2889 E. MapleTroy, MI 48083(248) 619-0440

11905 Joseph CampauHamtramck, MI 48212

(313) 365-1000

25555 West WarrenDearborn Heights, MI 48127

(313) 563-8200

www.pacfcu.com • www.uniakredytowa.com

Boa

rd o

f Dire

ctor

sO

ffice

Sta

ff

Anita Dul, Chief Operations OfficerJohn Swidwinski, Chief Executive OfficerKazimierz Kozlowski, Loan ManagerStanislaw Rozmiej, Accounting ManagerHalina Bilek, Branch ManagerMaria Grabas, Branch ManagerAllison Poshadlo, Branch ManagerAndrzej Leszczynski, Member ServicesSuzanna Zwirko, Member Services Arkadiusz Czabanski, TellerIrena Filip, TellerIwona Golebiewski, TellerAnna Kardasz, TellerKaren Oliverio, TellerLukasz Put, Teller

Julita Sobiesiuk, TellerElzbieta Stevens, TellerSylwia Szczesiak, TellerEva Szostek, TellerMonica Urbaniuk, TellerPaulina Wilcox, TellerNatalia Wolniewicz, TellerAgnieszka Nedelcu, Accounting AssistantGrazyna Zukowska, Lending ConsultantDavid Senderowski, Lending ConsultantGrazyna Pawlowski, Adm. Assistant, CreditPiotr Skorupka, Credit SpecialistJoanna Ostentoski, IT CoordinatorMariola Thiel, Marketing ManagerThomas Wolski, Finance Specialist

George Kurzatkowski, Chairman Zdzislaw Miloboszewski, Vice-ChairmanMark Reaume, SecretaryAdam Rusinowski, Treasurer Mariusz Arszylo, DirectorStanislaw Boguszewski, Director

Call to OrderAscertainment of QuorumReading of Annual Meeting MinutesBoard of Directors' ReportTreasurer's ReportCredit Committee Report

Supervisory Committee ReportUnfinished BusinessNew BusinessElectionsAdjournment

Stanislaw Golec, DirectorMatthew Grecki, DirectorStefan Kobylecki, DirectorSophie Kosowski, DirectorHendrik Zenicki, Director

2013Annual Report

38th Annual Membership MeetingThursday, April 24, 2014

American-Polish Cultural Center, Troy, Michigan

AgenDA

The Supervisory Committee serves as the auditing body; ensuring PAC Federal Credit Union complies with all applicable laws and regulations and acts in the best interest of the Credit Union’s members/owners in order to safeguard their assets. The Supervisory Committee is appointed annually by the Board of Directors.

To discharge these responsibilities the Committee retained the public accounting firm of Cindrich-Mahalak and Company, PC, to perform the following functions:

• To conduct an independent external opinion audit of the financial statements for the period from July 31, 2012 to July 31, 2013;

• To conduct the annual Bank Secrecy Act and Office of Foreign Asset Controls examination; and

• To conduct audits of the Credit Union’s Automated Clearinghouse processes.

The Committee also reviewed and addressed the findings of the annual examination of the Credit Union by the National Credit Union Administration.

The independent auditor found that the financial statements present fairly, in all material aspects, the financial position of PAC Federal Credit Union in conformity with Generally Accepted Accounting Principles. The Supervisory Committee finds that the required policies and procedures are in place and that PAC Credit Union’s controls are effective.

On behalf of the Supervisory Committee, we would like to congratulate the staff and management of the Credit Union for another productive year.

The Supervisory Committee David Porada, Chairman Leslie Banas Gregory Filar Arkadiusz Gladysz Richard Konrad

Rep

ort o

f the

PA

C F

eder

al C

redi

t Uni

onSu

perv

isor

y C

omm

ittee

In 2013, PAC Federal Credit Union continued to build on the increase in our loans that we realized in 2012, but with even greater results. The increase in the Credit Union’s loan portfolio was a dramatic 9.24%, compared to an average among credit unions in our peer group of 6.88%. Loans that were disbursed in 2013 amounted to $20.42 million, exclusive of credit card purchases and cash advances. This increased our year-end loan total by almost $5.58 million over the prior year to $65,974,612.

Since the founding of PAC Federal Credit Union, the total of loans that we have provided to our membership exceeded $300 million by the end of 2013.

This increase in loans came in a year when there was still a degree of trepidation about our economy and where auto dealers continued to provide low rate and zero rate financing on new car purchases.

In addition to yet another outstanding year for loan growth for our Credit Union, we continued our loan quality standards with delinquent loans of 0.72% as a percentage of total loans at the end of 2013. The average for comparable credit unions was 1.07%.

In 2013, the amount of loans charged off remained somewhat steady at $319,600, a little more than the $314,600 last year. The Credit Union also fully funded the loan loss allowance account by more than $394,000 last year.

Part of the resurgence in our loan growth was the availability of low rate mortgage loans and the continued availability of affordable housing. The Credit Union also acquired $1.05 million in loan participations allowing us to capitalize on attractive interest rates on business loans originated by other, local credit unions.

The Credit Union continues to firmly believe that our membership is best served by the lending practices of our Credit Union. No one knows our members’ borrowing needs better than we do. The foundation of our business is to provide a source of loans to our members. Our mission is to be the best source available for loans to our members.

Once again, thanks to our members for the confidence shown in our Credit Union and we look forward to your continued support.

PAC Federal Credit Union Credit Committee Kazimierz Kozlowski, Chairman Mariusz Arszylo Stefan Kobylecki Mark Reaume John Swidwinski

Rep

ort o

f the

C

redi

t Com

mitt

ee

Income and expensesFor the year ending December 31, 2013

Statement of Financial ConditionAs of December 31, 2013

Income 2013 2012

Interest on Loans $ 2,658,674 $ 2,690,127

Interest on Investments $ 379,020 $ 372,390

Other Operating Income $ 587,220 $ 594,002

Total Gross Income $ 3,624,914 $ 3,656,519 expenses

Compensation & Benefits $ 1,203,636 $ 1,197,785

Office Occupancy Expense $ 223,148 $ 220,338

Office Operation Expense $ 279,306 $ 266,222

Education and Promotion Expense $ 57,156 $ 62,179

Loan Servicing Expense $ 106,198 $ 102,042

Professional & Outside Services $ 350,659 $ 356,311

Operating Fees $ 21,390 $ 17,232

Interest Expense $ 59 $ -

Provision for Loan Losses $ 394,803 $ 363,234

Member Insurance $ 1 $ 3

Corporate Stabilization Expense $ 74,482 $ 84,897

Other Expenses Travel & Conference $ 8,086 $ 8,890 Annual Meeting $ 949 $ 1,290 Association Dues $ 5,741 $ 5,755 Other Misc. Expense $ 78,289 $ 105,992 Total Other Expenses $ 93,065 $ 121,927

Total Operating Expense $ 2,803,903 $ 2,792,170

Income Before Dividends $ 821,011 $ 864,349

Non-Operating Gain (Loss) $ 13,212 $ (44,969)

Member Dividends $ (386,748) $ (496,270)

Net Change to Reserves $ 447,475 $ 323,110

Assets 2013 2012Cash $ 1,085,003 $ 1,010,380Loans: Real Estate Loans $ 54,920,126 $ 52,069,726 Real Estate Lines of Credit $ 3,751,725 $ 2,193,460 Consumer Loans $ 3,627,056 $ 3,776,409 Credit Cards & Lines of Credit $ 1,037,714 $ 1,051,361 Business Loans $ 2,406,555 $ 2,142,683 Less Participations Sold $ 231,437 $ (835,311) Allowance for Loan Losses $ (423,225) $ (348,009) Total Net Loans $ 65,551,388 $ 60,050,319

Investments: Deposits in Central CU and Banks $ 3,224,422 $ 3,899,662 Federal Home Loan Bank Stock & Deposit $ 572,377 $ 554,385 Certificates of Deposit $ 26,613,480 $ 27,813,980 Government Securities $ 2,500,000 $ 2,500,000 Corporate Central Capital Deposit $ 433,100 $ 433,100 Total Investments $ 33,343,379 $ 35,201,127

Other Assets: Land & Buildings $ 1,390,814 $ 1,470,738 Other Fixed Assets $ 39,069 $ 52,077 NCUA Insurance Deposit $ 931,028 $ 893,649 Other Assets Accrued Investment Income $ 33,393 $ 32,647 Accrued Loan Income $ 128,545 $ 129,769 Prepaid Expenses $ 58,313 $ 73,441 Other $ 362,045 $ 557,004 Total - Other Assets $ 582,296 $ 792,861 Total Assets $ 102,922,977 $ 99,471,151

Liabilities & Equity: Accounts Payable $ - $ - Dividends Payable $ 138,646 $ 170,253 Other Liabilities $ 62,209 $ 270,081 Total Liabilities $ 200,855 $ 440,334

Members’ Equity: Member Shares $ 26,273,606 $ 23,777,282 Money Market Shares $ 27,143,567 $ 27,091,681 Share Draft Accounts $ 11,078,075 $ 9,420,586 Share Certificates $ 14,504,531 $ 15,237,944 Individual Retirement Accounts $ 16,039,646 $ 16,268,101 Total Members’ Equity $ 95,039,425 $ 91,795,594

Reserves: Regular Reserves $ 1,495,057 $ 1,495,057 Undivided Earnings $ 6,187,640 $ 5,740,166 Total Reserves $ 7,682,697 $ 7,235,223 Total Liabilities, Equity & Reserves $ 102,922,977 $ 99,471,151