RADIUS CREDIT UNION

ANNUAL MEETING

FOR THE YEAR ENDING DECEMBER 31, 2012

WEDNESDAY APRIL 10th, 2013

1. Call to Order 2. Confirmation of Quorum & Notice of Meeting

3. Appointment of Secretary

4. Approval of Agenda

5. Minutes of the 2012 Annual Meeting

6. President and CEO/General Manager Report

7. Sask Central Director Report

8. Auditors Report & Financial Statement

9. Nomination Committee Report:

- Four/3 year terms

10. Audit Committee Report and Appointment of Auditors

11. New or Other Business

- Service Awards - Other/New Business - Door Prizes

12. Adjournment

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RADIUS CREDIT UNION

Vision

Working together to build better communities and provide the best financial services – anywhere, anytime, anyway.

Mission

Our rural based Credit Union is a financially sound member owned co-operative that earns member trust and loyalty. Membership ensures access to a full range of competitive, high-quality, financial products and services that benefit both the credit union and the members. Our professional image is based on the use of sound business practices, our sensitivity to our member’s needs and our convenient and friendly service. Our service is delivered by a dedicated group of individuals who are recognized and rewarded for their contributions.

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Values Positive Image and Professionalism The credit union is a respected and caring financial institution that serves its membership with professionalism. Sensitivity to members and community needs is a priority.

Leadership We are an innovative organization that strives to meet the current and future needs of its members. Our knowledgeable staff and board exhibit leadership by direct involvement in community organizations and activities.

Service Excellence We provide quality service in the most cost effective fashion for the convenience of our membership, to limit risk to both parties by working co-operatively together.

Community Involvement We are a member owned and operated financial institution dedicated to supporting community events and projects as well as promoting community development.

Co-operative Principals The credit union is a member owned financial co-operative operating for the betterment of the people and the communities we serve. We co-operate with other organizations and the credit union system for our mutual benefit.

Financial Performance and Productivity We are a member owned and operated credit union which has the responsibility to manage member’s money and resources in a way which ensures the security and stability of the credit union.

Product Excellence The credit union is committed to providing a full line of competitive, high quality products & services that are beneficial to both the credit union and the members.

Minutes of the 6th Annual Meeting Of Radius Credit Union Tuesday April 3rd 2012 Pangman School Gym

Chairman Gordon Young welcomed everyone to the Sixth annual meeting of Radius Credit Union. Gordon thanked the Pangman Charity Farm Board for a wonderful supper. Gordon called the meeting to order at 7:35 p.m. Ted Struthers presented confirmation of Quorum with 84 members and 2 Guests in attendance. He also gave proof of notice of meeting with the meeting being advertised in the Radville Star and Deep South Star more than 20 days in advance of the meeting. Ted Struthers was appointed as Secretary of the meeting. Motion: by Mark Mellon and Ray Barbarin to accept the agenda as presented. Carried. Motion: by James McGregor and Perry Johnson to accept the minutes from the April 18th, 2011 annual meeting. Carried. Gordon Young then introduced our guests: Kelly Watson from Innovation Credit Union Gisele Bourgeois from MNP. Gordon Young & Ted Struthers proceeded to present the Board of Directors & CEO report to the membership. Highlights are as follows: Highlights of the reports presented were as follows:

- Vision Mission and Values were reviewed. - Strategic Initiatives were discussed - 2012 Growth, Margin and Capital were discussed. - Long Term Planning was discussed - ERM process and focus on risk areas were presented - Regulatory environment and focus were discussed - Code of Conduct, Privacy, Market Code & IFRS compliance reports were given - Board Attendance, Remuneration and Expenses reviewed - Committees of the board and who is on them was presented - All Board members are actively participating in the CUDA training - It was noted that Gordon Young continues to be Radius and Bengough CU Delegate and also

that Gordon still sits on the Sask. Central Board - List of Board members, Terms and Years of Service were reported - Gordon thanked the staff that have left and also introduced the new staff by branch. - A listing of all the staff, positions, years of service, as well as the locations they work.

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- The Organization Chart was also included.

Finance:

- Assets of Radius grew by over 10.25% in 2011 - Loans are up by just over 5.00% - Off Balance Sheet assets grew by just under12% (explanation of what is included in off balance

sheet items was provided) - Patronage payment and amount discussed - Margin performance in 2011 as well as the five year financial plan highlights discussed - Capital status both Tier I and Risk Weighted reviewed and explained. - Capital position current and future expectations reviewed. - Loan activity report, delinquency and foreclosed property presented

Development:

- Organizational ERM process reviewed explaining the key areas of review as well as how this

risk is measured and mitigated - Further risk mitigation is implemented in the Strategic Plan and the five year financial plan - Further update on our Technology processes, implementation of Global Payment CHIP cards,

Member Direct enhancements and Mobile Banking were provided. - Building and facility report was presented - Community sponsorship and support is still a key focus. It was reported that the staff volunteer

hours exceeded one thousand hours. - Staff and board were thanked for their dedication and commitment to the organization and the

membership. - It was reported that we remain as a strong corporate supporter in our communities and informed

the membership that there is as list attached showing some of our sponsorship and commitment made in 2011.

Sask. Central Update: As Sask. Central Director Gordon touched on some Central and System Highlights. Details are as follows:

- Currently are 60 Credit Unions in the Province with 300 service outlets - Gordon represents 22Credit Unions with $1.3 Billion in assets, with Radius Credit Union being

the largest in the group that he represents. Smallest CU is $17 million - System has $14. Billion in assets with over 500,000 people being served - Sask Central Annual meeting next week. - Sask Central paid a dividend to the Credit Unions of 2.50% - Gordon also reported on his sitting on the Co-operators Board and is a delegate for the Co-op

Superannuation Society on behalf of Sask. Central. - Gordon also reported that Concentra had a very successful year and we are hoping to get a

dividend equal to the $5.6 million we received last year.

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Auditors Report and Financial Statement Presented by Gisele Bourgeois, Meyers, Norris & Penny:

- Gisele reviewed the Manager’s responsibility note in the statement - Also reviewed the Auditors Report to the membership - Balance sheet and Financial Statement were presented in detail - Gisele pointed out that the Financial Statement in the report was the short form; however the full

length report was available at the registration desk as well as on the Radius CU. Web site for anyone wishing to review or receive a copy.

- Closed with thanking staff, board and management for their assistance in conducting the 2011 audit.

Appointment Committee Report: Ray Barbarin Chairman of the Audit committee gave a detailed report on role and activity of the Audit Committee in 2011. Nominating Committee Report Presented by Brenda Mazer: Keith Bacon provided a detailed report on the composition and role of the Nomination Committee. He also spoke to the structure of the board and on the representation by district. Keith reported to the membership that we have three/ 3year terms expiring this year as well as a vacancy with one year left on the term from the Ceylon District. We had three nomination forms, 2 for the Radville District and 1 for the Ogema/Pangman District and none for the Ceylon District. Keith reported that Gordon Young has been appointed by the board to file this one year vacancy in the Ceylon District. Brenda Mazer reported the directors accepting 3 year terms were Ken Bourassa, and Blair Kotz for the Radville District and Perry Johnson Ogema/Pangman District. And Gordon Young for the Ceylon District. Motion: By Teresa Field and Darcy Iversen to accept all the above reports as presented. Carried. Motion: Blair Kotz and Brenda Mazer moved that we appoint Meyers, Norris, Penny to be our Auditors for 2012. Carried New & Other Business:

- Service Awards:

Mark Mellon Vice President was asked to present the Service Awards Staff Service Awards were as follows:

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Randi McKerricher – 5 years Doris Nelson - 5 years Kathy Nagy – 10 years James McGregor – 15 years Emile Mazenc – 35 years Retirement Service Award: Marilyn Doughty Board Service Awards were as follows: Brenda Mazer - 5 years Door Prize winners were as follows: Julie Metke and Darlene Lund – Credit Union Go Cup, Stephanie Bacon and Doris Nelson – Credit Desk Clocks, George Eckert and Noreen Sawyer – Flash Lights, and Mark Johnson and Teresa Field – Credit Union coaster sets. Meeting was adjourned by Victor Frank @ 8:15 p.m. __________________________ _________________________ Chairman Secretary

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SEVENTH ANNUAL REPORT

Fellow members, I welcome you to this, the seventh annual meeting of Radius Credit Union. I am pleased to report to you that 2012 was a solid year for the Credit Union. Even with the Global Economy still somewhat in question, the strength of our local economy combined with some prudent changes within our operation, we have been able to generate solid growth and improved income levels. Once again the Credit Union has paid member patronage. To remain a vibrant and viable business in the communities we serve, we strive to meet the many expectations that this statement suggests such as:

Financial performance and productivity Products and service excellence People development Community involvement and leadership Protection and stability

In this regard, the board has provided strategic initiatives to management and staff to ensure continued achievement and success. This report will outline how we accomplished the many bottom lines we have been mandated to fulfill. Over the past year, we have dealt with continued low interest rates, additional expenses caused by training and technology change, plus additional impacts with the increases in governance standards, compliance and regulation. Our growth has been solid. Our assets rose to over $184 million with profitability improving to just over $1.7 million before Member Patronage and $767,214 after allocations. Our loan asset ratio ended the year at 60.08%. As a credit union, we must ensure our capital remains strong now and into the future. Our Tier I capital is currently 6.95% which is an improvement over last year end of 6.86% while our Risk Weight Capital closed the year at 13.32% as compared to14.24% the previous year. This decrease was due to our growth as well as the increase in loans and the type of loans we have granted. The Board and Mgt made a decision to grow the loan portfolio knowing our risk weighted capital would decrease. We have set 7% as a minimum in Tier I Capital and a range of 10% – 15% for our Risk Weighted Capital. We continue to focus on building our capital through retained earnings and member allocated equity. Our five year financial plan shows continued growth in both of these important areas. At the last strategic planning session, the board weighed the environment we operate in regulatory changes and the outlook for our organization. The board determined that our long term direction will be autonomy. That said, the board and management both agree that creating alliances and being the best at our core business will be the most advantageous way to achieve this goal. We have and will continue to work with several other credit unions to provide many services to our credit union membership.

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Enterprise Risk Management Each year our Credit Union spends significant resources assessing risks and ensuring we are adequately prepared to serve our communities now and into the future. This process is called Enterprise Risk Management or ERM for short. The Board and Senior Management meet annually at an assessment session followed by our strategic planning session. Based on a comprehensive review of the above, we have analyzed our risks according to the impact to our credit union and the probability of occurrence. The following risks were discussed and analyzed: Credit Risk includes the impact of economic conditions on our loan portfolio and the ability of management to properly administer loans. This area is impacted by everything from weather, demographics, legislative requirements, technology, competition and staffing. We have a history of low delinquency and our growth has lowered the liquidity risk. Over the past year, we have focused on staff training, internal audit function, loan risk rating and set tolerances on our lending exposure. In the coming year we will focus on member education on the insurance and planning products that are available, & expanded credit bureau reporting. Liquidity Risk includes the trend and stability of deposits, the adequacy of our liquidity in relation to our growth and diversification. This area is impacted by demographics, investment risk, profitability, and interest rate risk, ability to attract alliance partners and the concentration and industry mix of our loan and deposit portfolios. We are a highly agricultural based Credit Union, however in recent years, have diversified into other industries as well. We work to offset interest rate risk by matching our deposits with our loans as well, we utilize off balance sheet instruments to mitigate this risk. We have a contract with Innovation Credit Union to assist in compiling this data and assisting our CEO with decisions to help mitigate risk in this area. Over the coming year, we will continue to work with Innovation CU as well as Concentra Financial, to assist with stress testing our portfolio and monitor trends, in order to make appropriate decisions in this area. Strategic Risk includes maintaining our key relationships and prudently planning and undertaking our operations. This area includes relationships with our members, staff, board, the provincial system, our alliance partners, our neighbors and peers as well as the ability and expertise to ensure adequate guidance and planning to meet our long term needs. The board and senior management focus on involvement and ongoing learning to ensure compliance. Over the past year, we moved our details financial reporting to the Audit Committee, and enhanced our strategic plan reporting to the full board of directors. Over the next year, we will further enhance policy for standards and monitoring for consultants, and have started of full review our human resource performance management program. Operational Risk includes the ability to attract and retain qualified staff, afford effective technology solutions and maintain continuity in the face of a disaster. This area is impacted by our culture, structure, labor laws, fraud, changing technology, new products and services, the ability to maintain the technology, as well as catastrophic events such as fire, robbery and pandemic. We have controls and plans in place as well as alliances. Over the past year, we have further enhanced our internal audit function to include a full review of our ERM and Strategic Plan and reporting. We worked diligently at cross training staff, to act as back up for each other in key areas of expertise. Over the next year, we will continue with our staff education and succession planning, further enhance our use of technology and

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focus on further building and growing our Member Relationships. We will also continue to develop our testing processes for business continuity, disaster, technology and pandemic plans. Market Risk includes forecasting, trending, optimizing market risk and ensuring our ability to maintain our presence. It includes items such as our location, technology, long term trends, recent forecasts, interest rate risk and capacity. Over the past year, we have worked with Innovation CU and Concentra Financial on analyzing current and forecasting our future state. In 2013, we will continue to focus on staff training, implementation of new soft ware tools to support staff and member service. We will also be surveying our membership in certain geographic area to find out what they need from us for current and future services. We will be doing this to improve services in order to increase our wallet share. Legal and Regulatory Risks includes the ability to maintain sound governance practices and capital ratios. Over the past year we enhanced reporting on our risk tolerances and expanded internal audit. Our Capital Plan is currently under review and will be completed by June 2013 to be compliant with the new Basel III standards. We are working with Innovation Credit Union the development of policies and work plans, for the implementation of ICAAP and stress testing. Each year we work diligently to close any gaps. With our changing environment legislatively it is a continual evolving goal. Proposed initiatives such as the Federal Credit Union legislation and regulations that result from Basel III may change the way we are able to serve our members. We will continue to monitor all impacts to ensure services to the local communities in a cost effective manner. As we move ahead, we will do so prudently and in a manner that will ensure the present and future viability of our credit union. Capital Credit Union Deposit Guarantee Corporation (CUDGC), regulator of Saskatchewan credit unions, prescribes capital adequacy measures and minimum capital requirements. These capital adequacy rules issued by CUDGC have been based on the Basel II framework, consistent with the financial industry in general. Under this approach, credit unions are required to measure capital adequacy in accordance with instructions for determining risk-adjusted capital and risk-weighted assets. Based on the prescribed risk of each type of asset a weighting of 0% to 150% is assigned. The ratio of regulatory capital to risk-weighted assets is calculated and compared to the standard outlined by CUDGC. Regulatory standards require credit unions to maintain a minimum total eligible capital to risk-weighted assets of 8%, a minimum tier 1 capital to total assets of 5% and the tier 2 Capital to tier 1 capital of less than 100%. Tier 1 capital is defined as a credit union’s primary capital and comprises the highest quality of capital elements. This includes retained earnings, membership shares and member equity/ patronage accounts. Tier 2 capital is secondary capital and includes such things as investment shares or subordinated debt and General Allowance. Our Capital plan has minimums set higher than the CUDGC Standards. Under the Basel II rules our Tier I capital minimum is set at 7% and our Tier II capital minimum is set at 10%. These higher levels were set so we would be proactive as an organization in dealing with negative trending. At this time Radius Credit union does have a General Allowance. Liquidity is a lesser risk as we are just over 60% lent out. We will look further at the liquidity coverage ratio and the net stable funding ratio as more information becomes available from our regulator. We

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will also work with Innovation Credit Union on our financial tracking of these ratios when the ratios become a directive. In last year’s annual report, we stated we would be implementing the new Basel III capital standards and stress testing processes. Due to a delay in role out we will, in 2013 be implementing, a process to stress test our internal capital adequacy assessment process (ICAAP). It will be based on internationally accepted guidance and best practices to align us with the broader financial industry. This stress testing is a key tool for the board and senior management to use in making business strategy, risk management and capital management decisions. As a component of ICAAP, credit unions are required to perform rigorous, forward looking stress testing to complement and validate risk management approaches. These tests identify possible events or changes in market conditions and their effect on the financial condition of the organization. Code of Conduct Our credit union has adopted a Code of Conduct for the organization. This code reflects Radius Credit Union’s vision, mission and values, policies, practices and board resolutions and will guide the behavior of directors, key executives and staff and demonstrate the commitment of the Credit Union to ethical practices. We are committed to supporting this code by ensuring employees and directors are provided with orientation and information that ensures understanding, awareness and commitment. This code outlines expected ethical behaviors and also states that at all times and wherever it operates, the credit union will comply with the letter and spirit of all applicable laws and regulations. Standards of day to day conduct will be higher than those required by law. At a minimum, no employees, directors or delegates acting on behalf of Radius Credit Union will at any time take any action that they know or reasonably should know will violate any applicable law or regulation. Our directors have a responsibility to act ethically and to be perceived to be acting ethically by the organizations and individuals with which they are associated. The employees must play a role of trustee and servant. The Board must play a role of leader/trustee and servant. Privacy Code We are committed to keeping members’ personal information accurate, confidential, secure and private. We adhere to a Privacy Code based on the Credit Union Central of Canada Model Privacy Code and the Model Code for the Protection of Personal Information. Ten interrelated principles form the basis of our Code for the protection of Personal Information (“the Code”). These principals are accountability, identifying purposes, consent, limiting collection, limiting use, disclosure, retention, accuracy, safeguards, openness, individual access, and compliance. Market Code Our credit union adheres to a voluntary Market Code that obliges our employees, directors, officers and service providers to act in accordance with the highest standards of personal and professional integrity.

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We have also endorsed a formal complaint handling process that includes the Ombudsmen for Banking Services and Investments and the Centre for Financial Services Ombudsmen Network IFRS We are pleased to report that we have fully adopted and implemented the International Financial Reporting Standards (IFRS).

During 2012, your board held 10 regular meetings and 9 special/ committee meetings. This was in addition to Strategic Planning sessions, Director Training sessions, and participating in Provincial & National Conferences. All of your directors are enrolled in Director Training and continue to participate in the new and existing modules. (Total remuneration paid to the board - $19,655.00, Travel, rooms & meals - $4,656.41, Insurance - $3,001.77 and Development and Training - $25,084.97).

Committees of the board are as follows:

Executive Committee: acts on behalf of the board of directors between regular or special board meetings on most board matters. The 2012 members of this committee were: Ray Barbarin Pres., Keith Bacon Vice Pres, Ken Bourassa and Gord Young Conduct Review Committee: ensures related party transaction comply with legislation, standards of sound business practice as well as credit union policies and procedures. Also to review all CEO/General Manager credit requests. 2012 members of this committee were: Perry Johnson, Keith Bacon & Teresa Field. Building Committee: works with Management to develop plans and budget relevant to credit union facilities. 2012 members of this committee were: Darcy Iversen, Mark Mellon & Teresa Field. Nominating Committee: oversees the nomination and election processes for the elections of credit union directors. 2012 members of this committee were: Ken Bourassa, Blair Kotz, Perry Johnson & Gord Young. Public and Member Relations Committee: this committee is the eyes and ears for the board of directors in the communities as to member’s product and service satisfaction. 2012 members of this committee were: Perry Johnson, Blair Kotz and Christine Peters. Audit & Risk Committee: oversees risk management and ensures the integrity of financial reporting, adequacy of internal controls and adherence to relevant legislation, regulations and standards. Audit Committee also sets direction for and reviews the results of both Internal and External Audit. 2012 members of this committee were: Ray Barbarin, Blair Kotz & Brenda Mazer.

In June of 2012 Christine Peters resigned from our Board. With the new addition to their family

and their work commitments, Christine found if very difficult to attend and participate as director. We

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would like to thank Christine for her time and contribution to the Credit Union and wish her and her young family the very best.

Gordon Young remains as the Delegate for Radius and Bengough Credit Union to Sask Central

as well as being a Sask. Central Board Member. As a Board Member of Sask Central he also represents 20 other Saskatchewan Credit Unions. Listed below is your 2012 Board of Directors:

RADIUS CREDIT UNION BOARD AND EXECUTIVE

OFFICERS

PRESIDENT RAYMOND BARBARIN VICE-PRESIDENT KEITH BACON SECRETARY/TREASURER TED STRUTHERS NAME TERM EXPIRES YEARS OF SERVICE Darcy Iversen 2013 24 Brenda Mazer 2013 6 Teresa Field 2013 5 Gordon Young 2013 30 Vacant 2013 Mark Mellon 2014 14 Keith Bacon 2014 14 Ray Barbarin 2014 25

Ken Bourassa 2015 22 Blair Kotz 2015 10 Perry Johnson 2015 22

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We are pleased to report that in 2012 we had very little turn over in staff. We would like to

recognize and thank Jana Hillestad/Floer and Doris Nelson for their contributions to Radius Credit Union. Jana has now accepted a position with Spectra Credit Union Minton Branch and Doris and Damon Nelson had their 3rd addition to the family. Barb Verhelst remains on extended sick leave at this time and we wish her the best in her recovery. Krista Klemenz and Randi McKerricher are now back from their maternity leaves. We would like to welcome Joyce Walters and Michelle Leonard to our staff compliment. Joyce is our Part Time MSR that fills in at the Avonlea, Ogema and Pangman Branches. Michelle is our Marketing/Human Resource Coordinator for Radius. We would also like to thank Erin Kessler and Trina Holland for accepting their new roles. Erin is now the Team Leader/MSR Supervisor at the Radville Branch and Trina is a Lending Service Representative at our Avonlea Branch.

We have full confidence that the team of employees we have assembled will continue to provide

the quality member service you have been accustomed to, and expect. Listed below and on the following pages you will see a full list of our employees, their position,

location as well as their years of experience, followed by the Radius Credit Union Organizational Chart. This chart will assist all you in understanding our structure.

STAFF LISTING BY BRANCH & JOB TITLE:

ADMINISTRATION:

NAME: POSITION YEARS OF CU SERVICE

Ted Struthers CEO/General Manager 33 James McGregor Mgr of Retail Operations 16 Gary Skjerven Mgr of Lending Services 40 Janet Murray Admin Assistant 34 Lorna Lillejord Admin Assistant 24 Michelle Leonard HR/Marketing

WEALTH SERVICES:

Sandra Scott Mgr. of Wealth & Investment Services 33 Travis Leonard Wealth & Investment Services Officer 5

AVONLEA BRANCH:

Tara Field Business Development Mgr. 14 Trina Holland Lending Service Rep 3 Dianna Weed Member Service Rep 5 Heather Broughton Member Service Rep 2

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CEYLON BRANCH:

Larry Lillejord Business Development Mgr. 40 Cheryl Rowland Lending Service Rep 19 Mary Jayne Pflanzner Member Service Rep 17 Svitlana Lagun Member Service Rep 1

OGEMA BRANCH: Krista Klemenz Lending Service Rep 8 Cheryl Dixon Lending Service Rep 2 Randi McKerricher Team Leader/MSR Sup 6 Bev Mead Member Service Rep 34 Meagan Nagy Member Service Rep 2 Joyce Walters Member Service Rep Kathy Nagy Statement Services 11

PANGMAN BRANCH:

Valerie Madigan Member Service Rep 18 Krista Antal Member Service Rep 2

RADVILLE BRANCH Emile Mazenc Lending Service Rep 36 Roxanne Wiles Lending Service Rep 24 Carri Henheffer Loan Clerk 7 Denise Kaufmann Loan Clerk 2 Barb Verhelst Team Leader/MSR Sup. (LTD) 33 Erin Kessler Team Leader/MSR Sup. 5 Candace Schindel Member Service Rep 5 Edna Petersen Member Service Rep 3 Norenne Sawyer Member Service Rep 1 Brenda Hofmeister Member Service Rep 1 (ML = Maternity Leave, LTD = Long Term Disability)

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FINANCIAL OVERVEIW

Our Assets grew over 9.50% to $184,524,517.00. The loan portfolio grew just over 14.00% to just under $112,000,000 and our off balance sheet assets grew just over 6.50%, to close the year just under $12,500,000.00. (This includes mutual funds, RESP’s, Self Directed RSP’s & Qtrade on line brokerage) Each branch location contributed positively to the growth. As mentioned earlier in the report, 2012 was a good year for Radius Credit Union. With no increase in interest rates, the further restructuring of our balance sheet combined with our on and off balance sheet growth we were able to increase our profitability. Management and Staff also worked very hard to explore and incorporate other operational efficiencies that reduce expenses and increase revenues. With all this coming together, the Board of Radius Credit Union was able to declare a 4.75% member patronage dividend as well as pay a 5% return on the Member held equity accounts. The return on Member Equity accounts is a new feature this year that we have been able to provide. We intend to continue with this payment when we are financially able to. This provides further incentive and benefit to our members participating in our Member Equity program. The total dollars allocated this year was just under $440,000.00. This money was paid based on interest earned on deposits and investments as well as interest paid by members on loans. All proceeds were paid on March 25th.

Our margin remains low @ 2.42%. Management and staff continue to work on improvements in this area. Late in 2012 we experienced significant loan growth as a result of effort to move out side of our regular trading area to attract loans. This was a decision made by Board and Management, which reflects very positive results in our five year financial plans. We will continue to insure that we have adequate funding to support local loan demand now and into to the future.

As mentioned earlier in our report, another area of key focus for the credit union is capital. The

credit union, the same as any other business or farm operation, requires a strong capital base to remain strong and viable into the future. Last year we reported that our year end eligible capital position was at 7.18%. With our Asset growth of just over 8.90% this year, the Board elected to hold additional funds in retained earnings to improve our Capital position 7.28%. As we move forward with the new Basel III standards, our Capital position continues to improve. While we are still at the early stages of this process all indicators are we are in a strong position moving forward. Board and Management are paying close attention to this area. We are reviewing our capital plan and the one and five year financial plans to insure that we continue to grow this important area of our business. We have developed strategies and monitoring processes that will keep us in the ranges set in our plan. Our dollars of capital continue to grow, and our plan will see it keep pace with asset growth. It is the feeling of Management and the board, that we are positioned very well moving forward. Our one and five year financial projections do confirm these opinions. The key areas that are covered in our Capital Plan are as follows: Capital Adequacy/Equity, both Tier I and Risk Weighted Capital, Profitability, Liquidity Management, Interest Rate Risk, Loan Growth and Delinquency. Action plans have been identified and are reflected in the three to five year financial plan. Moving forward these will be our key tools to measure against and mitigate our risk against.

Our loan department was very active again in 2012. This is reflected in our growth rate of just over 14.0%. There were 650 new loans approved for a total of $73,752,512.00. Our delinquency over 90

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days at year-end was .82% which is well below the CUDGC standard of 4%. We feel this is an excellent rate of performance and speaks very highly of our lending department as well as our membership. Our loan portfolio mix remains similar to other years with Agriculture loans @ 36%, Consumer loans @ 38% and Commercial loans @ 26%. We have no foreclosed property at this time. The breakdown of Credit Activity in 2012 is as follows: New Credit : 650 for $73,752,512.00 Leases : 3 for $ 150,228.00 Amendments : 73 for $ 8,373,586.00 Reviews : 109 for $ 9,578,435.00

DEVELOPMENT

As mentioned earlier in the report, your Board of Directors and Management hold a special Risk Management review process. The purpose of this session is to set time aside to focus only on the risks that exist that could negatively impact Radius Credit Union. Once all the risks are identified, we proceed to review the current risk mitigation strategies. We determine if these are adequate to meet the requirements moving forward as well as which risks need the most attention. This Enterprise Risk Management process flows into our annual Strategic Planning process. During the Strategic Planning process, the board sets priorities for Management to mitigate the risk to the Credit Union and to give clear direction as to where we want to be in the next five years. The strategic focus areas for Radius Credit Union are as follows:

- People : Focus is to have well trained knowledgeable staff providing excellent Member Service

- Products and Services: Meet members needs while balancing the needs of our Credit Union - Business Operations: Meet or exceed all regulatory requirements - Financial Performance: Increase profitability and equity position and manage risk within

acceptable levels. - Community: Be active in the communities we serve and contribute positively to their future

sustainability.

Management is then left to develop tactics that will achieve the goals the board has set. Once the tactics are developed, the board will review for approval process. Once approved Management will provide progress to plan reports to the board on a quarterly basis.

The fifth and final stage of our Technology plan is now complete. This project was to bring our RSP and RIF accounting into our banking system. The project was started in October of 2012 and was finalized in January of 2013. Radius Credit Union Members now have full access to their RSP’s and RIF’s across the counter and are able to view their registered accounts through Member Direct.

We continue with our commitment of quality member service. Over the course of 2012 we

continued with our agreement with Affinity Credit Union to expand our Wealth Management Service offering to our membership. With this contract we are able to refer our members to their CSI Representative and access products and services we are not licensed to offer. These include expanded Life Products, Securities, detailed financial planning, Succession Planning and much more. With this

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contract we still hold the relationship with our member, and provide an access channel to these services. For further information on these offerings, please feel free to discuss with our Wealth Management Professionals.

In 2012 new services we rolled out to our membership included Chip Global Payment Card,

Member Direct enhancements, direct link to your Credential Accounts, increased Mobile Banking, expanded Investment products, new loan products and increased Loan/ Life Insurance products. Each year we continue to grow our product and service offerings to help grow our Member Relationship.

We currently have Credit Union owned housing in Ceylon, Ogema and Radville. Larry Lillejord lives in our Ceylon house, Gary Skjerven is living in our Radville house and the house in Ogema in rented to Derek and Jessica Derringer. We will be advertising the Ogema house for sale in the near future.

This past year we had to do some modifications to the landscape at our Radville and Pangman

office buildings, due to flooding. We are hoping that our efforts will resolve the issue. Our building Committee continues to monitor these situations as we have further concerns this year with our high level of winter moisture. We have budgeted to re-paint the interiors of the Radville and Ogema Branches.

Your credit union remains a strong corporate citizen and community leader through our

involvement by staff and board members on numerous volunteer organizations and groups. The staff alone contributed well over one thousand hours of volunteer time in 2012. We also sponsor and donate to many local events, group functions and charities in the communities we serve.

The Board of Directors would like to take this opportunity to thank the members for their

increasing patronage, and commend our staff for their dedication and commitment to provide superior member service.

One of the Radius Credit Union Values is: “to be dedicated to supporting community events

and projects, as well as promoting community development”. This is demonstrated through donations, sponsorships and volunteering.

The following is a list of the clubs, organizations and events that have benefited from your

community-minded Credit Union, Board of Directors and Staff: High School Scholarships Minor Hockey Associations Minor Ball Bonspiels Regional Parks Golf Courses & Tournaments Radville 4-H Club Pangman/Ogema 4 –H Club Dance Clubs Community Calendars Radville Rodeo Ogema Fair Ogema Museum Avonlea Museum High School Year Books Kinsmen Club Lions Club St. Olivier School Ogema School Land Scaping Ogema Railway Station Radville Swimming Pool

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High School Athletics Legions Youth Councils Avonlea Senior Hockey Senior Clubs Meals on Wheels Avonlea Curling Club Avonlea Figure Skating Club Radville Health Centre Pangman Genealogy Ogema Playschool Centennial/Homecoming Celebrations Agribition Crop Production Show High School Athletics Dirt Hills Wildlife Club PFRA Gap Rec Centre Ceylon Demolition Derby Claybank Brick Plant Fide for MS Deep South Pioneer Museum Co-op Youth Council Telemiracle Terry Fox Run National Camp for the Blind Radville Wild Life Federation Radville Chamber Deep South Super League Town Councils Avonlea Museum Pangman Health Centre Pangman Rec Centre Local Regional Library’s Local School Boards Ogema Ag Society Ogema Rink Board Church Boards Radville-Laurier Regional Park Deep South Personal Care Home Fishing Derby’s Communities in Bloom Radville EDC Breast Cancer Society Coaching and Managing Minor Sports and Senior Sports Teams Radville Health Centre Avonlea Community Hall Radville Senior Nats Ogema Second Hand Store Local Area Food Banks Bengough Rec Centre Borderline Music Festival Ceylon Rink Juvenile Diabetes

Raymond Barbarin President E.H. (Ted) Struthers CEO/GM

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Nomination Committee Report

The Nomination Committee consists of the directors that were elected in the previous year. The Nomination Committee for 2013 is Ken Bourassa, Blair Kotz, and Perry Johnson. The purpose of the Nomination Committee is to oversee the annual nomination and election of directors for the Radius Credit Union. The Committees role is to ensure there are sufficient qualified nominees to fill each vacancy on the board. It is the practice of the Credit Union for the Nomination Committee to actively solicit qualified members to seek election to the board so that the board has the appropriate representation by the allocated districts. Currently our allocation is as follows: Ceylon District - 1 Board Member Ogema/Pangman - 5 Board Members Radville - 5 Board Members Bylaw provides for a total of 12 Board Positions, and the 12th seat is not allocated to a specific region. All director terms are to be 3 years. This year we started advertising on March 1st 2013 for two, three year terms in the Radville district, two three year terms for Ogema/Pangman District and one, one year term in the Ceylon district. We are also pleased to report that there has been an expression of interest in a board representative from the Avonlea district. Tim Forer of Avonlea has let his name stand and will fill the 12th board spot. We are pleased to advise that Teresa Field and Gordon Young have submitted nomination forms for the Radville District, Brenda Mazer and Darcy Iversen for the Ogema District and Tim Forer will now represent the Avonlea district. Unfortunately we had no members from Ceylon District submit a nomination form. I am pleased to report that all but the Ceylon District Position are filled for 2013. Directors accepting 3 year terms are Teresa Field and Gordon Young for Radville District, Brenda Mazer and Darcy Iversen Ogema/Pangman District and Tim Forer accepting a three year term for Avonlea. It has also been noted that we will be conducting a bylaw review for presentation at next year’s annual meeting, where we will review our Director Representation model.

Ken Bourassa, Nomination Committee

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AUDIT COMMITTEE REPORT

The Audit Committee’s purpose is to ensure an independent review of the credit union’s operation in the areas deemed necessary to maintain the integrity of financial data, adequacy of internal controls and adherence to The Credit Union Act, 1998 and our policies. The 2012 Audit Committee was comprised of Chairperson, Ray Barbarin, Brenda Mazer and Blair Kotz. This past year the committee held six meetings. The committee directs, reviews and approves the letter of engagement for the external auditor (Meyers, Norris Penny) and internal audit (Sask. Central) , annual audit fees, audit plans and scope of the audits before the auditors commence work for the current year. The committee reviews the performance of the internal and external auditors and makes a recommendation to the board of directors and the membership at the annual general membership meeting on the appointment of the external auditor for the ensuing year. Once the external and internal auditors have completed the annual audit, the committee reviews the audit reports with the auditors. If either auditor has noted any significant observations and recommendations, the committee monitors management to determine that necessary corrective actions have been made. At least annually, the committee meets with the external and internal auditor. Radius Credit Union Audit Committees role includes:

- Review of information received from management on risk assessments (Enterprise Risk Management) and any significant legislative non-compliance items.

- Review the annual auditor’s audited consolidated financial statements and supplementary information before they are approved by the board and prior to publication.

- Recommend board approval of the quarterly and annual financial statements - Review of, and recommendation of board approval of the financial budget prepared by the

CEO/General Manager In addition to the annual external audit, the Credit Union Deposit Guarantee Corporation conducts audits of Radius credit union every two years to ensure compliance with the Credit Union Act, 1998 on behalf of the Registrar of Credit Unions. Credit Union Deposit Guarantee, the external auditor and the internal auditor have all acknowledged that Radius Credit Union meets or exceeds the audit results for credit unions of similar size. In addition, Radius Credit Union meets or exceeds all financial targets mandated by the Credit Union Deposit Guarantee Corporation.

Brenda Mazer, Audit Committee