REPORT TD MEMBERS

Thank you for being a valued member of VyStar Credit Union.

Thanks to you, our valued members, 2016 was a record year

for VyStar because your credit union continued its strong financial

performance and steady growth in loans, membership and deposits.

Our net income for 2016 was a record $50.2 million, which is

36.4% greater than planned and 23.5% greater than 2015. Our net

worth ratio was 8.85%, which is considered strong by the National

Credit Union Administration (NCUA). Credit unions must have at

least 7.00% net worth to be considered well-capitalized.

One of VyStar's objectives is to always be a recognized and reliable

borrowing source. During 2016, we disbursed almost $1.5 billion

in loans to our members and business members, helping them

buy autos and homes, purchase business properties and refinance

existing higher-rate mortgages and other loans. In 2016, net loans

to members-including mortgage, automobile, credit card and

business loans-reached $4.4 billion. Total mortgage loans were

$2.2 billion-an increase of 7.93% since 2015-making VyStar

the second-largest mortgage lender by volume in Northeast Florida

according to the Jacksonville Business Journal.

Member growth remained strong in 2016. By the end of the year,

VyStar was serving 545, 155 members with assets of almost $6.6

billion and managed investments of $545.3 million through VyStar

Investment Services.

VyStar successfully expanded into Volusia County by opening new

branches in Ormond Beach and Port Orange, as well as adding six

new standalone ATMs in the county, bringing VyStar's ATM network

to 199 located in 14 counties from Northeast to Central Florida in

2016. VyStar will further expand in Volusia County with a new branch

in Daytona Beach in late 2017. Additionally, VyStar opened new

branches in St. Augustine Beach and the Springfield area of

Jacksonville, bringing our total number of branches to 41. Our

sustained growth has ranked VyStar l 7'h largest among the almost

6,200 credit unions in the nation, based on total assets.

Our successful high school branch program also continued to

progress with branch openings at Clay County's Middleburg High

School and Duval County's First Coast High School, for a total of 11

high school branches across Clay, Duval, Flagler, Nassau, Putnam

and St. Johns counties. We will add two more such branches in Duval

County during 2017 with the addition of branches in Mandarin and

Fletcher high schools. Our goal with the high school program is to help

students gain financial awareness and education and to provide

internship opportunities to students to help them prepare for the

workforce. For the 2016-2017 school year, our high school branch

program provided internships to 132 students. Since 2012, we have

provided Reality Fairs and financial counseling training to almost

23,000 high school students.

VyStar has always been a strong supporter of the communities that

we serve throughout the 22 counties within our field of membership.

Each year, VyStar employees donate money, hold fundraisers and

selflessly give their time to benefit hundreds of worthy programs within

our communities. In 2016, VyStar raised more than $600,000 in

support of the United Way of Northeast Florida, the March of Dimes and

the Leukemia & Lymphoma Society. Since 2011, VyStar has raised over

$500,000 for the Leukemia & Lymphoma Society and was honored to

receive the Impact Award for our support of the fight against blood

cancer. Additionally, VyStar supported more than 260 groups and

fundraising events in Northeast and Central Florida during the year. We

believe it is important to support the communities where our members

and employees live, work and play.

After two years of evaluation and testing, VyStar launched a new

Internet & Mobile Banking system in February 2016. The goal was to

provide members with more online options and security as well as

improved technology and access. Despite careful planning and

testing, a number of our members were greatly inconvenienced during

the conversion process. We apologize for any inconvenience and

frustration members experienced during that time. Fortunately, we

were able to resolve those issues. By the end of 2016, Internet &

Mobile Banking user enrollment dramatically grew to 312,644

members. Of those, 206,831 members use Mobile Banking.

Thank you for helping to make your credit union the success it is

for all our members and the communities we serve. We never forget

that it's your money.

P.E. (Ted) Hewitt

Chairman of the Board President/CEO

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2012 2013 2014 2015 2018

ASSETS

LOANS ­

2012 2013 2014 2015 2018

MEMBERS' DEPOSITS AND GROSS LOANS

2012 2013 2014 2015 2018

NET WORTH

Consolidated Statements of Financial Condition December 31, 2016 and 2015 (Dollars in thousands)

ASSETS Cash and cash equivalents Investments

Ava ilab le-for-sale Other

Loans to members, net Accrued interest receivable Other real estate owned Property and equipment, net National Credit Union Share Insurance Fund deposit Other assets

Total Assets

LIABILITIES AND MEMBERS' EQUITY Liabilities

Accrued expenses and other liabilities Borrowed funds

Total liabilities Members' equity Members' deposits Retained earnings Merged equity Accumulated other comprehensive income Total members' equity

Total Liabilities and Members' Equity

Consolidated Statements of Operations Years Ended December 31, 2016 and 2015

(Dollars in thousands)

Interest income: Interest on loans Interest on investments

Total Interest Income Interest expense:

Interest expense on borrowings Interest expense on members' deposits

Total Interest Expense Loan loss provision

Net Interest Income after Loan Loss Provision Non-interest income:

Other operating income Income from sold loans Non-trading losses Losses from foreclosed real estate Losses from disposal of assets

Total Non-Interest Income Non-Interest Expenses:

Employee compensation and benefits Training, travel and conference expenses Office occupancy expenses Office operations expenses Marketing expenses Loan program expenses Professional and outside services State of Florida assessments Lobbying contributions Miscellaneous operating expenses

Total Non-Interest Expenses Net Income

2016 2015 $724,139 $442,190

1,139,034 1,049,251 47,652 29,769

4,424,086 3,934,365 12,854 11,358 2,103 911

136,411 125,938 46,309 41,545 19,399 17,469

$6,551,987 $5,652,796

$102,472 $68,064 887,905 487,085 990,377 555,149

4,986,011 4,563,456 579,725 529,519

54 (4,180) 4,672

5,561,610 5,097,647 $6,551,987 $5,652,796

$163,574 $150,328 ____11Jl3_9_ _____l_8d§_

185,413 168,691

14,753 14,926

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_____1fil ~ 139,623 123,098

92,242 80,976 658 1,832 (41)

(212) (283)

_____Jlli)_ _____iLllli 92,174 80,951

83,832 75,981 879 769

15,772 14,258 60,979 53,407 4,963 4,812 3,646 3,119 7,778 8,264

528 492 36 35

------1..!Bl_ ------1lZQ_ 163,407

$50,206 $40,642 ~