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  • SEASONS FEDERAL CREDIT UNION

    CONSOLIDATED FINANCIAL STATEMENTS

    SEPTEMBER 30, 2018 AND 2017 (With Independent Auditor’s Report Thereon)

  • SEASONS FEDERAL CREDIT UNION

    TABLE OF CONTENTS

    Page INDEPENDENT AUDITOR’S REPORT .............................................................................................. 1 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Condition ................................................................................. 3 Consolidated Statements of Income ..................................................................................................... 4 Consolidated Statements of Comprehensive Income ........................................................................... 5 Consolidated Statements of Members’ Equity ..................................................................................... 6 Consolidated Statements of Cash Flows .............................................................................................. 7 Notes to the Consolidated Financial Statements .................................................................................. 9

  • Independent Auditor’s Report January 18, 2019 To the Supervisory Committee and Board of Directors of Seasons Federal Credit Union Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Seasons Federal Credit Union and its subsidiary, which comprise the consolidated statements of financial condition as of September 30, 2018 and 2017, and the related consolidated statements of income, comprehensive income, members’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

    12060 S.W. 129th Court, Ste. 201 Miami, Florida 33186-4582

    305.232.8272 doeren.com

    Insight. Oversight. Foresight.®

    Known Internationally as Moore Stephens Doeren Mayhew, P.C. An Independent Firm Associated With Moore Stephens International Limited.

  • To the Supervisory Committee and Board of Directors of Seasons Federal Credit Union

    Page 2 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Seasons Federal Credit Union and its subsidiary, as of September 30, 2018 and 2017, and the results of their operations and their cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. Doeren Mayhew Doeren Mayhew Miami, FL

  • Assets 2018 2017 Cash and cash equivalents $3,879,794 $4,681,283 Interest bearing deposits 249,000 895,000 Investment securities: Available-for-sale 5,448,904 6,135,082 Held-to-maturity 1,799 2,468 Loans held for sale — 1,353,780 Loans to members, net of allowance for loan losses 130,795,796 130,855,586 Accrued interest receivable 430,514 408,758 Property and equipment 4,239,756 4,635,840 Prepaid and other assets 9,737,413 9,491,970 NCUSIF deposit 1,401,064 1,416,021

    Total assets $156,184,040 $159,875,788

    Liabilities and Members' Equity

    Liabilities: Members' shares and savings accounts $136,001,081 $142,857,742 Borrowings 8,953,221 6,000,000 Accrued expenses and other liabilities 1,161,209 963,397

    Total liabilities 146,115,511 149,821,139 Commitments and contingent liabilities Members' equity:

    Regular reserves 2,241,414 2,241,414 Undivided earnings 8,779,715 8,605,691 Equity acquired from business combination 1,033,234 1,033,234 Accumulated other comprehensive loss (1,985,834) (1,825,690)

    Total members' equity 10,068,529 10,054,649

    Total liabilities and members' equity $156,184,040 $159,875,788

    SEASONS FEDERAL CREDIT UNION

    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2018 AND 2017

    See accompanying notes to the consolidated financial statements.

    - 3 -

  • 2018 2017 Interest income:

    Loans to members $6,333,732 $6,687,779 Investments 313,539 284,451

    Total interest income 6,647,271 6,972,230

    Interest expense:

    Members' shares and savings accounts 634,146 585,793 Borrowings 106,061 94,167

    Total interest expense 740,207 679,960

    Net interest income 5,907,064 6,292,270

    Provision for loan losses 863,947 712,395

    Net interest income after provision for loan losses 5,043,117 5,579,875

    Non-interest income:

    Fees and charges 2,019,482 1,778,974 Interchange income 744,331 743,581 Other operating income 324,578 293,643 Gain on sale of loans 169,504 235,710

    Total non-interest income 3,257,895 3,051,908

    Non-interest expenses: Compensation and benefits 3,389,007 3,581,661 Office operations 2,810,628 2,866,239 Office occupancy 827,999 779,468 Loan servicing 550,439 599,517 Other 302,964 434,441 Outside services 245,951 270,219

    Total non-interest expenses 8,126,988 8,531,545

    Net income $174,024 $100,238

    CONSOLIDATED STATEMENTS OF INCOME

    SEASONS FEDERAL CREDIT UNION

    YEARS ENDED SEPTEMBER 30, 2018 AND 2017

    See accompanying notes to the consolidated financial statements.

    - 4 -

  • 2018 2017

    Net income $174,024 $100,238

    Other comprehensive (loss)/income: Available-for-sale investments:

    Net unrealized holding losses on available-for-sale investments (170,867) (90,154)

    Net change in available-for-sale investments (170,867) (90,154)

    Defined benefit pension plan: Net unrealized (losses)/gains on defined benefit pension plan (76,072) 81,973 Amortization of unrecognized net losses from changes

    in actuarial assumptions 86,795 104,671

    Net change in defined benefit pension plan 10,723 186,644

    Other comprehensive (loss)/income (160,144) 96,490

    Comprehensive income $13,880 $196,728

    SEASONS FEDERAL CREDIT UNION

    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED SEPTEMBER 30, 2018 AND 2017

    See accompanying notes to the consolidated financial statements.

    - 5 -

  • Equity Accumulated

    Acquired from Other Regular Undivided Business Comprehensive

    Reserve Earnings Combination Loss Total

    Balance, September 30, 2016 $2,241,414 $8,505,453 $1,033,234 ($1,922,180) $9,857,921

    Net income — 100,238 — — 100,238 Other comprehensive income — — — 96,490 96,490

    Balance, September 30, 2017 2,241,414 8,605,691 1,033,234 (1,825,690) 10,054,649

    Net income — 174,024 — — 174,024 Other comprehensive loss — — — (160,144) (160,144)

    Balance, September 30, 2018 $2,241,414 $8,779,715 $1,033,234 ($1,985,834) $10,068,529

    SEASONS FEDERAL CREDIT UNION

    CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY YEARS ENDED SEPTEMBER 30, 2018 AND 2017

    See accompanying notes to the consolidated financial statements.

    - 6 -

  • 2018 2017 Cash flows from operating activities:

    Net income $174,024 $100,238

    Adjustments to net cash provided from operating activities:

    Provision for loan losses 863,947 712,395 Depreciation and amortization 457,906 476,999 Net amortization and accretion on investments 71,734 79,095 Gain on sale of loans (10,081) (120,389) Capitalization of mortgage servicing rights (159,423) (115,321)

    Changes in assets and liabilities: Prepaid and other assets (75,297) (556,995

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