ANNUAL REPORT TO MEMBERS FOR THE YEAR

2013

Celebrating 60 years of service to our Members 1954 - 2014

Federally Insured by NCUA

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As we look back on a successful 2013 at Leominster Credit Union, we are also celebrating our 60th anniversary, including six decades of fi nancial growth, community support and banking with a purpose.

LCU was founded in 1954 when, faced with a lack of lending opportunities, a group of small business owners created an institution that would provide small loans at reasonable interest rates. As it turns out, these founders were onto something, as LCU has developed into a full-service credit union with more than 50,000 members.

They had the foresight to lay the foundation for what has become one of the largest credit unions in Massachusetts,” says Nancy Graves, who began as a teller in 1966 and today is an LCU Board Member. “LCU has been a great part of my life. I have seen it grow from two employees to over 100 employees today.”

Along the way, LCU has successfully adapted to a changing world.

“When the founders established LCU in 1954, I would fi nd it hard to believe they imagined it lasting for so long,” says LCU Chairman of the Board Anthony A. Gasbarro. “But their passion and the passion of subsequent board members, employees and members has ensured LCU’s strength and longevity.”

Board Member Giulio Greco adds, “We’ve shown the ability to change with the times, to represent the community no matter what its needs are and to adapt to changing technologies and lending environments.”

Since its start in the back room of a local print shop, LCU has expanded to nine branch locations in Leominster and surrounding communities. Recently, the credit union constructed a new executive offi ce building at 18 Adams Street in Leominster.

Construction of the executive offi ce building showed leadership for the 21st century,” notes Board Member Michael Sauvageau. “It’s a showpiece for Leominster and a fi tting monument to LCU’s place in the community.”

By all accounts, LCU’s growth is a tribute to the efforts of its employees.

“I have marveled at the dedication of our employees and how effectively they reach out to community members to offer them the fi nancial products and advice they need,” explains Mr. Gasbarro.

Board Member Richard Sheppard agrees. “The people that we have working for us are our biggest asset. We can take pride in the fact that we provide great service to our members,” he says.

Built on a promise to support the community and strengthened by committed board members, employees and members, LCU is poised to further its mission for the next 60 years.

“We’ve grown to more than $600 million in assets today, but to continue to prosper we can never lose sight of how we started and why we are here,” says Mr. Sheppard.

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60 years of service to our Members

Nancy L. Graves, Clerk

Anthony A. Gasbarro, Chairman

Giulio G. Greco, Treasurer

Michael J. Sauvageau, Vice Chairman

Richard A. Sheppard, Board Member

The year 2013 was an exciting one at Leominster Credit Union. I was honored to be appointed as President and CEO in April and, along with the senior management team, quickly got to work assessing the needs and direction of the Credit Union. Through this team effort, we laid the groundwork for a plan that builds on our strengths and will ensure that we will be ready to meet our members’ needs well into the future.

Lending remains a key focus for the credit union. We were fortunate to have Craig Madonia join LCU as Senior Vice President of Lending in August of 2013. Craig is a resident of Leominster and has worked extensively in the Worcester area. His personal connection to our communities means that Craig brings, not only an expertise to the lending function, but he also understands the needs and challenges of our neighbors and local businesses. The ability to purchase a home, buy a car or send their children to college is vitally important to our members. LCU remains committed to providing affordable loans to help our members achieve these goals.

Total assets grew 4.2% from $608 million in 2012 to $634 million in 2013. Lending was very strong throughout the year and the loan portfolio grew 16.6% from $348 million in 2012 to $406 million in 2013. Total loan origination volume for the year was $191.7 million, making 2013 one of the best production years ever for LCU’s lending division. This growth refl ects the strategic decision to shift the makeup of the Credit Union’s assets from investments to loans, which allows us to better serve the needs of our members.

Although deposits decreased from $475 million in 2012 to $467 million in 2013, the composition of the deposit products continues to shift to core accounts like checking and savings. Members with these core accounts tend to consider Leominster Credit Union their primary fi nancial institution.

In 2013, LCU entered into a strategic partnership with Baystate Financial to offer our members Investment and Retirement Services. The addition of these new services means we are now able to provide our members with the convenience of managing all of their fi nancial needs right here at LCU.

We are excited about 2014 and the many strategic initiatives that are well underway. These initiatives will allow us to provide additional convenience andservice to our members.

I would like to commend our Board of Directors and our employees for the outstanding way in which they rose to the occasion in 2013. Because of their high level of service, the members’ needs were met without interruption during the transitions we experienced during the year.

We sincerely thank our members for choosing Leominster Credit Union. Without your loyalty and support, LCU would not be the successful institution that it is today. We remain committed to earning your trust every day by always being the Best at What We Do!

Sincerely,

John J. O’Brien Anthony A. GasbarroPresident and CEO Chairman of the Board

Message to Members

“...we laid the groundwork for a plan that builds on our strengths and will ensure that we will be ready to meet our members’ needs well into the future.”

Sincerely,

John J. O’Brien Anthony A. GasbarroPresident and CEO Chairman of the Board

Leominster Credit UnionStatements of Condition*

December 31, 2013 & 2012

December 31, 2013 December 31, 2012 (unaudited) (unaudited)

Assets Total Cash and Investments $197,822,183 $239,634,612 Loans: Installment 181,120,753 137,709,334 Real Estate 169,626,189 165,228,808 Home Equity 38,440,670 32,072,174 Member Business 17,053,293 13,410,046 Gross Loans 406,240,905 348,420,362 Allowance for Loan Losses (1,900,993 ) (1,656,875 ) Net Loans 404,339,913 346,763,487 Premises & Equipment, net 12,868,591 13,310,153 Other Assets 18,582,447 8,566,040 Total Assets $633,613,134 608,274,292

Liabilities & Surplus Deposits: Share Savings $269,784,125 $257,286,529 Share Certifi cates 197,479,375 217,683,763 Total Deposits 467,263,501 474,970,292 Borrowings 106,800,000 70,000,000 Other Liabilities 3,501,935 3,743,599 Total Liabilities 577,565,436 548,713,891 Total Surplus 56,047,698 59,560,401 Total Liabilities and Surplus $633,613,134 $608,274,292

* The Statements of Financial Condition at December 31, 2013 and 2012 are unaudited. The Credit Union’s fi nancial statements were audited as of September 30, 2013 and 2012. Audited fi nancial statements will be made available to members upon request.

Offi cersJohn J. O’Brien, President & CEOGary M. Abrams, EVP, CFO & COOCraig S. Madonia, SVP Lending Barbara A. Mahoney, SVP Human ResourcesCarol A. Southworth, SVP RetailJanet L. Belsky, VP MarketingThomas D. Clancy, VP Information TechnologyD. Oscar R. O’Connor, VP Lending OperationsIngrid G. Adade, AVP Financial EducationGregory S. Bourekas, AVP Indirect LendingKim A. Cary, AVP Branch ManagerJoseph R. Coller, AVP ITJohn J. Diggins, AVP Contact CenterHeather E. Dumais, AVP Real Estate LendingJennie E. Gray, AVP Branch ManagerLisa Gurevich, AVP Retail SalesCynthia G. Hamilton, AVP ControllerRandy J. Harris, AVP TreasuryShana Hendrikse, AVP Branch ManagerMaria L. Litalien, AVP Loan ServicingJune M. Navalany, AVP Audit/Compliance/Privacy Roland J. Paquette, AVP Facilities

Mychelle M. Phillips, AVP OperationsSuzanne M. St. Cyr, AVP Consumer LendingJulie K. Bergstrand, Real Estate Underwriting ManagerMaila L. Berry, IRA ConsultantEllenmarie Coughlin, Human Resources ManagerJoyce L. Cutler, Branch Manager IIYeydi Deya, Indirect Lending ManagerMichael A. Emma, Collections ManagerGeorge B. Fitzpatrick, Indirect Business Development ManagerBryon W. Goguen, Assistant ControllerPaula A. Konde, Branch Manager IJoanne D. Lattanzi, Marketing ManagerKelly A. Marrone, Operations ManagerBarbara J. Nutting, Branch Manager IJustin A. Silva, Retail Administrator Project ManagerSophia M. Tocci, Branch Manager ILydia Vazquez-Long, Real Estate Operations & Fair Lending ComplianceAnn S. Younie, Senior Technology Analyst

Employees Agnes AcquayeBrian ArsenaultDaisy AyalaDeborah BaconDoreen BarkerAshley BeroJoukiGicelle BritoMcKenzie BryantSteven CaligarisAndrea CamasJulie CaponeJayne ChaffeeDeborah ChaseElizabeth ClemenceKathleen CormierSarah CournoyerJenna CravenAngela CusterNancy DaigleMonique DanielsChristine Dees-WarpulaTeresa DePasqualeMickey DesaiMaria DeSantisSarah DevlinKelley DeWolfNancy DeyaRoberta DukeMarianne ElliaJames EllisDiane FarnsworthCookie FifeNicole Florio

Susan ForceStacie ForhanDonna GallantLindsey GeorgeMatthew GonyeaNeddie GonzalezDebra Greenfi eldKristen GustafsonBridget HaleyStephanie HernandezErin HigbeeCynthia HolderKathleen HurleyLinda KirouacErica KleinerLynne LaCossAmy LacoutureSusan LandryErika LeFortKaren LierCecelia LinnSherry MacyMichael MastrapasquaJessica MazzaDiane McNamaraNikki MooarCynthia MorlockCarolyn MshooshianTomeca MurphyAdelita NegronMartha NunezLisa OlcottTonjaleca Perkins

Karen PiraniRuthann PisciottaPatricia PlattJoseph ReynoldsDanielle RiveraMailly RiveraNancy SalaKatrina SimoneWilliam SpencerTracy SpringerAndrew SquierMeghan St. HilaireJane StamasLinda TaratutaJason TempleRachel TerrellJaime TomerPamela TortoraKaleigh VelardiStephanie VeroneauFiona VoAnneMarie WalkerSarah WarnerSuzanne WatkinsBonnie WaxmanChantelle WeidenhofElaine WentzellMao YangPa YangVeronica Zirulnik

Offi cersJohn J. O’Brien, Gary M. Abrams, Craig S. Madonia, Barbara A. Mahoney, Carol A. Southworth, Janet L. Belsky, Thomas D. Clancy, D. Oscar R. O’Connor, Ingrid G. Adade, Gregory S. Bourekas, Kim A. Cary, Joseph R. Coller, John J. Diggins, Heather E. Dumais, Jennie E. Gray, Lisa Gurevich, Cynthia G. Hamilton, Randy J. Harris, Shana Hendrikse, Maria L. Litalien, June M. Navalany, Roland J. Paquette,

Employees Agnes AcquayeBrian ArsenaultDaisy AyalaDeborah BaconDoreen BarkerAshley BeroJoukiGicelle BritoMcKenzie BryantSteven CaligarisAndrea CamasJulie CaponeJayne ChaffeeDeborah ChaseElizabeth ClemenceKathleen CormierSarah CournoyerJenna CravenAngela CusterNancy DaigleMonique DanielsChristine Dees-Warpula

Board of DirectorsAnthony A. Gasbarro, ChairmanMichael J. Sauvageau, Vice ChairmanGiulio G. Greco, TreasurerJoyce A. LaFleur, Assistant TreasurerNancy L. Graves, ClerkAmedeo E. Bilotta Bruce J. Bollivar Andrew D. Cousins Henry C. Kulik, Jr. Joseph V. Quintal Richard A. Sheppard

Advisory CommitteeRobbin B. AhlquistStephen C. BonazzoliJames C. BradburyRobert J. DelleChiaieMarc S. DohanNancy L. DubeJayne E. HadleyNicholas M. MercadanteWilliam T. MuldoonGregory R. SteffonVirginia A. TocciRobert M. Trudel

Honorary DirectorsAnthony J. CaliSantino P. FantozziSettimio R. FirmaniHenry P. Lisciotti, Jr.Edward O. MazzaferroJohn W. Reedy, Jr.Joseph J. Serafi niJoseph J. Tata

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