1003 NW 22nd Court Chiefland • FL • 32626

(352) 490-5700

CHIEFLAND

405 SE 2nd Place Gainesville • FL • 32601

(352) 381-5200

GAINESvILLE MAIN

2516 NW 43rd Street Gainesville • FL • 32606

(352) 378-2125

43rD Street

6305 SW Archer rdGainesville • FL • 32608

(352) 373-9334

ArCHEr roAD

LAKe CItY MAIN1605 West US Hwy 90 Lake City • FL • 32055

(386) 755-4097

14133 W Newberry rd Newberry • FL • 32669

(352) 332-9090

JoNESvILLE

v.A.G. MEDICAL CENtEr1601 SW Archer road

Gainesville • FL • 32608(352) 244-5242

L.C.v.A. MEDICAL CENtEr619 S Marion Avenue Lake City • FL • 32025

(386) 752-7894

14520 NW US Highway 441 Alachua • FL • 32615

(386) 462-3900

ALACHUA

Follow us on Facebook: www.facebook.com/sunstatefcu

6005 SE US Hwy 301, Unit 101Hawthorne • FL • 32640

(352) 381-5301

HAWtHorNE

SunState Federal Credit Union 2016 Annual Report

1

From the Chairman...................... 2 & 3

From the President............................ 4

Supervisory Committee report......... 5

treasurer’s report.............................. 6

Statement of Financial Condition...... 7

Statement of Income and Expense.... 7

Graphs........................................... 8 & 9

Employee recognition............. 10 & 11

Charity of the Month......................... 12

SFCU Alachua County Scramble..... 13

SunState in the Community..... 14 & 15

Around the Branches............... 16 & 17

volunteer of Distinction.....................18

volunteer of Distinction.................... 19

official Family.................................... 20

Management team............................ 21

table of Contents

2

From the Chairman...

201631,642

Number of Members2015

29,983

continued on page 3

The strength of a credit union, any credit union, is driven only to a minor extent by the actions and decisions of its management and staff. Management engineers the plans for a strong cooperative, while staff builds a platform from those plans for a vibrant, stable and solid institution; but the true heart and soul of SunState comes from another source. Please understand, I believe the plans and actions of management and staff are of paramount importance, but they are not the real, core drivers that make a cooperative credit union a true asset from which members and communities gain so much. That true heart, and strength, comes from the membership interacting with and utilizing the credit union day in and day out, year in and year out. SunState Federal Credit Union is a strong credit union - actually one of the strongest anywhere – because you, the members, continue to utilize our services, trust us with your savings, and take your loans from us. As you read through this annual report and see just how strong we are, give yourselves a pat on the back for your part in making SunState Federal Credit Union a not-for-profit financial cooperative each and every one of us can be proud of! I open this year’s annual report by saying that it has been an extreme pleasure to serve you as a volunteer SunState Federal Credit Union Director and Committee Member for more than 20 years. I can think of nothing more honorable and personally fulfilling than volunteering to help lead a not-for-profit financial institution striving to make a difference in the lives of my very own friends and neighbors. I would like to remember here the late Janet Larson, who passed away in September of 2016. Janet, a sitting SunState Volunteer board member at the time of her untimely death, was a friend and a volunteer devoted to SunState and the membership for many years. She has been, and will be for a long time, missed by me and many others. Janet, may you rest in peace.

3

2016$330,124,234

2015$299,607,506

total Shares

John CampenChairman of the Board

From the Chairman... continued from page 2

As for the contents of this report, the numbers and statements speak for themselves. 2016, was another banner year for SunState, and there is no reason to believe things will change as we roll into 2017. Your board, management, and staff are staying the course of honorable, efficient service to the membership and communities we serve. I encourage each and every one of you to continue to be a part of what makes SunState Federal Credit Union members special as individuals and makes SunState Federal Credit Union special as an institution. Continue to participate in your credit union by utilizing our services, asking questions of us, and speaking up when something doesn’t seem right. We, as an institution don’t always get it right, but we always try. Let us know if we aren’t living up to your expectations so we can try harder. I look forward to the future of SunState with anticipation of good things to come, as I know that the credit union is in good hands.

4

2016 12,535

201511,234

Members receivingeStatements

Joseph L. AkinsPresident/CEO

From the President...Price. Convenience. Integrity. Honesty. There are no silver bullets. Slow and steady wins the race. STAY THE COURSE!

Year after year, I sit down to write my notes with a theme in mind for introducing the SunState Federal Credit Union annual report. My first year, it was, “It’s about People”. For 2014, we chose, “Keeping it Local”. And last year, “Growing and Prospering” got the nod. We have chosen as our theme for the 2016 report, “Staying the Course”.

Why Staying the Course? It’s very simple, really. We are still all about people – our members, our staff, and our communities. We are still keeping it local – we are still the primary community credit union serving the residents, businesses, and communities in Alachua, Columbia, Dixie, Gilchrist, and Levy Counties. And, we are still growing and prospering.

Have we had changes? Of course. We have added new systems, processes, products and people. We have leased space with plans to open an office in Hawthorne to fill a dire need for a local financial institution in that community. And, we have grown and prospered.

As you read through the report this year, it will become obvious that you can be as proud of our credit union as our staff, volunteers, and management are.

Our numbers continue to place us among the elite credit unions in the country in terms of financial stability.

Our actions continue to place us among the elite credit unions in the country in terms of service to members, communities, and the ideals of the cooperative credit union movement going back for generations.

Yes, SunState Federal Credit Union is still about people, and we are still keeping it local, and we are still growing and prospering. SunState Federal Credit Union is staying the course!

I thank you for allowing me to continue my service to you as your President/CEO, and I proudly, yet humbly, offer you this 2016 annual report.

From theSupervisory Committee...

5

Louis FrostChairman, Supervisory Committee

2015 2016 $14,527 $14,412

Average Loan Balance

The Supervisory Committee engaged the services of a CPA firm experienced in the auditing of federally chartered credit unions to audit the financial statements and books of SunState Federal Credit Union and to express an opinion therein for the fiscal year ended on June 30, 2016. The auditor stated the financial statements present fairly all material aspects of the financial position of SunState Federal Credit Union as of June 30, 2016, and the results of its operations and cash flows were in conformity with the “Generally Accepted Accounting Principles” accepted in the United States of America. Based on the auditors opinion, the Supervisory Committee advises that SunState Federal Credit Union is in a fiscally sound position and is in conformity with NCUA financial requirements as of June 30, 2016.

6

total Auto Loan Portfolio 2015 2016 $79,488,656 $86,258,781

Patrick Fitzgerald Treasurer

From the Treasurer...

Staying the course leads to financial success! Our members—31,642 strong, including 1,659 net new members in 2016—saw total assets grow 10.4% to $375.6 million and a net income of $4.0 million. Net income is added to the reserves and undivided earnings to support future growth.

Net loans grew by $24.6 million, ending the year at $289.6 million. Our investment portfolio increased $8.2 million. Shares on deposit ended the year at $330,124,234, an increase of $30.5 million compared to the previous year’s growth of $22.4 million.

Interest on loans and investments increased $1,247,262. Dividend rates increased in 2016 and provision for loan losses increased. Non-Interest Income rose $250,336 while expenses dropped $68,707. Net income rose $1,111,532 year-over-year. With the $35.2 million growth in assets we were able to maintain our net worth at 11.26%.

We make it our mission to forge the path to provide all needed financial services for our members, while maintaining our long-term financial stability.

7

2016

8,896

2015

7,166

Members using Mobile App

Members signed up for Bill Payment 2015 2016 3,804 5,687

8

2015 20164,178,155 3,850,203

Nickels Given Back

9 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1980 1990 2000 2010 2014 2015 2016

7,246

14,284

25,612 25,558

28,89729,983

31,642

SunState Federal Credit Union MEMBERS

$-

$50

$100

$150

$200

$250

$300

$350

1980 1990 2000 2010 2014 2015 2016

$16.6

$51.3

$96.5

$235.1

$277.2

$299.6

$330.1

Millions

SunState Federal Credit Union SHARES

Employees with 20 or more years of service

Cassandra Davis 40 years

Dave Andrews21 years

Sharon Detweiler 24 years

Susan Blake 25 years

Regina Alexander 26 years

Barbara Estes 29 years

Julie Grant 31 years

Kathy Colson 35 years

10

Karen Tileston 36 years

Members signed up for Mobile Banking

2015 201611,637 14,691

Devonne Jordan 20 years

Cathy Ratliff 30 years

Robert Hart 24 years

Chuck Hudson 22 years

Employees with 5 or more years of service

11

Name Years of Service (as of 12/31/16)

Lindy Edens 18 yearstoni Pratto-Sapp 18 yearsKeturah Campbell 17 yearsrichard Baldwin 16 yearsJarodanne rentz 16 yearsHugo ochoa 16 yearsChristy Sanders 15 yearsJanis Milton 15 yearsSemerah Berkley 13 yearsSuzanne Friis 13 yearsJordan Hagan 13 yearsJan Pfaff 13 yearsKim Maxwell 12 yearsMia Parrish 11 yearsLeslie Kolacia 11 yearsrachel Mobley 10 yearsJenny Stewart-orris 10 yearsJohn richie 10 yearsBrandi Humphrey 9 yearsKimberly James 9 yearstommy Smith 9 yearsJoe Akins 9 yearsKaren Strom 9 yearsKathy Anderson 9 yearsShaina Lodge 9 yearstiffany Gay 8 yearsAmber Baucom 7 yearsHeather Bennett 7 yearstracy Cowart 7 yearsLin Jones 7 yearsEdwennia Britt 7 yearsChuck Smoak 7 yearstannia Weaver 6 yearsMichael Crane 6 yearsrustyn roper 6 yearsronda Feathers 5 yearsDeborah Adams 5 yearsJeri Anderson 5 years

125Number of employees

40% of SunState’s employees have been with us 5 years or more.

Charity of the Monththis program, via the SunState FCU Facebook page, was designed to promote local charities while providing many of them with sizable monetary donations. the Charity of the Month program generated thousands of dollars in donations during 2016; beneficiaries included...

Carson SpringsBeauty Haven Farm and Equine rescue

Balance 180 Gymnastics and Sports Academyteam Paige

Covenant Pet trustPlenty of Pitbulls

Lake City Humane SocietyBasketball Cop Foundation

Columbia County Public Schools FoundationChristian Service Center of Columbia County

Getalong Dachshund rescueProject Makeover

Gentle Carousel Miniature therapy HorsesHoPE Horses Helping People

voices rising Community Chorus Gainesville Harmony Chorus

Alachua County Humane Society Lake City Humane Society

Paws on Parole Children’s table

Dance Marathon (Children’s Miracle Network) PAWS Pets Are Wonderful Support

Canes on Da Mic Poetry Club You can find the program at Facebook.com/SunStatefcu.

12

2015 201626,320 29,891

Facebook Fans

13

Web Page visits 2015 2016 1,319,542 1,713,388

The 12th Annual SunState Federal Credit Union Alachua County Scramble Championship was held at Ironwood Golf Course in Gainesville on December 3, 2016. A great time was had by all golfers and the 30+ volunteers who attended. With help from sponsors, golfers and volunteers, we are proud to say that over $10,000 was raised for Noah’s Endeavor.

Noah’s Endeavor is a local charity providing inclusive community recreation for children and young adults of all abilities. It offers swimming, bowling, soccer, basketball, paint & play, and dancing. Many participants in Noah’s Endeavor activities are affected by disabilities such as Cerebral Palsy, Autism Spectrum Disorders, Down Syndrome, d e a f n e s s , blindness, and other d e v e l o p m e n t a l disorders.

SunState FCU 12th Annual Scramble Championship

14

teller transactions 2015 2016 481,172 539,361

SunState in the CommunityScarecrow Row - AlachuaFall Festival - Alachua

Lake City Christmas Parade

The Employees Jeans for Charity Drive raised a total of $6,960 in 2016. That amount was split between 3 charities voted on by SunState employees:

Child Advocacy CenterMarch of DimesFisher House

The Payroll Deduction Charity raised a total of $7,732.90 in 2016. That was split between 3 charities chosen by SunState employees:

Children’s Miracle NetworkPeaceful PathsHaven Hospice

15

Mobile Deposits 2015 2016 24,387 37,013

Summer 2016 Coed SunState Kickball Team

ronald McDonald HouseStarting in 2016, we began sending a crew once a quarter to cook dinner for families at the Ronald McDonald House. Our creative chicken dishes, roast and smoked pork, Christy’s homemade Mac and Cheese,

the grilled fresh fish, and fresh fruit salad have been a real hit! Our staff loves participating, as we can see the appreciation in the eyes of the families every time. Team SunState, both as individuals and as groups of

SunState employees, reaches out and volunteers throughout our communities in many ways. That being said, cooking for the families at the Ronald McDonald House is always one of the most rewarding. If

you really want to feel appreciated, reach out in your community and volunteer! The Ronald McDonald House is just one of many, many charities and not-for-profit organizations that can use your help.

16

Around the Branches

2016691,958

Number of Checks Processed

2015720,593

17

2016 1,151

online Loan Applications

2015960

SunState’s Newest Branch

SunState announced in September of 2016 that we signed a lease on an space in the Hawthorne Square Shopping Center. As a community credit union we felt it our duty to fill a significant void for the residents of Hawthorne that was created when their only local financial institution closed its office.

volunteer of Distinction

“WHEREAS, WILLIAM M. KNIGHT, JR., faithfully served for over thirty-six years of his life as a dedicated member of the Board of Directors and Supervisory Committee, during which he promoted the best interests of SUNSTATE FEDERAL CREDIT UNION and its members; and

WHEREAS, WILLIAM M. KNIGHT, JR., served with honorable character and integrity as a volunteer of the Board of Directors for twenty-four years and as Board of Directors Chairman for thirteen years, Board of Directors Vice Chairman for 3 years and as a Supervisory Committee Volunteer for twelve years; and

WHEREAS, WILLIAM M. KNIGHT, JR., faithfully attended board meetings and strategic planning sessions, providing astute leadership and judicious counsel to fellow board members and senior management;

BE IT THEREFORE RESOLVED, that in recognition and sincere appreciation of his devoted and distinguished service to the credit union and the membership, WILLIAM M. KNIGHT, JR., is hereby conferred the position, title, and status of Volunteer of Distinction for SUNSTATE FEDERAL CREDIT UNION; this action taken and recorded in a special meeting of the Board of Directors of SunState Federal Credit Union on the twenty first day of February two thousand seventeen.”

18

John Campen, Chairman Cynthia Brochu, Secretary

volunteer of Distinction

“WHEREAS, JANET E. LARSON, faithfully served for over eleven years of her life as a dedicated member of the Board of Directors, during which she promoted the best interests of SUNSTATE FEDERAL CREDIT UNION and its members; and

WHEREAS, JANET E. LARSON, served with honorable character and integrity as a volunteer of the Board of Directors for eleven years and as its Chairman for five years, and as Secretary of the Board of Directors for five years; and

WHEREAS, JANET E. LARSON, completed all 59 courses in the CUNA Volunteer Achievement Program to further her knowledge of credit union board governance; and

WHEREAS, JANET E. LARSON, faithfully attended board meetings and strategic planning sessions, providing astute leadership and judicious counsel to fellow board members and senior management;

BE IT THEREFORE RESOLVED, that in recognition and sincere appreciation of her devoted and distinguished service to the credit union and the membership, JANET E. LARSON, is hereby conferred the position, title, and status of Volunteer of Distinction for SUNSTATE FEDERAL CREDIT UNION; this action taken and recorded in a special meeting of the Board of Directors of SunState Federal Credit Union on the twenty first day of February two thousand seventeen.”

19John Campen, Chairman Cynthia Brochu, Secretary

George Langley Vice Chairman

John Campen Chairman

David Nicholson Director

Joseph MuellerDirector

John D. Dishong, SrDirector

Janet LarsonSecretary

Calvin DeCourseyDirector

2016 Board of Directors

Patrick Fitzgerald Treasurer

Cynthia S. BrochuDirector

20

Janet E. LarsonMarch 24, 1942 - September 5,2016Janet was a sitting member of the SunState FCU board when she passed. Having served on the board since 2005, and was Board Chair from 2006-2012. Her devotion to the credit union and our community showed in everything she did.

She will be greatly missed.

Management team

Joe Akins - President/CEOSuzanne Friis - Senior Vice President of Operations

Tom Barnard - Senior Vice President of LendingKathy Colson - Senior Vice President of Finance

Robert Hart - Vice President of MarketingRichard Baldwin - Vice President of Human Resources

Chuck Hudson - Director of Information SystemsDaryl Pressley - Director of Branches and Sales

Supervisory CommitteeLouis Frost - Chairman

Annette Johnson - SecretaryTresca Clemmons

William M. Knight, Jr.Bill Conrad (not pictured)

21