Your Lifeline for a Lifetime”

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CHAIRMAN’S REPORT Honolulu Fire Department Federal Credit Union 78TH Annual Meeting Minutes BOARD OF DIRECTORS Aloha kakou! As Chairman I would like to express my gratitude for the continuing and increasing effort of all March 28, 2015 Keith P. Williams, Chairman staff, management and my fellow Board members, in what HONOLULU FIRE DEPARTMENT turned out to be a dynamic 2015 full of changes. Hiram K. Keliipio, Vice Chairman FEDERAL CREDIT UNION Our Credit Union embarked on a few new initiatives in Chairman Keith P. Williams acknowledged the officials, committee Secretary 2015. Our field of membership was expanded to include Henry E. K. Akau, nearly all firefighters in Hawaii with the inclusion of the members and staff who served our credit union. (Names are listed on the Melvin H. Tsutsumi, Treasurer 2014 Annual Report) 2015 Federal Firefighters of Hawaii, IAFF Local F-263. We Alexander K. Beck Jr., Director also expanded our membership to include members and ANNUAL REPORT staff of the Hawaii Arts Alliance and the Friends of Iolani CALL TO ORDER Chairman Keith P. Williams called the 78th Annual Kevin J. Lyons, Director Palace. We established member exclusive dealership pricing with New City Meeting of the Honolulu Fire Department Federal Credit Union to order at Nissan, Servco Auto Windward, and Servco Scion. These partnerships give 5:32 p.m. in the Lounge at the Manoa Grand Ballroom on Saturday, March Guy N. Katayama, Director our members access to dealership specials and exclusive pricing. We also 28, 2015 There being no objections, Chairman Williams appointed the introduced our own mobile app for iOS and Android devices with our following: Accountant Renee Shintani as Recording Secretary, Vice RescueNet Mobiliti downloadable app. Chairman Hiram Keliipio as Parliamentarian and Henry “Hardy” Akau as SUPERVISORY COMMITTEE I am pleased to report that our credit union remains financially strong. We Sergeant-At-Arms for this meeting. grew in loans and shares and continued to contribute to our equity, which Mark K. Kuwaye, Chairman helps us weather any future tough economic times. Interest margins and our QUORUM ability to make money were tight in the low interest rate environment, but our Chairman Williams called upon Vice Chairman Hiram Keliipio Eric A. Morgado, Member prudent strategy to manage this environment is paying off. Even still, interest of the Credentials Committee for his report. Vice Chairman Keliipio rates are forecast to remain low in spite of the Federal Reserve’s signal to reported a total of 26 members present at this meeting, exceeding the Mark K. Adams, Member continue raising their benchmark rate. minimum of 15 as required by HFDFCU bylaws. There being no Michael Pangilinan, Member Directors and management are working extremely hard to keep up to date questions, those present agreed by consensus that this meeting has met the with the changing financial and regulatory landscape by continued requirement of a quorum present. Daniel Yamashiro, Member professional development throughout the year. They have attended seminars, training courses and additional meetings to build the credit union’s capability. AGENDA Chairman Williams requested a review of the Agenda printed This has taken up a great deal of their time, which they have happily given, in in the 78th Annual Meeting Program. There being no questions or STAFF the interest of our Credit Union. I thank them for their dedication to the corrections, the Agenda approved. enhancement of the Credit Union. Jon K. Mitomi, Chief Executive Officer Many thanks to HFDFCU’s Board, Supervisory Committee and staff for APPROVAL OF MINUTES their talents, dedication and care for our members. Mahalo nui loa for your As the next order of business, Chairman Guy Usui, Vice President, Controller loyalty, your business and especially for being an important part of the very Williams requested those present to review the minutes of the 77th Annual special Fire Ohana. Meeting as printed in the 2014 Annual Report. There being no questions Douglas Mashino, Marketing & Business Development Keith P. Williams or corrections, the minutes approved as printed. Daniel S. Dick, Financial Services Manager Board Chairman OFFICIALS’ REPORTS Chairman Williams requested members to Elaine Kaneshige, Compliance Officer review the reports of the Chairman, Chief Executive Officer and Treasurer, Renee Shintani, Accountant CEO’S REPORT which are included in the annual report. Hearing no questions or corrections, the officials’ reports approved. Tanya Kaahanui, Administrative Assistant Our steady and prudent work in 2015 resulted in very Casey Onaga, Financial Services Officer admirable figures: We increased in assets, loans, deposits, COMMITTEE REPORTS Chairman Williams requested members to Stephanie Liza Escusa, Financial Services Officer and even income. And while those milestones might seem review the report of the Supervisory Committee, which are included in the unremarkable in these very “steady” times, let’s put that annual report. Hearing no questions or corrections, the committee report Desiree Hidaro, Financial Services Representative into perspective. Going back to the turn of the century, approved. Karen Ogata, Financial Services Representative our credit union doubled in assets from just $32 million in 2000 to more than $65 million at the end of last year. UNFINISHED BUSINESS Chairman Williams inquired if anyone We owe success like that to our members – for trusting present has any unfinished business to discuss. Hearing none, he continued us to be your credit union! And we keep that in the meeting with New Business. perspective at all times. Perspective is what drove us in 2015. We know our members rely on HFD Federal Credit Union for everything from everyday Your NEW BUSINESS Chairman Williams inquired if anyone present had any transactions to big-ticket needs. new business. At this time Chairman Williams encouraged everyone to Our Chairman’s and Treasurer’s Reports both describe a number of read the Annual Report. Chairman Williams announced to the members changes that occurred in 2015. All of those changes were investments in the that they will take great pride to learn the outstanding achievements of the value we bring to our members’ lives, including being able to bring what we Lifeline credit union in the past year. The results are directly related to the support do to more people. Honolulu Fire Department We’re still Hawaii’s only firefighters’ credit union. And now, nearly all of and loyalty of our members. Hawaii’s firefighters can join! We also added two non-profit groups to our Federal Credit Union membership, which enable us to serve more members and help you refer RESULTS OF THE 2015 ELECTION Chairman Williams announced for a your friends and associates who might not have been able to join before. there is no election by ballot for 2015 and there are no nominations from 1200 North School Street As we move into 2016 and continue to enhance the benefits of credit union the floor as the number of nominees equal the number of positions to be membership, perspective will still drive what we do. We know not all filled on the Board of Directors. Incumbent Directors up for reelection are: Honolulu, Hawaii 96817 members are created equal, and future enhancements will always focus on Henry “Hardy” Akau and Melvin Tsutsumi. (808) 853-2355 Lifetime doing more for all of our members across a broad spectrum. Thank you again for your continued trust in allowing us to be your ADJOURNMENT There being no further business to come before this Lifeline for a Lifetime. meeting, on a motion by Vice Chairman Keliipio, seconded by Director Beck, the meeting adjourn at 5:37 p.m. at which time prizes given to those Mahalo & Aloha! present. National Credit Union Administration, a U.S. Government Agency Jon K. Mitomi Federally Insured by NCUA Chief Executive Officer National Credit Union Administration, a U.S. Government Agency Federally Insured by NCUA 3117_replace italics_85458_HonFireDept 3/28/16 3:48 PM Page 2

TREASURER’S REPORT STATEMENT OF FINANCIAL CONDITION STATEMENT OF INCOME DISTRIBUTION OF INCOME As of December 31, 2015 Year Ending December 31, 2015 (% of total income received)

Cost of Hawaii’s major economic indicators were mostly LOANS & CASH OPERATING INCOME Operations Cost of Shares positive as we ended 2015, which showed decent Loans 18,010,187 Interest on Loans (net) 1,000,469 84.8% increases over the same time in 2014. Hawaii’s 5.6% economy is expected to continue positive growth (less allowance for loan losses) (616,651) Income from Investments 674,999 into 2016. Cash 3,922,785 Total Interest Income 1,675,468 In 2015, Honolulu Fire Department Federal Credit Union (HFDFCU) continued to make contributions to Equity Provision for capital. We added $155,673 in 2015 resulting in a INVESTMENTS Total Dividend Expense 112,409 Net Worth to Total Assets Ratio of 10.77%, which is 7.8% Loan Losses higher than the National Credit Union Administration’s (NCUA’s) Federal Agency Securities 2,915,698 Interest on Borrowed Money 0 1.8% benchmark to be classified as “well capitalized,” which is 7.00%. We Corporate Centrals 0 Net Interest Income 1,563,059 increased our loan portfolio by $3.06 million in 2015 with loan quality Banks & S&Ls 39,410,835 remaining high as measured by low loan delinquency rates and low loan losses. Moving forward, the overall economic environment for Total Investments 42,326,533 Provision for Loan Losses (35,979) interest rates is forecast to increase slightly in 2016, which will cause Net Income after Provision for Losses 1,527,080 our credit union to implement strategic initiatives to address this rising rate environment. OTHER ASSETS On behalf of the Board of Directors, Volunteers, and staff, I would Land & Building (net) 1,252,829 OPERATING EXPENSES like to thank the members for your continued trust and support. With the Board of Director’s leadership and guidance, and the staff’s Other Fixed Assets (net) 9,124 Employee Compensation 512,267 dedication to meet your financial needs, our credit union can continue NCUSIF Capital Deposit 562,204 Employee Benefits 141,349 to be “Your Lifeline for a Lifetime”. All Other Assets 200,572 Travel & Conference 57,664 Melvin Tsutsumi Association Dues 15,196 Treasurer TOTAL ASSETS 65,667,584 Office Occupancy 72,621 Office Operations 347,990 FIVE YEAR EQUITY & ASSET GROWTH LIABILITIES & SAVINGS Advertising & Promotion 118,177 (in millions of dollars) Accounts Payable 145,359 Loan Servicing Expenses 77,721 Dividends Payable 760 Professional & Outside Services 287,720 SUPERVISORY COMMITTEE REPORT All Other Liabilities 582,135 Member Insurance 0 Assets Equity Share Certificates 7,594,401 Operating Fees (NCUA) 11,711 62.6 64.3 65.1 64.0 65.6 The Supervisory Committee, appointed by the Share Draft Accounts 8,070,124 Miscellaneous Operating Expenses 55,562 65 Board of Directors, is charged with ensuring that the Honolulu Fire Department FCU member funds are IRA/Retirement 2,172,543 55 secure; the Credit Union’s financial records & Other Member Savings 40,032,234 Total Operating Expenses 1,697,978 operations are in order; and officials diligently carry Total Liabilities & Savings 58,597,556 45 out their duties in accordance with Federal regulations. Total Other Operating Income 325,276 35 During the year, the Committee met regularly to EQUITY Total Non-Operating Income/(Expense) 1,295 review operational and member records. 25 Additionally, the Committee engaged Kwock & Company, CPAs, to Regular/Statutory Reserves 1,713,534 complete a full review of HFDFCU’s financial condition and Undivided Earnings 5,356,494 NET INCOME 155,673 15 performance. I am pleased to report that our Credit Union continues to Total Equity 7,070,028 Millions of Dollars 6.6 6.6 6.8 6.9 7.0 operate in a safe and sound manner while preserving the integrity of 5 our member shares and loans. On behalf of the Committee, I wish to thank the Board of Directors, TOTAL LIABILITIES, -5 leadership and staff for their support and assistance with the fulfillment 2011 2012 2013 2014 2015 of our duties. Thank you for your confidence and trust in the Honolulu SAVINGS & EQUITY 65,667,584 Fire Department FCU. YEARS Mark Kuwaye Supervisory Committee Chairman 3117_replace italics_85458_HonFireDept 3/28/16 3:48 PM Page 1