ANNUALR E P O R T

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As we reflect on the achievements of the last twelve months, we express our appreciation to you, our over 35,000 loyal members, who support Jax Federal Credit Union. We also thank our associates who are committed to making it easy to handle the financial aspects of your busy lives.

In 2010, the credit union adopted an organic growth strategy that requires core profitability, engaged employees, and high levels of member satisfaction, demonstrated by a strong likelihood to recommend JAXFCU to family and friends. Consequently, the credit union has developed its Strategic Business Plan around these principles, using Member Growth, Product Penetration, and Net Promoter Score (NPS) to gauge Member Satisfaction. The following summarizes the credit union’s performance in these crucial areas:

• Member Growth – JAXFCU saw positive member growth for the sixth consecutive year.

• Product Penetration – Credit cards and auto loans per member rose.

• Net Promoter Score – As of June 2018, JAXFCU’s NPS was 91 which can be compared to the credit union average of 61.3 and the bank average of 35.

The leadership of JAXFCU understands the role our staff has played in achiev-ing the high NPS scores noted above. In late 2017, the credit union completed its second Associate Engagement Survey conducted by DecisionWise, and the results were quite rewarding. Data was collected from 99 participants, across all departments, and locations. Here are some of the findings:

• The overall score is eight points above the DecisionWise benchmark of 74%. Clearly, JAXFCU is viewed by our associates as a great place to work.

• Key strengths include Organizational Care and Manager Effectiveness.

Growing organically remains our focus, and we continue to grow through referrals from you, our loyal members. We appreciate every friend and family member you send our way. Over the past twelve months, JAXFCU could be found on local television and radio stations as we spread the news that any-one who lives, works, learns, or worships in Northeast Florida is eligible to join our credit union. Our associates are active in the communities we serve, volunteering their time, talent, and treasure for local veterans, children, and animals (see page 5).

While I am pleased to report our successes and the improvements made during the past 12 months, I am also saddened because this will be my last Message from the President as I will retire at the end of the calendar year. It has been an incredible twenty-one-year journey during which I have had the opportunity to talk with numerous members, often accepting compliments for the staff and sometimes, responding to a complaint or solving a problem. Through these conversations, I have learned that members’ financial needs are as varied and diverse as the markets we serve and that every member has his / her own story covering the successes and challenges associated

FAREWELL MESSAGE FROM

THE PRESIDENT

Gerri F. SexsionPresident and CEO

JAXFCU EXECUTIVE TEAM

Gerri F. SexsionPresident and CEO

Mary SvobodaChief Operating Officer& Chief Lending Officer

Tamara ByrdChief Financial Officer

Hallie DayChief Human Resources Officer

Angie ColemanChief Marketing Officer

Manish KothariChief Information Systems Officer

Adam McGowanVP of Retail Operations & Sales

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Charles T. McLeod2018 Chairman

OUR VISION

To become our members’ first choice through ad-vocacy, innovation, and service.

OUR MISSION

Jax Federal Credit Union exists to encourage the financial success of our membership.

OUR VALUE PROPOSITION

We take the hassle out of financial services. We make it easy for our members.

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with maneuvering the financial aspects of life. At JAXFCU, we have fostered an environment where we listen to those stories and attempt to fashion solutions based individual needs and circumstances. You are never a number at JAXFCU. It has been an honor and a privilege to serve as the President of your credit union since 1997. It is my sincere hope that during my tenure, JAXFCU has helped you move a little closer to achieving your financial hopes and dreams.

I am grateful for the many dedicated volunteers, past and present, with whom I have worked. Thank-you for the trust you placed in my leadership. Our volunteers always put the interest of the membership first, and they are methodically working to select and onboard the new President & CEO.

Finally, I cannot end my last President’s Report without a special thank you to the Management Team and staff. I am a better person, personally and professionally, for the opportunity of having worked with you. As I move into the next phase of my life’s journey, I have so many memories of our time together. We’ve laughed together and sometimes, cried together. We made it through Y2K, economic slowdowns, the Great Recession, the Real Estate Bubble, and the aftermath of two hurricanes and we did it as a team!

When we tick off the numerous accomplishments of the past 21 years, know that it was our loyal members, volunteers, and staff that have made JAXFCU the successful financial institution it is today.

Sincerely,Gerri F. Sexsion, President and CEO

MESSAGE FROM THE CHAIRMAN

On behalf of the Board of Directors, I want to express gratitude to Ms. Gerri Sexsion, our President and CEO, for her many years of dedication and leadership to Jax Federal Credit Union.

I would also like to provide the membership with an update on our CEO search and replacement plans. The Board of Directors is working closely with a well-respected subject-matter expert in the credit union industry with over 30 years in executive search experience. Our first priority is to establish the framework and timeline for a successful CEO transition. Early projections esti-mate that the search process will range between four to six months.

Ms. Gerri will continue her role as President and CEO in the interim. Our credit union is stable and prepared as we make this transition, with experienced staff in the branches combined with seasoned support teams in the back office. The executives and managers continue to implement the strategic plan that drives JAXFCU forward every day.

Most importantly, we appreciate you, our loyal members, whom we exist to serve to the very best of our abilities. We look forward to introducing our next President and CEO to you in the coming months. Thank you for your loyalty and support!

Charles McLeod, Chairman of the Board

STATEMENT oF FINANCIAL CONDITION

ASSETSAs of

June 30, 2018As of

June 30, 2017

Cash $4,659,588 $3,705,022

Investments:

Available for Sale $27,717,133 $30,506,314

Other $48,382,418 $43,864,950

Loans to Members, Net of Allowance for Loan Losses $290,742,192 $277,259,482

Other Receivables $7,747,956 $9,059,948

Accrued Interest Receivable:

Investments $157,832 $135,225

Loans $679,785 $602,752

Prepaid and Other Assets $2,875,213 $3,723,144

Property and Equipment, Net $7,469,851 $7,866,864

NCUSIF Deposit $3,297,633 $3,184,109

Total Assets $393,729,600 $379,907,810

LIABILITIES

Members’ Share and Savings Accounts $342,837,105 $332,320,230

Accounts Payable $3,975,442 $2,935,334

Interest Payable $95,817 $83,649

Borrowed Funds $3,500,000 $4,000,000

Other Accrued Liabilities $898,432 $861,978

Total Liabilities $351,306,795 $340,201,191

MEMBERS’ EQUITY

Regular Reserves $9,193,682 $9,193,682

Undivided Earnings $33,551,473 $30,575,097

Accumulated Other Comprehensive Income $(322,350) $(62,160)

Total Members’ Equity $42,422,805 $39,706,619

Total Liabilities and Members’ Equity $393,729,600 $379,907,810

+6.8%Increase in Assets and

Member Equity

+5%Increase in

Loans to Members

+3.1%Increase in

Member Deposits

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On behalf of Jax Federal’s Board of Directors, I am pleased to share the Annual Treasurer’s Report with the JAXFCU membership. 2017 was a good year for our credit union. Over the twelve months ending June 30, 2018, Loans to Members increased by $13.5 Million, nearly 5%, and Members’ Deposits increased by $10.5 Million, or 3.1%. Additionally, Members’ Equity increased by $2.7 Million or 6.8%. Finally, the five-year trend for Net Worth, Loans, Deposits, and Assets are positive, showing consistent year-over-year improvement.

We anticipate challenges ahead due to the general economic uncertainties with the interest rate environment and competitive pressures which we are tackling head-on in our strategic planning.

Patrick O’Neill, Treasurer

Patrick O’NeillSecretary/Treasurer

MESSAGE FRoM THE TREASURER

STATEMENT oF INCOME

INTEREST INCOMEAs of

June 30, 2018As of

June 30, 2017

Loans to Members $13,027,892 $11,922,498

Investments $1,114,377 $826,449

Total Interest Income $14,142,269 $12,748,947

INTEREST EXPENSE

Total Interest Expense $1,155,234 $961,492

Net Interest Income $12,987,035 $11,787,456

Provision for Loan Losses $1,181,292 $947,984

Net Interest Income after Provision for Loan Losses $11,805,743 $10,839,471

NON-INTEREST INCOME

Fees and Service Charges $2,012,209 $2,100,317

Miscellaneous Operating Income $3,679,231 $3,518,031

Total Non-Interest Income $5,691,440 $5,618,348

$17,497,183 $16,457,819

NON-INTEREST EXPENSECompensation and Employee Benefits $7,314,982 $7,360,980

Office Operating Costs $3,027,043 $2,965,355

Other Expenses $4,178,783 $3,926,391

Total Non-Interest Expense $14,520,808 $14,252,726

Net Income $2,976,375 $2,205,093

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Joseph W. SharpBoard Member

Charles T. McLeodChairman

2018 BOARD oF DIRECTORS

C. Eugene WorthBoard Member

Donald W. BottinVice Chairman

Christine ConnerBoard Member

Patrick O’NeillSecretary/Treasurer

Mary JonesBoard Member

COMMUNITY INVOLVEMENT

AWARDS & RECOGNITION

ANNUAL SCHOLARSHIP

We awarded a $1,000 Scholarship to JAXFCU

member, Blake Lancaster. He is a Junior Biology

major at UCF in Orlando.

The Jacksonville Business Journal recognized Mary

Svoboda as a 2018 Women of Influence

recipient.

Jax Federal Credit Union was recognized today with the 2018 America Saves Designation of

Savings Excellence for its efforts to encourage members to save money during America Saves

Week, held February 26 through March 3, 2018. The award is

presented each year to financial institutions that succeed in getting

people to open and add to wealth-building accounts.

America Saves Designation of Excellence BadgeJax Federal

Credit Union was one of 17 credit unions, 15 banks, and 5 Military family and financial readiness centers and youth programs

recognized nationally, and the only recipient headquartered in

Northeast Florida.

NEW ACCOUNTIn 2018 Teen Accounts were launched bringing

Savings and Checking ac-counts to teen members age 13 -17. Teen accounts include a debit card and parent/teen access to

Ourly for allowance and budgeting.

Directors EmeritusErnest Webster

Joyce Barnes

Jimmy Hicks

Scott Preacher

“The 2018 Visa Balance Transfer campaign was a huge success. This year $5 was donated to First Coast No More Homeless Pets for each member who “Got Fixed,” totaling over $3,000!”

“Associates and members joined forces to help the Muscular Dystrophy Association at this year’s MDA Walk. Thanks to your contri-butions JAXFCU was able to donate $3,500!”

“In June, a group of associates represented Jax Federal at Field’s Cadillac, where St. Michael’s Soldiers hosted a fundraiser with the Jacksonville Jaguars.”

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MESSAGE FRoM THE

SUPERVISORY COMMITTEE Jax Federal Credit Union’s (JAXFCU) Supervisory Committee is made up of volunteer members who independently evaluate the strength as well as the safety and soundness of JAXFCU’s operations and activities.

The Committee’s primary emphasis is to ensure the following:

• An independent audit is performed annually;

• Account balances of the membership are verified;

• Adequate policies and procedures exist and are complied with to protect the credit union’s resources;

• Governing regulations are properly adhered to; and

• The financial statements accurately reflect JAXFCU’s results of operation.

The Supervisory Committee collaborates with the Director of Internal Audit, the Board of Directors, the President & CEO, and employees of JAXFCU to ensure that the credit union’s assets are safeguarded by upholding poli-cies, procedures, and regulatory requirements. The Supervisory Committee retained the services of Ewart & Associates, CPAs, to perform an audit of JAXFCU’s financial statements. Ewart & Associate’s annual audit of JAXFCU’s financial statements ensures that they represent fairly, in all material respects, the financial position and results of operations of Jax Federal Credit Union in conformity with U.S. Generally Accepted Accounting Principles. The Super-visory Committee has again determined that Jax Federal Credit Union is a strong financial institution. We thank the Board of Directors, management, and staff for their cooperation and commitment to sound financial practices..

The Supervisory Committee welcomes your suggestions, comments, or concerns, and may be contacted by U.S. Mail or by e-mail at the following addresses:

Supervisory Committeec/o Jax Federal Credit UnionP.O. Box 551321Jacksonville, Florida 32255-1321supervisory@jaxfcu.org

Ed TellerChairman

Bruce DickinsonMember

Dan LonghiMember

Joe PutzSecretary

Sylvia LudwigMember

Joan KaneAlternate

2018 SUPERVISORY

CoMMITTEE

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ANNUALR E P O R T

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FEDERALLY INSURED BY THE NCUAWe do business in accordance with the Federal Fair Housing

Law and The Equal Credit Opportunity Act.

904-475-8000www.jaxfcu.org

Find us as “JAXFCU” on Facebook, Twitter, YouTube and Google+

Visit www.jaxfcu.org for maps, our ATM locator tool, and shared branching locations!