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ANNUAL REPORT 2016
FIRST FINANCIAL INSTITUTION TO PROVIDE LOANS BASED ON THE BORROWER’S CHARACTER
FIRST PAYROLL DEDUCTION SERVICE FOR DEPOSITS AND LOAN PAYMENTS
FIRST DEBIT CARD SERVICE
FIRST TO LOAN TO WOMEN IN THEIR OWN NAME
FI R ST
O P EN
FIRST RESIDENTIAL MORTGAGE REPAYABLE WITH NO PENALTY
FIRST PERSONAL LINE OF CREDIT
TABLE OF CONTENTS
ANNUAL REPORT 2016
Mission and Vision Statements
Report from the Board Chair, President and CEO
Report of the Audit Committee
Five Year Financial History
Report of the Independent Auditor on the Summarized Financial Statements
Statement of Comprehensive Income
Statement of Changes in Members’ Equity
Statement of Financial Position
Our Involvement in the Community
OUR MISSION We serve our member owners as a proud and socially responsible financial services co-operative.
OUR VISION Achieve growth, attract youth and reward our member owners with shared profits.
These values will guide our actions and decisions as we fulfill our commitments to our member owners, employees and communities.
PEOPLE Recognizing that both knowledgeable employees and loyal
member-owners are the building blocks of our success.
INTEGRITY Demonstrating high ethical standards in order to maintain your trust.
INNOVATION Capturing the future with creative solutions.
Guaranteeing that you come first.
PERFORMANCE Sustaining profitable growth in our communities.
Differentiation through profit sharing.
MISSION & VISION S T AT E M E N T S
In a year of persistent corporate scandals affecting our environment, the banking sector, and other industries, it is comforting to know that the Strength of Ownership at Your Credit Union is always anchored to the seven Co-operative Principles. By aligning our operations with these principles, we have wrapped up another year of service excellence, membership growth and continuous care for our communities.
We proudly continue to improve the overall banking convenience at Your Credit Union:
• five branches plus a kiosk • 25% increase in staff • expanded business hours • an award winning mobile banking app
The result is asset growth of almost 6% and we welcomed 686 new member-owners. At the same time, these investments have increased our operating expenses and temporarily reduced our profitability. As with any good investment, we are expecting a healthy yield over the next several years.
Your Credit Union will continue to build our communities with direct employment opportunities and indirect job creation through our commercial services. We look to our membership, new and existing, to support our local ambitions by increasing their volume of business with us, taking advantage of our competitive service offering, and making us their primary banking partner.
We are now entering the second year of our three-year strategic plan, which has a number of objectives and goals. There are two metrics in particular that dominate the board of director’s focus:
• asset growth • membership growth.
Our vision is to build on Your Credit Union’s leadership strength in Cornwall and Ottawa by growing our base and expanding our reach in our communities:
• Cornwall East • Glebe • Orléans • Cornwall West • Cornwall Community Hospital • Nepean
And we’re only getting started.
REPORT FROM THE BOARD CHAIR, PRESIDENT & CEO ANNUAL REPORT 2016MISSION & VISION S T AT E M E N T S
REPORT FROM THE BOARD CHAIR, PRESIDENT & CEO
We live and work in these communities and as they grow and diversify, YCU will be there. In the coming year you can expect to see more of us in the community, engaging with current and prospective member-owners and exemplifying our commitment of enhancing our communities’ quality of life, environment, education and health.
Your Credit Union continues to be active in the credit union sector throughout the province. We work with fellow leaders and directors and are involved in the legislative changes that are taking place.
Credit Unions across Canada have, for a record ninth consecutive year, been awarded the Ipsos Best Banking Award in 2016. Our highly ethical and values-based approach to banking combined with our efforts to put people first has created a financial co-operative community of which we can be very proud.
We thank you for YOUR loyalty and trust as we share our great story with potential new member-owners across our entire region.
Joel Lalonde President & CEO
Tanya Gracie Chair of the Board of Directors
The Audit Committee of the Board of Directors fulfills the responsibilities of the Audit Committee as set out the Credit Unions and Caisses Populaires Act (Ontario) (the “Act”) and conducts its affairs in accordance with the requirements of the Act and its accompanying regulations. The Audit Committee also fulfills certain other governance duties related to finance and risk management as prescribed by Board policy.
The Audit Committee, comprised of five members of the Board of Directors, held five meetings during the fiscal year ended September 30, 2016. The Committee meets at least quarterly and arranges its agenda so that, on an annual basis, the following duties are performed and appropriate action taken as a result thereof:
• Serve as the principal communication link between the external auditors and the Board of Directors and, in particular, review the terms of engagement and scope of the audit, and review the Credit Union’s annual financial statements prior to Board approval for issuance to the members.
• Obtain reasonable understanding of the significant elements of internal controls that are important to safeguarding the assets of the Credit Union, ensuring the accuracy of financial reports, and ensuring compliance with policies and procedures.
• Serve as the Board’s liaison with the internal auditor and review the internal audit mandate, work plan and reports.
• Review the policies, procedures and controls that relate to legislative compliance, with a particular focus on the requirements for liquidity, capital adequacy and interest rate risk management.
Based on its findings, the Audit Committee issues reports and makes recommendations to the Board of Directors or Senior Management, as appropriate, with respect to the matters outlined above and follows-up to ensure that the recommendations are considered and implemented. During the year, the Audit Committee received full co-operation and support from management to enable it to play an effective role in improving the quality of financial reporting to the Members and enhancing the overall control structure of Your Credit Union.
All significant recommendations made by the Audit Committee have been either implemented or are in the process of being implemented by management. In addition, there are no matters that the Audit Committee believes should be reported to the Members, nor are there any further matters which are required to be disclosed pursuant to the Act or the Regulations thereto.
On behalf of the Committee:
Kelly Storie Chair of the Audit Committee
REPORT OF THE AUDIT COMMITTEE ANNUAL REPORT 2016
FIVE YEAR FINANCIAL HISTORY
SEPTEMBER 30 (000’S) 2012 2013 2014 2015 2016 Statements of Comprehensive Income and Changes in Members’ Equity Interest income $8,209 $8,311 $8,335 $8,275 $8,517 Investment income 452 363 419 347 255 Interest expense (2,775) (2,799) (3,204) (2,948) (2,723) Net interest income 5,886 5,875 5,550 5,674 6,049 Provision for credit losses (102) (248) (590) (391) (361) Other operating income 1,493 1,394 1,612 1,804 1,685 7,277 7,021 6,572 7,087 7,373 Operating expenses (6,698) (6,599) (6,332) (6,117) (6,813) Dividends on investment shares (9) (10) (11) (12) (12) Income before income taxes 570 412 229 958 548 Income taxes (98) (35) 6 (116) (15) Comprehensive income $472 $377 $235 $842 $533 Dividends on investment shares (79) (87) (214) (332) (347) Retained earnings, beginning of year 7,756 8,149 8,439 8,460 8,970 Retained earnings, end of year $8,149 $8,439 $8,460 $8,970 $9,156 Assets Cash and cash equivalents $4,250 $13,783 $22,016 $5,640 $4,790 Investments 16,596 15,695 16,711 16,405 16,874 Income taxes receivable 0 0 0 0 127 Loans to members 177,033 185,200 191,731 202,389 215,228 Property and equipment 5,154 5,554 5,200 5,286 6,065 Other assets 1,089 1,294 1,214 837 770 $204,122 $221,526 $236,872 $230,557 $243,854 Liabilities and Members’ Equity Depo