Annual General Meeting 2017

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1 Annual General Meeting 2017

2 Annual General Meeting 2017 Our Mission, Our Vision 2 Board of Directors 3 ECU Financial Information Centers 4 Board of Director Nominees 5 Board of Directors Report 8 CEO Report 10 Credit Manager Report for 2016/ Fiscal Year 2017 Audit Committee Report 13 Statement of Financial Position ( ) 15 Income and Retained Earnings ( ) 16 Please note, a full copy of the credit union s audited financial statements is available through your branch.

3 Our Mission The purpose of the Education Credit Union shall be to maximize member benefits through cost effective financial services consistent with co-operative principles, applicable legislation and prudent management. Our Vision To be an innovative, caring and financially stable co-operative that provides a full range of financial services to the local education community and beyond. 2

4 Board of Directors Amber Aird-Williams, MBA, CPA, CMA (Controller, AirBoss Rubber Compounding) Alyson Conrad, CPA, CA (Manager of Regulatory Affairs, Waterloo North Hydro) Catherine Hale, CAP-OM - Chair (Executive Assistant to the President, Waterloo North Hydro) Zoran Hristov (Quality Manager, AirBoss Rubber Compounding) John Lamberink, ACCUD - Vice Chair (Owner, Aquality Irrigation & Illumination) James McCormack (Retired, Past Vice-President of Elementary Teachers Federation of Ontario) Savio Wong (Retired Teacher, Waterloo Oxford District Secondary School) 3

5 ECU Financial Information Centers Waterloo Hagey Blvd. Waterloo, ON N2L 6R Kitchener 6 51 Ardelt Avenue Kitchener, ON N2C 2S Cambridge 27 Water Street North Cambridge, ON N1R 3B ECU Wealth Management For more info, please us at info@ ecusolutions.com 4

6 Board of Director Nominees Alyson Conrad, CPA, CA Alyson Conrad, CPA, CA is currently the Manager of Finance and Regulatory Affairs at Waterloo North Hydro. In this role, Alyson deals with operation in a regulated environment on a daily basis. This has helped Alyson understand and offer assistance with the ongoing regulatory pressures facing the ECU. Also, Alyson manages all of the financial transactions for the Utility. Additionally, Alyson spent several years in the public accounting industry providing audits and other professional engagements to a wide variety of businesses and organizations. Her extensive knowledge of audits, financial statements and risk analysis has allowed Alyson to provide useful contributions to the Audit and ERM Committees, as well as, at the Board level when dealing with financial performance. Alyson is also passionate about education. Although not an educator by profession, Alyson spends a substantial portion of her spare time facilitating and marking for Chartered Professional Accountant (CPA) students. She feels this is a way that she can give back to her profession and to the community. Alyson believes that the ECU can strive in this competitive market by providing exceptional service to its members by sharing her experience and passion to the ECU Board of Directors. 5

7 6 Zoran Hristov As a senior manager in a local business, with a wife who is employed by the WRDSB, I would be honoured to be able to represent the interests of the members of Educational Credit Union. My knowledge of business systems, my audit experience, and my leadership skills developed leading multi-disciplined teams will benefit the membership of ECU. As a member of the Board of Directors I promise to make sure that the Management of ECU keeps its members interests at the forefront, while ensuring that all governmental regulations are effectively met. I look forward to continuing to serve the best interests of the ECU membership. Paul Martinello My name is Paul J. Martinello and presently I am the Vice President, Information Technology Services for Energy+ Inc., the local electrical provider for the City of Cambridge, Township of North Dumfries and the County of Brant. I am seeking a director position at Education Credit Union in order to help provide oversight and governance leadership for the credit union. I am currently a member of the Quality Committee for Cambridge Memorial Hospital, which has provided me with deeper insight into the Ontario health care system as well as the importance of quality at the hospital and how that impacts the people/patients that the hospital serves. I am a Board member of the Utility Standards Forum (USF), a not-for-profit organization that provides guidance, education and develops standards for Engineering and Information Technology services for USF members that serve in Ontario s electrical distributor organizations. The hospital and USF positions are voluntary positions with the goal of serving the greater good of the hospital and the electrical utility business. I had twelve plus years of service in the credit union system as the Director and then

8 Manager of Web Services and Systems Development at Credit Union Central of Ontario (CUCO) and then the organization that was formed by the merger of CUCO and Credit Union Central of British Columbia (CUCBC), Central 1. When I worked at CUCO and then Central 1, my role was to support the back office technology and thus operations of member credit unions as I was responsible for all key Information Technology services provided by the Central to its member credit unions. I gained knowledge of the credit union system not only through my position, but also due to my friendships with credit union staff and through my workmates at CUCO and Central 1. Ruth Cruikshank I have working knowledge and experience in financial services, with nine years in commercial banking after completing my MBA. Subsequently my academic training and experience was in the field of in business strategy. I earned my PhD in Strategic Management (York University), and recently retired after 18 years as a professor of business at Wilfrid Laurier University. At Laurier I worked with students and companies across a wide spectrum of industries, addressing a wide range of strategic problems and decisions. I also have expertise in the field of corporate governance and most recently have been working with for profit and non profit organizations in both governance and strategy. Changes in the marketplace create challenges ahead for ECU that will require Board leadership as we evolve and/or transform our business model and organization. I hope to contribute on the Board by asking hard questions, doing the research, listening to members, staff and stakeholders, and thinking boldly about the future. The ECU has history of significant service to members and community and I look forward to working to ensure this continues. 7

9 2017 ECU Board Report On behalf of the Board of Directors, I would like to once again begin by thanking the members of the Education Credit Union (ECU) for your continued participation in our financial cooperative. As originally communicated in last year s Board Report, your ECU Board continues to adhere to strong financial principles and values which ensure the future success of our credit union. Composed of dedicated volunteers, the Board represents the voice of the membership. These volunteers bring with them many talents and much wisdom from a variety of professions and disciplines. The strength of the Board was enhanced this last year with Board members undertaking development courses, attending conferences and forums. As much as the Board would like to take credit for the success of ECU s preceding year, our achievements were accomplished through the dedication and the day-to-day hard work of the CEO and the Staff of the Education Credit Union. This last year saw an empowered Key Leadership Team engaged with the goal of putting the right people, in the right places, with the right backgrounds, to allow for growth and to adapt to changes. This team has brought about new out of the box thinking, particularly as it relates to technology, new ideas, and better methods to meet new challenges. Of note, 2017 saw the highest dollar amount of lending in ECU s history. The provincial regulatory body had laudatory comments about the direction taken by ECU, and continued 8

10 progress in a positive direction was made with the appointment of new internal and external auditors. Even with the many risks facing financial institutions, particularly the spectre of threats against cybersecurity, the ECU Board, the Board sub-committees, and Management proactively worked this year to identify, mitigate, contain and eliminate - where possible - these risks. ECU is fortunate to have as its core bond the education sector. This core bond has provided financial stability and resiliency to the changes of a fickle economy. These positive attributes will bode well for the path forward in In closing, thank you to the Board Members for their time, commitment, and dedication in guiding the Credit Union on a sound and steady path. Thank you to our CEO and the Staff of the Education Credit Union for concluding another solid year. And finally, thank you to our members for entrusting the Credit Union with your savings and investments, and for allowing us to help you to achieve your financial success. Cathy Hale, Chair of the Board John Lamberlink, Vice-Chair of the Board 9

11 CEO Report, November Last year we stood before the membership and Wow! was the expression we used to describe the opportunities that existed. It is my pleasure to report to you, our member owners, that we had a fantastic year with a 5.0% growth in assets, 7.6% growth in loans and mortgages, 3.0% growth in member equity and a 44% increase in operating income. Yes, it was certainly a year that we could honestly say Wow! We try very hard to earn your business and we will continue to do so. Please spread the word as you are our best ambassadors. Last year Canada, and Ontario in particular, experienced real estate activity and pricing that was historic. The housing price boom rippled from Toronto outward to the KWC region and beyond. As the ripple subsided, housing prices and sales returned to more normal levels late in In the past six months, governments introduced several measures to cool the white-hot housing market. Did they do too much or too little? Time will tell and we will continue to work hard to earn your business and attract new members. Canadians are well known for talking about the weather. In my opinion, conversations about change have become a common topic. Every industry from retail, financial services, manufacturing, accommodations and technology has experienced a pace of change that can be overwhelming. Your credit union has been working hard, not only to deal with change, but to prepare and take advantage of it to better serve you. I am happy to announce that members now have the option of using their credit union debit card to purchase products 10

online through Interac Online. Early in 2018 we will be issuing new debit cards to all members that will have the tap option available at participating retailers.

12 online through Interac Online. Early in 2018 we will be issuing new debit cards to all members that will have the tap option available at participating retailers. In January 2018 we will be able to offer members a new credit card product offering. Other digital products and services are planned for later in the year. I want to thank the Board of Directors and staff for all the support that they have provided throughout this past year. Without them we could not have achieved such wonderful results. Finally, I want to thank our members, both new and long-term as we exist solely to serve you, our member owners. Gary Renouf, CEO 11

13 Credit Manager Report for 2016/2017 During this past fiscal year, your Credit Union advanced 394 loans for $5,520,390 and 340 mortgages for $60,663,726 totalling $66,184,116. Both amounts mark significant increases from the previous year (+60% and +92%), highlighting comments from last year s AGM relating to encouraging indicators with important contributions from both existing staff as well as new team members! Our book of lending assets increased from $157,057,485 to $168,952,861, up 7.6% with the strong mortgage activity illustrating your Credit Union s attempts to offer appealing interest rates in a very competitive mortgage market, as well as a very successful MERITLine TM (home-equity-line-of-credit) campaign. While our mortgage book continues to grow, like most financial institutions we have noted a reduced demand for personal loans, partially offset by slow but steady growth from our new ECU Personal Line of Credit. Our credit losses in 2016/2017 total $68,366, which is 30% lower than the previous fiscal year. This past fiscal year also saw recoveries from previous losses of $20,191. Your credit union has responded to member requests resulting in strong lending growth, although primarily in the lower risk and return area of secured mortgage lending. We look forward to maintaining this momentum as we continue to serve you, our members, in assisting with your borrowing needs! 12

14 Fiscal Year 2017 Audit Committee Report The Audit Committee operates pursuant to Section 125 of the Credit Unions and Caisses Populaires Act, The Education Credit Union s committee consists of a minimum of three directors. For , the Audit Committee consisted of three directors - Alyson Conrad CPA, CA Chair, Rudy Fischer, CPA, CMA, and Cathy Hale. The committee is required to meet at least quarterly and, during the fiscal year of , met 10 times. The Audit Committee has reviewed the policies and procedures governing the way in which it meets the requirements under the Credit Union Act and regulations, concerning liquidity, capital management, enterprise risk management, operational risk and structural risk, and have found them to be within our established guidelines. We have engaged and met with a new internal auditor and have overseen the internal audits that were conducted in the year. We also engaged a new external auditor. The committee met with the external auditor to discuss their outline for the year-end audit and again after the completion of the audit. There were no significant recommendations requiring implementation or completion previously made by the committee to report. The committee is satisfied with the results and reported its findings to the Board. 13

15 The Audit Committee is pleased to report to the members of the credit union that ECU is functioning within the requirements of the Act and has fulfilled its annual mandate. The committee receives full co-operation and support from management to enable it to play an effective role in ensuring the quality of financial reporting to the members and enhancing the overall control structure of the credit union. Respectfully submitted by the Audit Committee, Alyson Conrad, CPA, CA, Audit Chair 14

16 STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, $ $ ASSETS Cash and Bank 6,739,376 5,574,821 Investments 12,472,684 16,409,626 Loans to Members 168,952, ,057,485 Accounts Receivable - 5,204 Prepaid Expenses 41,552 12,423 Income Taxes Recoverable 12,631 - Property, plant and equipment 1,746,328 1,808,539 Deferred income taxes 40,019 28,461 TOTAL ASSETS 190,005, ,896,559 LIABILITIES Member deposits 179,093, ,380,962 Accounts payable and accrued liabilities 211, ,297 Members share capital 46,425 46,495 Income taxes payable - 6,652 TOTAL LIABILITIES 179,351, ,556,406 MEMBERS EQUITY Members share capital 4,221,225 4,096,465 Undivided Earnings 6,432,324 6,243,688 TOTAL MEMBERS EQUITY 10,653,549 10,340,153 TOTAL LIABILITIES & MEMBERS EQUITY 190,005, ,896,559 15

17 STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED SEPTEMBER 30, $ $ INTEREST INCOME Interest Revenue 5,592,983 5,878,137 Interest Expense 2,303,382 2,505,445 Interest Margin 3,289,601 3,372,692 Other Income 1,025, ,652 Income Before Operating Expenses 4,314,702 4,248,344 OPERATING EXPENSES Employee Salaries and benefits 1,955,118 1,979,851 Data Processing 491, ,303 Administration 659, ,482 Member deposit insurance 239, ,484 Collection and bad debts 12,409 (10,000) Occupancy 292, ,693 Staff and director expenses 111,952 95,882 Depreciation 220, ,357 Total Operating Expenses 3,982,993 4,019,052 Operating Income 331, ,292 Gain on CUCO Cooperative Association Shares - 167,105 Income before income taxes 331, ,397 Income taxes - current 48,585 8,488 Income taxes - deferred (11,558) 602 Net Income 294, ,307 16

2016 ANNUAL REPORT. Federally Insured by NCUA

2016 ANNUAL REPORT. Federally Insured by NCUA 2016 ANNUAL REPORT Federally Insured by NCUA OUR MISSION is to promote thrift among members by affording them the opportunity to accumulate their savings, and to create for them a source of credit for