Annual Report2017

Growing Strong...One member at a time ,734315,222,

310,000,,000000000300,000,,000

,000,,000,290,000,000000280 000280 ,000,000,270 ,000

260,000,000260 000

2017 was a very successful year for First New York. During the year, we loaned more than $64 million to our members. Our flexible, convenient lending allowed us to make more loans to more members and achieve a loan growth of 10.2%. Our total loan balances have now exceeded $198 million.

We enter our 81st year with financial strength and a strong net worth of 9.58%, an increase from 9.45% in 2016. The NCUA, our regulators, consider a 7.0% net worth ratio to be “well capitalized” indicating that the credit union is financially stable and fulfilling the credit union’s mission for our members.

The success of the loan department centralization in 2016 continued throughout 2017. Our electronic application process, including in-branch video, on-line and phone applications, benefited our members with unprecedented convenience for applications as well as funding of member loans.

One marketing focus during the year was to increase the number of millennial age members. We were able to achieve a 28% increase in the millennial age group, 16-34 years of age. Our prime lending age group, 28-42 years of age, increased by over 19%. A focus on these targeted groups will help us to continue our strong growth into the future.

To further our focus on gaining and retaining borrowing members, in 2017, we embarked on a year-long project to introduce 30-year mortgage products to our membership. The completed project resulted in new product offerings in early 2018.

We continue to improve our facilities to serve our members, and in 2017, we completed the renovation of our Cobleskill office. The headquarters has also been renovated to include a larger area for the Marketing department. The Wall Street FNY community room, opened in 2015, continues to be a popular draw for our members and community organizations in need of a convenient meeting area.

Our electronic services are a staple for our members. As in past years, we have seen continual changes to the technology we offer our membership. We currently use DocuSign, an electronic signature and document exchange service, for over 80% of our loan members. We utilize DocuSign throughout the credit union so that a member can conduct business without visiting a credit union branch, a convenience that every busy member can appreciate.

In 2017, we experienced a 17% increase in the number of checks deposited to the credit union through our mobile, FNY ON-THE-GO, app. These deposits were completed using smartphones, PCs, iPads and other mobile devices. We continue to see increases in our members’ use of internet banking, mobile app banking, text banking and shared branching visits. We have seen a surge of new users of our external funds transfer and people to people (P2P) functionality within internet banking. The credit union is poised to offer new services to be released in the marketplace to ensure convenient and up-to-date electronic access.

The members of the Board of Directors and Supervisory Committee are volunteers. They are to be commended for serving our membership and leading our success by setting the strategic direction of the credit union. Our Associate Director program, established in 2000, has enabled the Board of Directors’ leadership to remain strong when an unexpected vacancy on the board occurs. First New York is owned by our members. The volunteer Board of Directors and associated committee members are focused on providing a return on your membership investment.

We are proud to say your assets are safe with us. First New York continues to receive excellent audit results in all areas including technology, security, internal controls and fiscal management. You, our member, are the focus of what we strive to do every day – Serve you with confidence and integrity.

Thank you for your business and your loyalty to First New York FCU.

Chairman & President’s Message

Charles R. Smith Lucy Gottung Halstead Chairman President/CEO

First New York Federal Credit Union maintained its financial strength in 2017 while continuing to provide a variety of financial services to its members. Protecting our members’ financial assets through sound fiscal management continues to be of the utmost importance. To that end, as of December 31, 2017, the credit union’s net worth ratio continues to be strong at 9.58%.

The credit union continued its steady growth in 2017. Net loans increased by $18.4 million, or 10.2%, thanks to our convenient, flexible and competitive lending philosophy. Total cash and investments ended the year at $96.3 million. Our competitive interest rates on share accounts contributed to growth of $9.5 million, or 3.5%. As a result, total assets increased $11.5 million, or 3.8%, to $315.2 million.

On the income statement, controlled operating expenses and growth in loan balances contributed to the resulting net income of $1.5 million This net income amount represented a return on average assets of 0.48%. The credit union continues to return profits to its members by investing in technology to enhance the member experience and by offering competitively-priced financial products and services.

First New York Federal Credit Union continues to prosper in a very competitive financial services industry. We will continue to strive to provide exemplary member service in a financially safe and sound manner in 2018 and beyond.

The Supervisory Committee of First New York Federal Credit Union is comprised of volunteer members appointed by the Board of Directors and operates independently on your behalf to assure the financial integrity of your credit union.

The committee conducts its annual audit program in accordance with the National Credit Union Administration (NCUA) guidelines. The committee annually engages a certified public accounting firm to conduct an independent audit of the credit union’s financial statements and to issue an opinion thereon. We are pleased to report to you that the certified public accounting firm of UHY LLP was engaged to conduct this audit and issue an opinion on the financial statements as of and for the year ended December 31, 2017. The committee engages The Bonadio Group to conduct internal audits throughout the course of the year. In addition to those audits, the NCUA performs its periodic examination of the credit union.

In the opinion of the Supervisory Committee, the records and affairs of First New York Federal Credit Union are in order.

The committee serves as your representative. Our goal is for all members to receive quality service in an expedient manner, and we are ready to assist you in resolving any credit union problem you may have. Concerns and questions may be directed to:

The Supervisory Committee First New York Federal Credit Union

2 Wall Street Albany, NY 12205

or via e-mail: supervisory1.committee@firstnewyork.org

We welcome and encourage your suggestions and inquiries.

Treasurer’s Report

Supervisory Committee Report

Brian KrawieckiTreasurer

Richard ArthurSupervisory Committee Chairman

Statement of Financial Condition*

December 31, December 31, 2017 2016Assets

Cash and due from banks $ 16,144,380 $ 25,002,592Investments available for sale 51,547,798 54,963,117Deposits in other financial institutions 28,638,800 23,218,300Loans to members, net 197,310,251 179,457,013Accrued interest receivable 642,128 566,859Premises and equipment, net 8,199,513 8,453,907NCUSIF deposit 2,873,290 2,723,728Other assets 9,866,574 9,373,419

Total Assets $ 315,222,734 $ 303,758,935

Liabilities and Members' Equity

Members' share and savings deposits $ 281,101,308 $ 271,610,366Accrued expenses and other liabilities 4,249,629 3,602,600

Total Liabilities 285,350,937 275,212,966

Members' Equity:Regular reserves 3,541,863 3,541,863Undivided earnings 26,655,260 25,161,659Accumulated other comprehensive loss (325,326) (157,553)

Total Members' Equity 29,871,797 28,545,969

Total Liabilities and Members' Equity $ 315,222,734 $ 303,758,935

Statement of Income*

Years ended December 31, 2017 2016Interest income: Interest on loans $ 9,097,240 $ 7,965,836 Interest on investments 1,376,174 1,143,782 Total interest income 10,473,414 9,109,618

Interest expense: Dividends on member share accounts 389,685 389,857 Short-term borrowings 1,030 1 Total interest expense 390,715 389,858

Net interest income 10,082,699 8,719,760

Provision for loan losses 1,290,456 346,390

Net interest income after provision for loan losses 8,792,243 8,373,370

Non-interest income: 4,362,873 4,157,362

Non-interest expense: Compensation and benefits 5,935,625 5,542,521 Office occupancy 1,060,794 1,036,873 Office operations 1,422,691 1,413,094 Professional & outside 2,056,328 2,044,096 Other non-interest expenses 1,201,844 1,210,585 Net (gain)/ loss on disposal of assets (15,767) 5,959 Total non-interest expense 11,661,515 11,253,128

Net Income $ 1,493,601 $ 1,277,604

*Unaudited. A copy of First New York Federal Credit Union’s audited financial statements are available, upon request, by contacting the Marketing Department, 2 Wall Street, Albany, NY 12205.

First OnLineFirst Online is your around-the-clock branch on the internet. Save time and money by banking where and when it’s convenient for you with First OnLine at www.firstnewyork.org.

Free Bill Payment ServiceOur online bill payment and e-bill service is easy and safe. Pay your bills at your convenience in a fraction of the time it takes you now – plus save money on stamps and envelopes.

Mobile BankingAccess your First OnLine account from your mobile device and view account information, transfer funds, pay bills, deposit checks and even apply for a loan! Our free FNY ON-THE-GO app is available in the App Store, Google Play and Amazon.

Text BankingText us and within seconds, you will know your balances. Sign up for Text Banking with your First OnLine account.

e-statementsGet your statement without opening the mail box! E-statements look like your paper statement and have all of the same information. View, save or print them at your convenience.

Instant Issue Visa® Debit CardWith your Visa Debit Card, you can get cash, make purchases, check balances or transfer funds. First New York Visa Debit Cards are surcharge-free at CO-OP and SUM ATMs, as well as at all First New York ATMs.

Online Account OpeningOnline Account Opening allows you to securely open savings, checking, money market savings, and share certificate accounts online, 24/7, from the comfort of your own home or anywhere you have access to the internet.

Live Chat HelpHave a question, but can’t make a call? Use Live Help - our online Live Chat service. Member Service Specialists are available to answer all your questions by online chat. Visit www.firstnewyork.org, click on the Live Help link at the top of our website and ask your question.

Call 24Get immediate telephone access to your accounts using voice command or your telephone keypad! If you are on the go, but need to check your account, Call 24 is the solution! Call 24 offers you an easy and fast way to access information from any telephone, 24 hours a day, 7 days a week.

Free Popmoney®

Popmoney is a person-to-person payment service which allows you to send secure electronic payments to anyone in the U.S. no matter where they bank.

Free Account to Account TransferOur online funds transfer service allows you to electronically transfer funds between your accounts at First New York and other financial institutions. You can transfer funds online anytime, anywhere.

Money ManagementAnalyze your overall financial picture from one location. Money Management is free with any First New York account. View the activity of every account, loan, investment, bill and credit card you have, from First New York and beyond, on one webpage. It’s a new way to think about your money, so you can make more informed financial decisions.

Online Loan ApplicationsNever before has it been so quick and easy to apply for a new loan, track a loan in process, interact with our loan staff or view documents from an old loan. Simply log in at www.firstnewyork.org or apply with the FNY ON-THE-GO app.

Stay connected to your finances with these e-services…

LeadershipBoard of DirectorsCharles R. SmithChairman

Donna MicheleVice Chairman

Brian KrawieckiTreasurer

Ronald Szczepanski, Ph.D.Secretary

Matthew LynchDirector

Timothy SchrammDirector

Kevin VeitchDirector

Erin CoufalAssociate Director

Erin HughesAssociate Director

Director EmeritusRichard Palmerino

Supervisory CommitteeRichard ArthurChairman

James Dunham

Robert Roback, Jr.

Executive OfficersLucy G. HalsteadPresident/CEO

Mark F. JarockiExecutive Vice President

Mark MilaneseChief Information Officer

Senior ManagementJames AlescioVice President/CFO

Michael KrywinskiSenior Vice President of Lending

Christy SmithVice President of Member Services

Carol ValenzaVice President of Marketing & Business Development

ManagementWilliam ChowAssistant Vice President of Commercial Lending

Terri ClasenAssistant Vice President of Human Resources

Gloria J. FrielloAssistant Vice President of Lending Operations

Kelly PauleyAssistant Vice President of Support Services & Operations

Steven SnyderAssistant Vice President of Collections

Rhonda TealAssistant Vice President of Accounting

Left to right: Mark Jarocki, Lucy Halstead, Mark Milanese

Matthew DeMarsFacilities and Purchasing Manager

Michelle HaagManager of Electronic Services

Ann LieberburgTraining Manager

Julia MurrayManager of Core Systems

Andrea ReedManager of Lending Originations

Branch ManagementTina BiancoSaratoga Springs Branch Manager

Philip CraanRotterdam Branch Manager

Brandy HazzardNiskayuna Branch Manager

Linda JefferFloating Branch Manager

Rebecca LapeAlbany Branch Manager

Michelle ManeriFloating Branch Manager

Ronald SchimpfGlenville Branch Manager

Sandra ScofieldCall Center Manager

Gena TillapaughCobleskill Branch Manager

Keep Investing Dollars $avings Program

Full Service BranchesNISKAYUNA1776 Union StreetNiskayuna, NY 12309

COBLESKILL795 East Main StreetCobleskill, NY 12043

GLENVILLE19 Glenridge RoadGlenville, NY 12302

ALBANY818 Central AvenueAlbany, NY 12206

ROTTERDAM1879 Altamont AvenueSchenectady, NY 12303

SARATOGA SPRINGS424 Maple Avenue (Route 9)Saratoga Springs, NY 12866

COLONIE DRIVE-UP SERVICE2 Wall StreetAlbany, NY 12205

CO-OP Shared BranchingWith your account number and a valid photo ID, you can transact your business at over 5,000 branch locations nationwide• Deposits• Withdrawals• Transfers• Balance Inquiries• Statement Printouts

Find a participating CO-OP Shared Branch at www.co-opsharedbranch.org.

High School BranchesPATRIOT BRANCHat Schenectady High School

WARRIOR BRANCHat Mohonasen High School

TARTANS BRANCHat Scotia-Glenville High School

KID$ Elementary School Banking ProgramBradt Primary SchoolBrown SchoolCountry ClassroomCharlton Heights Elementary SchoolDelaware Community Elementary SchoolDuanesburg Elementary SchoolGiffen Memorial Elementary SchoolGolding Middle SchoolHillside Elementary SchoolHowe Elementary SchoolJefferson Elementary SchoolJoseph Henry Elementary SchoolLincoln Community Elementary SchoolMater Christi SchoolMontessori Magnet SchoolNorth Albany AcademyPashley Elementary SchoolPine Hills Elementary SchoolPinewood Intermediate SchoolRadez Elementary SchoolRosa Venerini Early Childhood CenterRyder Elementary SchoolSchoharie Elementary SchoolYates Elementary SchoolZoller Elementary School

www.firstnewyork.org (518) 393-1326 Toll Free (800) 734-7375

Sarah AudiConsumer Loan Expert

Michael LearyMortgage Loan Originator

Erica WroblewskiReal Estate Loan Expert

Michael EinarssonReal Estate Loan Expert

Olivia BishopConsumer Loan Expert

Video Loan Center