Federally Insured by NCUA

2014Annual Report

A L A N D M A R K Y E A R

Charter Oak At-A-Glance • Branch and Headquarters: 1055 Hartford Turnpike, Waterford, CT 06385 • Branch Network: 14 Branches in New London and Windham counties • Branch Locations: Dayville; Groton; Killingly; Montville; New London; Niantic; Norwich; Pawcatuck; Putnam; Waterford; Willimantic. • Number of Employees: 197 • Assets: $847 million • Deposits: $703 million • Loans: $632 million • Facebook address: Facebook.com/CharterOakFCU • Website address: CharterOak.org • Telephone: 860.446.8085 or 800.962.3237 Employees, Assets, Deposits, and Loans as of December 31, 2014

Table of Contents Chairman & CEO’s Report .......................................................................................... 1

Financial Indicators .................................................................................................... 2

Number 1 Lender........................................................................................................ 3

Charter Oak’s New Branch and Headquarters ........................................................... 4

Gold Rewards ............................................................................................................. 6

eBanking/Technology ................................................................................................. 7

Community Giving ...................................................................................................... 8

Condensed Financial Highlights ................................................................................. 9

Volunteers/Board of Directors/Senior Staff/Branch Locations ................................. 10

Our new Branch and Headquarters in Waterford, which opened in June 2014, reflects our financial strength and success as eastern Connecticut’s largest credit union and a leading financial institution in Connecticut. See more photos on Pages 4 and 5. ©Robert Benson Photography

COVER PHOTO:

To Our Members:

The year 2014 was truly a landmark year for Charter Oak Federal Credit Union! From the opening of our new Branch and Headquarters in Waterford – a proud symbol of our strength and success – to the celebration of 75 years of service to eastern Connecticut, Charter Oak marked many significant milestones over the past year.

In June, under bright and sunny skies, Governor Dannel Malloy and U.S. Senator Richard Blumenthal joined our Board of Directors, Supervisory Committee, senior staff, and our employees and a host of dignitaries to celebrate the grand opening of our new Branch and Headquarters at 1055 Hartford Turnpike in Waterford. With nearly 65,000 square feet of space, this impressive building with its distinctive architectural style offers our members a state-of-the-art branch and consolidates our entire administrative staff in one building, with room for our continued expansion as eastern Connecticut’s leading financial-services provider.

This grand opening was a momentous event in the history of Charter Oak, and came the same year we celebrated 75 years of service. We’ve come a long way since our humble, but proud, beginnings in 1939 in a Groton shipyard.

What began with a modest $250 investment has grown into a financial success story with assets of nearly $850 million by the end of 2014 and a branch network that stretches from the beaches of southeastern Connecticut to the upper reaches of eastern Connecticut’s “Quiet Corner.”

Among Charter Oak’s other notable achievements during 2014:

• We created a new “GO” checking account offering an attractive 3.00% APY. This account, originally created to celebrate our Grand Opening in June, is becoming one of our most popular accounts.

• We were named eastern Connecticut’s Number 1 Lender for an unprecedented fifth year. We are the lender of choice, originating more than 5,200 mortgages worth more than $656 million over the past five years.

• We’re proud of our community giving. Charter Oak’s giving efforts to non-profits and charitable groups since the inception of our Community Giving Program exceeded the $1 million mark in 2014, a true indication of just how much Charter Oak cares about all the communities we serve.

• We ramped up our auto lending through a select group of preferred dealerships in both New London and Windham counties. Our initial results have been very positive, and these auto loans are an important way to further diversify our lending portfolio.

• Our cutting-edge eBanking service allows you to bank when you want, where you want 24/7. We unveiled Mobile Deposit that allows our members to deposit checks with the mere click of their smartphone camera or iPad tablet. And we enhanced and upgraded our bill payment system, making bill paying via Online Banking a breeze.

• Our unique Gold Rewards member-appreciation program reached new records. During 2014, we paid out a record $396,100 in annual $100 cash bonuses, and more than $1.6 million in total cash bonuses since 2010. In addition, we rebated $391,177 in ATM fees, bringing the total payout in annual cash bonuses and rebates to more than $2 million since we created Gold Rewards in 2010.

Throughout the year, our careful stewardship of our financial condition never wavered. Our key financial indicators all showed strong growth in 2014. Our robust financial health provides the foundation to offer new products and services to our members and provide new technologies to make banking with Charter Oak easier, quicker and even more convenient. As we like to say, Members Bank Better at Charter Oak.

We are very proud of our landmark year in 2014 and our continuing growth in 2015. But we know that we couldn’t have a successful year – or a successful credit union – without your support. We thank you for being a loyal member of Charter Oak and for making us your financial institution of choice amidst the clamor and clutter of financial competitors.

And we want you to know that each employee at Charter Oak is proud to serve you and will work hard to ensure that Charter Oak continues to stand out among its peers as a true financial-services leader and innovator.

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Chairman & CEO’s Report

Guy HenryChairman of the Board

Brian A. OrensteinChief Executive Officer

2

Charter Oak’s Key Financial Indicators Are Strong

Assets Grew 7% in 2014

All figures are as of December for each year

Loans Increased 10% in 2014

All figures are as of December for each year

Deposits Rose 5% in 2014

All figures are as of December for each year

Members EquityWas Up 8% in 2014

All figures are as of December for each year

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A Landmark Year for Lending: We’re No. 1 – Five Years Running!

#1 M

ORTG

AG

E LENDER • EASTERN CONNECTICUT

2010 • 2011 • 2012 • 2013 • 20

14

5Years

When looking for a mortgage in eastern Connecticut, look to Charter Oak! Once again, our credit union is the Number 1 lender in New London and Windham counties combined. Over the past five years, we’ve originated more than 5,200 mortgages with an impressive total value of more than $656 million.

More people across New London and Windham counties havechosen Charter Oak to be their mortgage provider and partner than any other financial services provider, from the large national banks, to community banks and local credit unions.

Charter Oak’s lending teams, combined with our experienced branch staff, have shown tremendous teamwork and dedication to be the Number 1 mortgage lender in 2010, 2011, 2012, 2013 and 2014*.

Our teams work hard each day to offer our members the right mortgage products and services to meet their needs.

• 10, 15, 20 and 30-year Conventional Mortgages• 1, 3, 5, 7, and 10-year Adjustable Mortgages• Biweekly and Jumbo Mortgages• VA, FHA, USDA and CHFA mortgages

• Cost Saver (15 or 30 year) and Accelerator (8 or 12 year) Mortgages

• Home Equity Loans and Lines of Credit• Seasonal and Investment Mortgages

We Offer Great Mortgage Products, Including:

* Source: The Warren Group, Boston, MA. Data for New London, Windham counties combined. Includes all residential mortgages with a value between $1 and $2,000,000.

Visit CharterOak.org

Apply online! Stop by! Call us!

Stop by a nearby branch 860.446.8085, ext. 3201 or 800.962.3237, ext. 3201

We Have Great Terms and Great Rates! It’s Easy To Apply!

June 16, 2014, was a very proud day for Charter Oak and its members. On that historic day, marked by bright sunshine, a big crowd and very proud employees, we opened our new Branch and Headquarters at 1055 Hartford Turnpike in Waterford. Since then, our new Branch and Headquarters has become a landmark for its architecture, functionality and beauty.

Our new complex overlooks the busy Route 85 corridor, and our large orange Charter Oak tree adorning the front of our building is seen by all who drive by. Our headquarters’ full-service branch – Charter Oak’s 14th – has surpassed first-year projections. And we continue to reap the newfound efficiencies and productivity gains by consolidating our entire administrative staff in our new site.

Our expansive Community Room at our headquarters has already become a popular gathering space for eastern Connecticut’s many non-profits and charitable organizations. Use of the 190-seat facility, which features state-of-the-art audio/visual equipment, is free to non-profits.

As Charter Oak continues to grow, we’ve anticipated that growth with room in our new headquarters to accommodate our future expansion.

Enjoy these photos of our new Branch and Headquarters in Waterford, and we encourage you to stop by and enjoy a cup of coffee in our spacious atrium or visit with our branch staff. We look forward to seeing you!

A Landmark in Eastern Connecticut: Charter Oak Opens New Branch and Headquarters

All photos ©Robert Benson Photography 4

• Address: 1055 Hartford Turnpike, corner of Industrial Drive and Route 85, Waterford.

• Size: Multi-story building is nearly 65,000 square feet, including branch and headquarters facilities.

• Community Room: For information about our Community Room, please call 860.446.3238 or 800.962.3237, ext. 3238.

• Branch Hours: Monday through Thursday, 9 a.m. to 5 p.m.; Friday, 9 a.m. to 6 p.m.; Saturday, 9 a.m. to Noon.

• Branch Drive-Up Hours: Monday through Wednesday, 8 a.m. to 5 p.m.; Thursday and Friday, 8 a.m. to 6 p.m.; Saturday, 9 a.m. to 1 p.m.

Branch and Headquarters Fast Facts

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Charter Oak’s unique Gold Rewards member-appreciation program reached the five-year mark in 2014, and we marked this momentous occasion with increases in our Gold Rewards membership numbers and annual bonuses, which both reached new record highs.

Gold Rewards is our way of saying a special thank you to the increasing number of members who choose to make Charter Oak their primary financial institution. Gold Rewards membership does indeed have its privileges, like our $100 annual bonus, our special Gold Rates on deposits, no ATM fees (some limitations apply) and many more benefits.

In 2014, we reached several impressive milestones with Gold Rewards:

Charter Oak can proudly say that we are the only local financial institution – bank or credit union – that consistently rewards its Gold Rewards members with $100 annual cash bonuses, along with the many other special Gold Rewards benefits.

So, if you’re not yet a Gold Rewards member learn how you can start enjoying these great benefits today!

Stop by any of our convenient branches in New London or Windham counties or contact our Call Center at 860.446.8085 or 800.962.3237 today to learn how you can become a Gold Rewards member!

A Landmark Year for Gold Rewards: Membership, Bonuses Reach New Record

We paid out a record

$396,100in annual $100

cash bonuses

We rebated $391,177 in ATM fees,

bringing the total payout in annual

cash bonuses and rebates to more than $2 million since 2010

We paid out over $1.6 million

in total cash bonuses since Gold Rewards’

inception in 2010

StepStep StepStep StepStepStepStep StepStep StepStepStepStep StepStep StepStepMaintain a personal checking account, and....

Have a month-end minimum combined deposit and loan balance of $20,000 or more, and...

Either maintain a monthly Direct Deposit totaling $1,500 or more or have BillPay with a minimum of 4 unique payments posted within the month.

Gold Rewards Membership Is Growing

Gold RewardsAnnual Bonuses Are Climbing

All figures are as of December for each year All figures are as of December for each year

Qualifying for Gold Rewards Is As Easy As 1, 2, 3!

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Banking these days has to be convenient. You want to bank where you want, and when you want – whether it’s on your laptop, tablet, personal computer or your smartphone.

At Charter Oak, our eBanking services give you that flexibility to bank on your terms – and your time. We offer convenient Online Banking and Mobile Banking, and easy-to-use smartphone apps for Android and iPhone devices.

In 2014, we launched our newest feature, Mobile Deposit, which has quickly caught on as a go-to service for our eBanking members. Mobile Deposit is safe, secure and convenient. You can easily deposit checks from your smartphone or iPad tablet, and it’s really as simple as taking a photo.

And we further expanded our eBanking suite of services by upgrading our bill payment system for those using our popular BillPay. This upgrade makes paying bills even easier – it allows you to manage all your bills from one main dashboard, and make a payment in just one click!

So whether you use our Online Banking feature, our Mobile Banking option or our easy-to-use apps for Android, iPhones or iPads, you’ll find that eBanking at Charter Oak is easy, secure and available 24/7.

A Landmark Year for eBanking: Mobile Deposit Improves Your 24/7 Banking Experience

Visit CharterOak.org Visit any of our convenient branches

Or contact our Call Center at 860.446.8085 or 800.962.3237

Learn More About Our eBanking Services!

Our smartphone app for Apple and Android phones is an increasingly popular choice for our members.

By simply downloading this convenient app,our members are merely a tap away from all

the conveniences of 24/7 banking.

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Charter Oak has a long, and very proud, history of giving back to the communities that we serve through our employee Community Outreach efforts and our Community Giving Program. And that was certainly true in 2014, when our overall community giving efforts since we began the program surpassed the $1 million mark.

• In 2014, we broadened our giving efforts by increasing our annual contributions to our Community Giving

Program by 10 percent.

• That annual contribution will grow again in 2015, thanks in part to our newly expanded scholarship

program offering a $2,000 scholarship to each high school in New London and Windham counties with a

student enrollment of at least 100.

Since we began our Community Giving efforts in 2009, we’ve been able to expand our reach throughout eastern Connecticut to help our region’s non-profits and charitable groups feed the hungry, provide health care services, offer educational opportunities and teach workforce skills to those needing gainful employment.

We are proud, as well, of our longtime partnership with the United Way of Southeastern Connecticut. Brian A. Orenstein, our Chief Executive Officer, along with Wayne Burgess, our Supervisory Committee Chairman, led a very successful 2014 United Way Annual Appeal. And United Way officials showed their appreciation for our efforts by bestowing their Partner of the Year, Benefactor and Outstanding Achievement Awards to Charter Oak.

The opening of our new Branch and Headquarters in Waterford also gave us the opportunity to offer eastern Connecticut’s non-profits and charitable groups free use of our new Community Room, an expansive meeting place featuring the latest audio/visual equipment. A growing number of non-profits have already benefited, from regional arts and cultural organizations to social-service agencies.

Charter Oak has a culture of caring. From the many community outreach efforts led by our employees to our expanded Community Giving program, our credit union is here to help those in need and to improve the communities that we serve across eastern Connecticut.

A Landmark Year for Giving:

Community Donations Surpass $1 Million Mark

Charter Oak employees gather around a large assortment ofback-to-school supplies. Our employees donate these supplies as

part of our annual “Backpack to School” campaign.

Our Community Room at our Branch and Headquarters is a great resource for non-profits and charitable groups. This expansive room features state-of-the-art

audio/visual equipment and is available free of charge to these groups.

2014 2013

Cash and Other Assets $ 75,141,612 $ 66,264,709

Loans to Members, Net $ 632,398,666 $ 574,943,370

Investments 139,657,098 $ 148,074,097

Total Assets $ 847,197,376 $ 789,282,176

Members’ Shares and Savings $ 703,452,187 $ 667,951,108

Members’ Equity $ 84,762,230 $ 78,199,444

Other Liabilities $ 58,982,959 $ 43,131,624

Total Liabilities and Equity $ 847,197,376 $ 789,282,176

Income $ 36,675,630 $ 35,454,921

Interest Expense $ 4,556,980 $ 5,282,076

Operating Expenses and Provisions for Loan Losses $ 27,283,418 $ 25,362,677

Net Income $ 4,835,232 $ 4,810,168

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Charter Oak had a landmark year in 2014, and that wouldn’t be possible without our strong financial foundation. We are proud to report that 2014 was a very good year in terms of our financial performance, with growth in numerous key indicators – from total assets to net income. Charter Oak’s strong financial position provides the fuel for our continued growth and expansion.

In 2014, our assets increased 7 percent to $847 million. In addition, our deposits grew 5 percent to $703 million and we expanded our loan portfolio by an impressive 10 percent, to $632 million. Our net income showed growth, as well, rising to $4.84 million in 2014.

Our Condensed Financial Highlights below clearly show that our credit union remains a safe, sound and secure financial institution.

Our Net Worth Ratio, a key measure of our overall financial strength, was strong during 2014. In fact, our Net Worth Ratio is one of the strongest among our financial peers.

This is a very important financial indicator, and we are pleased to report that at year-end 2014, our Net Worth Ratio was 10.01%, which is well above our regulatory requirements.

Charter Oak is a strong financial institution, and our Net Worth Ratio signifies that our credit union remains financially safe and sound.

Our Financial Numbers Reflect Our Strength and Success

Our Net Worth Ratio Remains Strong

Condensed Financial Highlights

Net Worth Ratio

10.01%

Branch and Headquarters1055 Hartford TurnpikeWaterford, CT 06385

Dayville589 Hartford PikeDayville, CT 06241

Electric Boat (Limited Access)50 Pequot AvenueNew London, CT 06320

Groton32 Chicago AvenueGroton, CT 06340

625 Long Hill RoadGroton, CT 06340

Montville601 Norwich / New London Turnpike (Rt 32)Montville, CT 06353

Niantic335 Main StreetNiantic, CT 06357

NorwichOne Connecticut AvenueNorwich, CT 06360

Pawcatuck20 Liberty StreetPawcatuck, CT 06379

Putnam7 Providence Pike (Route 44)Putnam, CT 06260

Waterford3 Boston Post RoadWaterford, CT 06385

Willimantic893 Main StreetWillimantic, CT 06226

BRANCH LOCATIONS

Left to RightBrad Heil, Director; Paul McGlinchey, Secretary; Pierre Brochu,Director and Past Chairman; Michael Malvinni, Director;Barbara Gregg, Treasurer; Melvin Olsson, Vice-Chairman;Guy Henry, Chairman.

BOARD OF DIRECTORS

Wayne Burgess, ChairmanPaul Filippetti

John Grossomanides, EmeritusAnnette Janovic

SUPERVISORY COMMITTEE

Back Row

Joseph L. Childress, Senior Vice President/Chief Information Officer

Brian A. Orenstein, Chief Executive Officer

Bradley J. Sullivan, Senior Vice President/ Chief Financial Officer

John J. Dolan, Senior Vice President/ Chief Lending Officer

Front Row

Jeanne M. Mikula, Senior Vice President/ Chief Operating Officer

Laurie B. Cormier, Senior Vice President/ Chief Human Resources & Marketing Officer

SENIOR STAFF

Fitch High School101 Groton Long Point RoadGroton, CT 06340

Killingly High School226 Putnam PikeDayville, CT 06241

HIGH SCHOOL BRANCHES (Limited Access)

CharterOak.org860.446.8085 • 800.962.3237

Federally Insured by NCUA

For more information about Charter Oak Federal Credit Union’s

products and services mentioned in this Annual Report, including rates and fees, please stop by one of

our convenient branches in New London or Windham counties, call 860.446.8085 or 800.962.3237,

or visit CharterOak.org.

Board of Directors

Senior Staff

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