Dear Shareholders and Friends,

In 2009, Clearinghouse CDFI continued our long established trend of sustained growth and profitability. While financial institutions around us failed at record levels, 2009 marked our 10th consecutive year of profitability. We continue to closely monitor the difficult economic environment and the challenges it presents to our borrowers. We are constantly exploring new opportunities to increase our lending and have an even greater impact in the low-income and distressed communities we serve.

Total loan production in 2009 remained consistent during this unprecedented credit crisis. We funded a total of $83,150,559 to over 80 different borrowers through our core, single family, and New Markets Tax Credit lending. This level was attained in spite of the significant reduction in single family lending brought about by the diminished secondary market for single family housing loans.

Our 2009 pre-tax profit was $2.33 million. For the fifth consecutive year, we paid a dividend to all "Class A" shareholders providing a consistent and reliable return on their equity investment. Once again, the early retirement of some of our debt augmented corporate earnings from operations. We will continue to look for additional debt repayment opportunities in 2010 and beyond.

At year end, our capital ratios were well above the industry average for both CDFIs and regulated financial institutions. Our equity-to-assets ratio was above 17%. In 2009, our average return-on-equity was 14%. The cumulative year-end allowance for loan losses was over $4 million representing 5.81% of total loans. We remain one of the strongest, well capitalized CDFIs in the nation.

We are excited about the prominent role CDFIs are playing in the economic recovery of our nation. With the strong support of the US Department of Treasury, CDFI Fund, we are poised to tackle even greater challenges. We are seeking new partnerships that will once again open up secondary markets for single family loans. We are investigating opportunities to make high-impact “green” environmental loans. We will continue to seek loans that create jobs, provide affordable housing, and foster economic growth in the communities we serve.

We wish to thank all of our shareholders and community partners for their strong support in 2009. With the ongoing support of our Board of Directors, committees, and dedicated staff, we will continue to make a meaningful difference in the lives of California residents - one loan at a time.

Sincerely,

Douglas J. Bystry President/CEO	Alan Orechwa Chairman of the Board