NCUA

Largo Branch9201 Basil CourtLargo, MD 20774

Beltsville Branch6985 Muirkirk Meadows Drive

Beltsville, MD 20705

Bowie Branch15201 Hall Road

Bowie‚ MD 20721

Upper Marlboro BranchCounty Administration Building

14741 Governor Oden Bowie Drive, RM-L210Upper Marlboro, MD 20772

301.627.2666 • 800.952.7428www.PrinceGeorgesCFCU.org