TRANSFORMING

2015 Annual Report

Transforming your dollars into more

for our Communityfor our Membersfor our Staff

Our new vision statement

Transforming

generations and communities.

Simply. Personally.

A Vision Statement is an inspiring, clear, and concise statement that reveals the character, beliefs, and core of an organization. It contains the aspirations of internal stakeholders and the hope of those who use the organization towards its purpose. Our new Vision Statement accomplishes this and more, as it is an enduring message that reflects the will of our employees, volunteers, and members.

Make m

e!

Transformations occur when a child takes his first steps, a student gets accepted into college, a young couple gets married, an entrepreneur opens her first business, or a co-worker retires after years on the job. At CFCU, we believe in helping these (and many, many more) transformations happen.

Throughout this Annual Report, you will see examples of CFCU working towards this Vision. Thank you for inspiring us to become more than just a financial institution.

Every

day we t

ransform

your

dollars

into m

ore for o

ur

members

and our

commun

ity. In

this A

nnua

l Rep

ort

we will

guide y

ou thro

ugh t

he tra

nsform

ation

of a dolla

r bill

into a bea

utiful

origami

butterfl

y to re

presen

t this p

rocess.

1

1. Fold the dollar bill in half and then unfold.

Learn the meaning behind each word of our newVision Statement as you follow these origami instructions:

“Transforming”We will change people’s lives for the better.

2015 was a busy and exciting year at CFCU Community Credit Union. We completed numerous strategic projects, met all financial goals, and continued to provide exceptional member service. Through all our efforts, we kept in mind our new Vision Statement: “Transforming generations and

communities. Simply. Personally.”

Transforming…

The member experience was transformed in 2015 through initiatives such as Instant Issue Cards, e-signature capabilities, online account opening, and financial counseling. A new Intranet portal has transformed the employee experience by improving the way employees receive information, search for resources, and communicate with one another, all leading to enhanced service to our members!

generations…

We established new partnerships with SUNY Cortland and Borg Warner in 2015, enabling CFCU employees to interact with and provide education to a broader section of our community. In addition, we awarded over $40,000 in scholarships and community service awards to students representing 12 area high schools.

and communities.

In 2015, CFCU provided financial support to over 75 not-for-profit organizations and employees gave almost 2,400 hours volunteering throughout our communities.

Simply.

As a member-owned, community-based financial institution, we do everything with your best interests in mind. Our core focus is on helping our members and our communities succeed.

Personally.

CFCU is proud of the personal service we deliver to members. In 2015, we created new positions in Human Resources, Business Lending, Branch Operations, and Mortgage Underwriting to provide additional resources for employees, leading to even more individualized support for members.

CFCU is a transformative organization in our community. We look forward to serving you and your family for generations to come. Thank you for your membership and support.

Sincerely,

President’s Report

Lisa WhitakerPresident & CEO

2. Now fold the top left-hand and right-hand corners to the center crease, creating a triangle.

“Generations”Indicates the depth of our commitment to our communities and to our members.

Both will feel the positive impact of our actions and aspirations.

2

“CFCU Community Credit Union has completely transformed my perception of financial institutions. When I was first reached out to by CFCU about refinancing my home, I was very skeptical for sure. Much of that skepticism came from frustrating experiences with my local bank; I tried not once or twice, but four times to talk to someone about my mortgage and was never given the time of day, much less the courtesy of a call back from the numerous messages I had left.  So, with this negative experience in mind, I decided to give it one last skeptical shot.

You can bet I’m thankful I did!

The whole process was surprisingly quick and simple, with CFCU running like a well-oiled machine! The clear communication and personal care that I was given was excellent. Exactly 31 days after this all began, I was paying a much lower interest rate on my mortgage, and was beginning to pay off my other bills with the money I saved on my lower monthly payment.

So thanks again to CFCU for the help and saving me well over $38,000.00 in interest

alone! All in all you guys are themost enjoyable and professional people I have ever had the pleasure of doing business with.

Being in the insurance industry I hear on a daily basis about how long, drawn

out and stressful refinance is, and how my clients will never ever think of doing it again.

I just smile and say… If you have a credit union like I do, you’d do it

several times over!” 

-Maria Guiles CFCU Member

transforming our members

66,295

# of CFC

U mem

bers

3. Flip over. Fold the two sides so that they meet in the center.Then pull the flaps from behind to form two triangles.

3

“AND”Small but important word. Inclusive.

These are exciting times for the CFCU Community Credit Union. We are experiencing tremendous growth across the entire list of products available to our members. We have seen fantastic increases in shares, auto loans, mortgages and many more areas that are important for members. This happens because we have members confident in CFCU.

We have an outstanding team of leaders throughout the organization. The best interest of our members is the forefront of decisions by the Board of Directors, Executive Officers, Vice Presidents and every staff member. They follow a well-planned creative strategic plan, budget and comprehensive policies that provide direction at all levels. This, in turn, leads to actions that are beneficial to members as demonstrated in the many products.

We look forward to the future of the organization. That future involves expanded products, services and opportunities. The Board of Directors looks forward to continuing its responsibility to you as members to make this the best credit union and financial institution. We appreciate your input and ideas. We especially look forward to working with the management team to accomplish our lofty goals.

Sincerely,

Robert A. CreeVice Chair

Brian MitteerChair

Joseph H. DuringTreasurer

Skip HewittSecretary

Katie Foley Amy Wood Gonzalez James W. Place

Dana Decker

Lisa Whitaker

Board of Directors Report

4. Flip the bill back over. Fold the top of the bill down to match where the two flaps meet at the bottom.

4

“Communities”Depending on your point of view, a community can be large or small. We view it as an extension of our families. We will have an impact wherever our members and employees experience community.

“CFCU has been a longtime community supporter through its partnership with United Way of Tompkins County. As a Corporate Cornerstone Partner, CFCU provides leadership and funding for United Way’s operating expenses by

ensuring that 100% of all gifts made by CFCU employees and other donors go directly to the programs and services that need them most. CFCU staff also play an important role as volunteers with United Way, utilizing their collective knowledge to assist

United Way’s administration through service on the Board of Directors, campaign and community investment committees. CFCU’s support of the United Way’s mission begins with organizational and board policy development and moves through resources raised, managed and reinvested in the community.”

TRANSFORMING Our Community

2,500

# of item

s dona

ted to

the

United W

ay Day of C

aring fo

od drive

THE CFCU DOWNTOWN SUMMER CONCERT SERIES

Concertgoers were able to experience community on a whole new level together. Partnering with the Downtown Ithaca Alliance and the United Way of Tompkins County, CFCU was able to give our community the opportunity to experience charity, music, and shared interests in an iconic local atmosphere on the Ithaca Commons.

- The United Way of Tompkins County Community Partner

In exchange for a donation of a non-perishable food item, concertgoers were entered to win an electric guitar signed by all of the bands who played throughout the summer. We had a number of community members who donated at every concert!

The United Way Raffle!

5. Next, fold the top up so that the crease matches the fold line underneath.

5

“Simply”Banking and personal finance are complicated. Caring is not. We strive to know our members on a more intimate level, giving us the ability to provide you with the knowledge you need…

cutting through the clutter.

The role of the Supervisory Committee is to verify that adequate internal controls are in place to safeguard member assets, monitor compliance with applicable laws and regulations and ensure the fiscal integrity of CFCU. An internal audit staff fulfills these responsibilities and reports to the Supervisory Committee. In addition, the Committee engages independent auditors to perform an annual audit of CFCU.

The Supervisory Committee meets quarterly to review the work of the internal audit staff. Zenaida Choy prepares an annual audit plan at the start of each year that is approved by the Committee. Comprehensive reports are prepared for each audit conducted, as well as a quarterly summary report. Written responses addressing any audit findings are subsequently provided by the responsible party for each internal audit conducted. At the end of 2015, there were only five audit findings from audits completed in November and December that were pending resolution. All audit findings reported from performed internal and external audits during 2015 were closed-implemented or a resolution were in progress at the end of 2015.

The 2015 internal audit plan included 60 audits – 29 of which were outsourced, and 31 performed by internal audit staff. Of the 60 audits in the 2015 audit plan, 55 were completed and five were in process or carried over to the 2016 audit plan. The in process and carried over audits are all outsourced audits. Outsourcing certain audits has been recommended by the New York State Department of Financial Services and NCUA regulatory examiners. The practice of alternating audits from internal to external provides an increased level of quality control, provides for opportunity for industry standards to be included in future audits, and validates internal auditing practices and procedures. External audit firms are carefully selected to ensure the highest possible expertise on the auditable entity.

During 2015, the internal audit department successfully implemented new audit software (TeamMate) that has allowed for greater efficiency in the internal audit department, including electronic workpapers and documentation. The Supervisory Committee was highly satisfied with the completion rate of the internal audit plan, the responsiveness to new audit requirements, as well as management’s timely response to any audit findings. Our 2016 audit plan currently includes 43 audits, with 18 outsourced (including the five carried over from 2015). Our goal is to avoid the practice of carrying over planned and unplanned audits from year to year.

The Supervisory Committee is proud to report that our independent audit firm, CliftonLarsonAllen, has issued an unmodified (clean) opinion report on CFCU’s consolidated financial statements as of, and for the years ended, December 31, 2015 and 2014. The full report is available at the CFCU’s offices for inspection. As in previous years, members of the Supervisory Committee met with our independent auditors and the New York State and NCUA regulatory examiners in 2015. Again, findings were minimal and management was quick to address and resolve any issues or concerns. Based on the examiners’ reports, internal audit reports, and the positive results received from our independent auditors, the Supervisory Committee remains confident that CFCU maintains adequate controls, complies with applicable laws and regulations, and is well managed and fiscally sound. I would also like to remind members that the CFCU code of ethics requires that any member who suspects there has been a violation of Corporate Policy, laws or regulations, or general business ethics should report their suspicion. You may contact the Supervisory Committee in writing or by email. All mail is strictly confidential. You do not have to identify yourself, but it is important that you provide enough information and/or documentation to allow the Committee to investigate your concern. For further information, please go to Supervisory Committee information on the CFCU website at www.mycfcu.com/about.

Many thanks go to our internal auditors, Zenaida Choy, Julie Burnham, and Kim VanDonsel for their outstanding work. The requirements for internal audit become more demanding every year. The Supervisory Committee is grateful to have such dedicated, competent people working with us. Thanks to the management of CFCU for responding promptly to our many questions and functioning in such a responsible, knowledgeable manner. Sincerely,

SUpervisory Committee Report

Blixy TaetzschChair

Dan BrownSecretary

Susan T. Schattschneider

Internal Audit Staff:Zenaida Choy, Assistant Vice President of Internal Audit

Julie Burnham, Internal AuditorKim VanDonsel, Junior Auditor

Independent Audit Firm:CliftonLarsonAllen, LLP

6. Flip the bill over. Tuck the middle of the left wing under itself to form a crease, creating a smaller lower wing. Repeat on the right side.

6

“Personally”We are not a bank. We are a credit union. At our core is a passion

to help members. If we can positively impact you as an individual, which impactsyour family and your community, then we have accomplished our goal.

crease

Transforming our staff“Working at CFCU has transformed my life for the better. Before I started working here two years ago my days were spent wearing Birkenstocks, covered in dirt, planting flowers, living paycheck to paycheck. But as much as I felt comfortable in that environment, once I had my son, it was no longer a sustainable way to support my family. When I started off as a teller I lacked confidence, felt socially awkward and out of place, so at first I couldn’t believe when members and colleagues alike would trust me to help them. When I was offered the opportunity to work in the administrative offices in the Asset Recovery Department, I almost turned down the position because I didn’t think that I could work in an office setting. I was afraid that I would be too anxious and didn’t know how I should act; what if I said the wrong thing? what if I laughed too loudly? Fortunately I ventured beyond my comfort zone and took a chance, because I couldn’t be happier with my job. I have gained confidence, conversation skills, knowledge, and a sense of professionalism.

I feel like I have grown up with CFCU.

Developing my career at CFCU has offered me stability. I no longer have to worry about covering the basics for my family like health insurance and car payments. Now I get to help members who are on the edge, who are where I used to be. I always say “I want to keep your car in your driveway,” because I can relate to members who have fallen on hard times because I’ve been there. I remember having to choose between rent or my car payment or birthday presents for my kid. Now I am happy to have the opportunity to help our members who are in that situation now.

I had my second child this past year, and while there was a part of me that thought about staying home with her indefinitely, I knew that I needed to come back, because my priorities have changed from just my family, to bettering myself and the lives of the members that I help every day as well. My job has given me purpose beyond myself.

CFCU changed my life because they took a chance; every single person from day one has had faith in me. The team at CFCU is unique, we all work together to never put down a fellow employee but only to pick them up. I have had some pretty life changing events in the past two years, from my grandmother passing, to my best friend passing, a difficult pregnancy, to the birth of my

beautiful Ozzie Mae. Throughout it all, the love and support from my CFCU family kept me afloat… the cards from Lisa and HR are still on my desk, just to remind me that I am not just a number and they honestly care.

I no longer consider this my job, this is my career and there wouldn’t be a better place I’d rather call my home away from home. And even though some days it still surprises me to see business cards with my name on them on my desk, I know that I have come a long way and look forward to further

developing myself and my career with the help of CFCU.”

-Kaelee Rydzik CFCU employee and member

27# of C

FCU “J

eans Days”

whe

re sta

ff were

able to dona

te $3

to a loca

l cha

rity in

order to w

ear je

ans to w

ork.

CFCU m

atches

thes

e dona

tions,

and in

2015 alone

,

Jeans

Day dona

tions

totaled $17

,300.

Kaelee and Family

7. Pinch wings together to create the “body”of the butterfly.

7

Treasurer’s ReportAs I prepared this report, I could not help but reflect on the significant accomplishments and growth of our Credit Union over the past several years. That growth is a direct result of the efforts put forth by the Senior Management and staff of your Credit Union. Their knowledge and dedication has helped us achieve levels of customer service and profitability that bring value to you, our members, and stability to the Credit Union, as a whole.

2015 was another profitable year for the Credit Union. While it did not set a record for annual earnings, the 2015 results were well within our budget forecasts and management’s long-range plans. We continue to be a leader in most areas of lending in our communities and our investment in technology and personnel, while significant, has provided our members with high quality service and, at the same time, utilize the latest advancements in technology. We are constantly looking at new ways to provide our services in this technology driven world. Our focus is to provide the best services to you, our members, at a reasonable cost to the Credit Union.

Our annual financial audit, which was conducted by our independent certified public accountants, resulted in an unmodified opinion. This is a testimony to the hard work and dedication of our Board of Directors, the Senior Management team and all the employees of the Credit Union.

I am pleased to tell you the CFCU Community Credit Union is financially sound and well-positioned to provide our members with high quality products and services. It is my privilege to serve as the Treasurer of

the Credit Union. Thank you for your confidence and support of the undertakings we embark upon.

Respectfully submitted,

Joseph H. DuringTreasurer

17,3

46

# of dep

osit acc

ounts o

pened

8. Fold the two sides in half from behind.

8

Financial Report

The condensed consolidated financial statements presented herein do not constitute a complete set. The complete set, including the consolidated statements ofcomprehensive income, changes to members’ equity and cash flows and notes to the consolidated financial statements, is available in the Credit Union’s administrative office.

ASSETSCash and Cash EquivalentsDeposits in Other Financial InstitutionsSecurities - Available-for-SaleOther InvestmentsLoans Held-for-SaleLoans, NetAccrued Interest ReceivablePremises and Equipment, NetNCUSIF DepositOther Assets

TOTAL ASSETS

LIABILITIES AND MEMBERS’ EQUITY

LIABILITIESMembers’ Share and Savings AccountsAccrued Expenses and Other Liabilities TOTAL LIABILITIES

MEMBERS’ EQUITY Regular ReservesUndivided EarningsAccumulated Other Comprehensive Income (Loss) TOTAL MEMBERS’ EQUITY

TOTAL LIABILITIES AND MEMBERS’ EQUITY

INTEREST INCOMELoansSecurities, Interest Bearing Deposits and Cash Equivalents TOTAL INTEREST INCOME

INTEREST EXPENSEMembers’ Share and Savings Accounts NET INTEREST INCOME

PROVISION FOR LOAN LOSSES NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

NON-INTEREST INCOMEService Charges and FeesOther Non-Interest IncomeNet Gain on Sale of LoansNet Gain on Sale of Securities TOTAL NON-INTEREST INCOME

NON-INTEREST EXPENSEGeneral and Administrative: Employee Compensation and Benefits Office Occupancy and Operations Other Operating ExpensesNet Loss on Sale of Assets TOTAL NON-INTEREST EXPENSE

NET INCOME

2015$182,699,034

250,000107,553,659

2,350,8961,258,025

658,765,8912,356,2349,488,3267,433,8412,215,341

$974,371,247

$843,820,4044,462,726

848,283,130

15,582,928110,602,400

(97,211)126,088,117

$974,371,247

2015$27,067,198

2,113,18829,180,386

3,322,52825,857,858

2,673,094

23,184,764

8,060,1111,131,711165,640150,749

9,508,211

12,879,9247,654,9044,802,411

39,07025,376,309

$7,316,666

2014$138,808,787

-150,700,592

2,319,495 -

597,650,2462,206,0388,289,859 7,196,0171,878,990

$909,050,024

$786,494,685 3,387,833

789,882,518

15,582,928103,285,734

298,844119,167,506

$909,050,024

2014 $24,349,340

2,363,57026,712,910

3,399,615 23,313,295

921,671

22,391,624

7,166,2831,066,136

51,250 3,432

8,287,101

11,036,6387,027,4074,137,093

55,304 22,256,442

$8,422,283

CFCU COMMUNITY CREDIT UNION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 2015 AND 2014

CFCU COMMUNITY CREDIT UNION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2015 AND 2014

9. Then fold them back out again at the wings to give your butterfly a 3-D shape.

9

Strategic Planning is the process of developing a long-range plan for the direction and goals of an organization. The CFCU Strategic Plan includes 10 Strategic Goals that provide a roadmap for the continued success of the Credit Union. We ensure any new initiatives meet objectives toward one or more of these Goals, and make all decisions with the Strategic Goals in mind.

One of these Goals is to revise our Vision Statement and Mission Statement, and to develop a set of Values. As noted earlier in this Report, a Vision Statement should be inspirational, clear, and concise, with a long-term view of why CFCU exists. A Mission Statement is a more grounded statement that clarifies what makes CFCU unique and answers the questions of “What do we do?”; “How do we do it?”; and “For whom?” Values are shared beliefs among stakeholders in an organization which help shape actions and establish priorities.

Developing these statements is a complex process, as we want to ensure that they

are sustainable over many years and incorporate perspectives of employees, volunteers, members, and the community at

large. The process began in late 2014 with a Vision Statement brainstorming session among CFCU supervisors and project managers. Various potential statements were discussed over the course of several meetings, and the final version was approved by the Board of Directors and presented at the introduction to this Report:

Transforming generations and communities.

Simply. Personally.

Our next steps are to revise our Mission Statement and develop a set of

Values. We will provide ways for members to be involved in this process and look forward to hearing your ideas. Thank you for providing the opportunity to transform your experience with a financial institution!

Strategic Report

Board Development

Deepen Member Relations and Cross Sell

Embrace Technology

Emphasis on Community Involvement

Employee Engagement

Establish Vision, Mission, Values

Facilities Master Planning

Maintain Financial Health

Market Expansion and Retention

Organizational Effectiveness & Efficiency

10 Strategic Goals

Approved by Board of Directorsin alphabetical order

10. Congratulations! You have transformed an ordinary dollarbill into more, which is what we strive towards every day.

CFCU Vice PresidentsPaul Cognetta

VP Human ResourcesJennifer Carlton-Cooper

VP TechnologyEileen Covey

VP Electronic ServicesMichael D’Angelo

VP Member ExperienceJeff Dobbin

VP Business Lending

Mark HillegasVP Consumer Lending

Eliza MulhernVP Compliance &

Associate General Counsel

Jim StrubleVP Sales and Service

Sarah TomeiVP Finance & Controller

Christine WernerVP Mortgage Operations

10

CFCU Executive Team

Lisa WhitakerPresident & CEO

Paul KirkChief Financial Officer

Cathy BensonChief Lending Officer

William CraneChief Administration Officer

General Counsel

Beth PutnamChief Retail Officer

Eliza MulhernVP Compliance &

Associate General Counsel

Rebecca RobertsPrincipal of Strategic Initiatives

Mallorie DavidExecutive Assistant

2016

Look

ing

forw

ard

to

Make this scene yourself! Visit mycfcu.com/transform for instructions.