Radius Credit Union Annual Report 2011

RADIUS CREDIT UNION
ANNUAL MEETING
FOR THE YEAR ENDING DECEMBER 31, 2011
TUESDAY APRIL 3RD, 2012
1.
Call to Order
2.
Confirmation of Quorum & Notice of Meeting
3.
Appointment of Secretary
4.
Approval of Agenda
5.
Minutes of the 2010 Annual Meeting
6.
President and CEO/General Manager Report
7.
Sask Central Director Report
8.
Auditors Report & Financial Statement
9.
Nomination Committee Report:
-
Three/3 year terms
one/1 year term
10.
Audit Committee Report and Appointment of Auditors
11.
New or Other Business
-
12.
Service Awards
Other/New Business
Door Prizes
Adjournment
1
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, highquality, 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.
2
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.
3
Minutes of the 5th Annual Meeting
Of Radius Credit Union
Monday April 18th 2011
Ogema Museum Hall
Chairman Gordon Young welcomed everyone to the Fifth annual meeting of Radius Credit Union.
Gordon thanked the Museum Board for another wonderful supper.
Gordon called the meeting to order at 7:20 p.m.
Ted Struthers presented confirmation of Quorum with 69 members is 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 Darcy Iversen and Lorna Lillejord to accept the agenda as presented. Carried.
Motion: by Ray Barbarin and Perry Johnson to accept the minutes from the April 12th, 2010 annual
meeting. Carried.
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:
People:
-
Board of Directors meetings, attendance, remuneration and expenses paid.
All Board members are actively participating in the CUDA training
Reported on the Committee structure within Radius to deal with certain issues.
It was noted that Gordon Young continues to be Radius and Bengough CU Delegate and was reelected for a 3 year term as a director on the Sask Central Board.
Gordon thanked the staff that have left and also introduced the new staff by branch.
A listing of all the board members and their years of service is attached as well as the same for
all the staff, as well as the locations they work.
The Organization Chart was also included.
Money:
-
Assets of Radius grew by over 6.40% in 2010
Loans are up by 10.49%
Off Balance Sheet assets grew by 19% (explanation of what is included in off balance sheet
items was provided)
Patronage payment and amount discussed
4
-
Margin performance in 2010 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
Implementation of IFRS standards were discussed
Further update on our Technology processes, implementation of 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 2010.
Auditors Report and Financial Statement
Presented by Rod Sieffert, Meyers, Norris & Penny:
-
Rod 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
Rod gave a brief review of what the implementation of IFRS standards will mean to the Radius
Credit Union
Closed with thanking staff, board and management for their assistance in conducting the 2010
audit.
Sask. Central Update: As Sask. Central Director Gordon touched on some Central and System
Highlights. Details are as follows:
-
Currently are 61 Credit Unions in the Province with 313 service outlets
Sask Credit Unions employ more that 3600 people
Gordon represents 23 Credit Unions with $1.2 Billion in assets.
System has $14. Billion in assets with over 500,000 people being served
Alberta, Sask and Manitoba Central merger is not going to occur. The Alberta regulator put an
end to this process.
Sask. and Manitoba Centrals were doing some investigation to see if it makes sense for them to
still merge. However this is now off the table too.
Gord also reported that the merger of the three largest CU’s in the Province also has been voted
down by membership.
5
- Sask. Central is pursuing a Federal Charter.
Motion By Ray Barbarin and Mark Mellon to accept all the above reports as presented. Carried.
Appointment of Auditors: Blair Kotz and Brenda Mazer moved that we appoint Meyers, Norris, Penny
to be our Auditors for 2011. Carried
Nominating Committee Report
Presented by Brenda Mazer:
Brenda reported to the membership that we have four/ 3year terms expiring this year as well as a
vacancy with two years left on the term from the Ceylon District. We had five nomination forms 3 for
the Radville District and 2 for the Ogema District and none for the Ceylon District. Brenda reported that
Gordon Young withdrew his name from the Radville District and the Board would be appointing him to
fill the vacancy in the Ceylon District at the re-organizational meeting, until the next annual meeting. At
this time we will advertise again and if no one comes forward the Board could then appoint a
replacement.
Brenda Mazer reported the directors accepting 3 year terms were Ray Barbarin and Christine Peters for
the Radville District and Keith Bacon and Mark Mellon for the Ogema District.
New & Other Business:
- Service Awards:
Mark Mellon Vice President was asked to present the Service Awards
Staff Service Awards were as follows:
Carri Henheffer – 5 years
Krista Klemenz - 5 years
MaryJayne Pflanzner – 15 years
Retirement Service Awards:
Kathryn Aspen and Lloyd Pierce
Board Service Awards were as follows:
Perry Johnson and Ken Bourassa both for 20 years
Door Prize winners were as follows: Nola Leonard and Linda Tondevold – Credit Union Go
Cup, Richard Strobl – Credit Union BBQ fork, George Bacon and Vivian Mead – Credit Union
Desk Clock and Patricia Johnson – Credit Union Glasses.
Meeting was adjourned by Victor Frank @ 8:03 p.m.
__________________________
Chairman
_________________________
Secretary
6
SIXTH ANNUAL REPORT
Fellow members, I welcome you to this, the sixth annual meeting of Radius Credit Union. I am
pleased to report to you that 2011 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. This turn
around has enabled the Credit Union to once again pay 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, and
changes to accounting and reporting standards.
Our growth has once again been solid. Our assets rose to over $169 million with profitability improving
to just under $1.2 million before Member Patronage and $546,220.00 after allocations. Our loan asset
ratio ended the year at 58.01%. As a credit union, we must ensure our capital remains strong now and
into the future.
Our Tier I capital is currently 6.86% which is an improvement over last year end of 6.39% while our
Risk Weight Capital closed the year at 14.24% as compared to12.80% the previous year. In this
changing environment, we have set 7% as a minimum in Tier I Capital and a range of 12% – 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 recent growth has lowered the liquidity risk. Over the past year, we have focused
on staff training, obtained and contracted an internal audit function, and set tolerances on our lending
exposure. In the coming year we will focus on member education on the insurance products that are
available, credit bureau reporting, and develop a loan payment due notice process.
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 would include 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. Our President sits as a Board Member on Sask
Central. Over the past year, we enhanced our capital planning and monitoring and set tolerances for
risk. Over the next year, we will enhance policy for standards and monitoring for consultants, and
further review our human resource policies and planning.
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 implemented an internal audit function,
consolidated our two banking systems and 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 continue with our staff attraction and
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retention strategies. We will also introduce as testing process 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 developing processes in the new banking system environment and analyzing current and
forecasting our future state. We have also worked with Meyer Norris Penny on preparing for the IFRS
implementation. In 2012, we will focus on staff training, implementation of new soft ware tools to
support staff and member service. We will also focus on strengthening our relationships with our
members 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 internal audit, updated our
capital plan, and researched and signed a contract for internal audit. In the coming year, we will work
on enhancing audit policies and work plans, review our succession for key positions, and implement
ICAAP and stress testing. We will also be preparing for the impact of the new regulations that will come
as a result of Basel III.
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 riskweighted 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. At this time Radius Credit union does have a General Allowance.
Liquidity is a lesser risk as we are 58% 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 will also
work with Innovation Credit Union on our financial tracking of these ratios when the ratios become a
directive.
9
In 2012 we will be undergoing a process to stress test our internal capital adequacy assessment process
(ICAAP) which is the new Basel III standards. 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.
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
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IFRS
As a publicly accountable entity, we are required to adopt International Financial Reporting Standards
(IFRS) commencing January 1, 2011. The December 31, 2011 year end financial statements will be
prepared in accordance with IFRS, including the 2010 comparative figures. IFRS are premised on a
conceptual framework similar to Canadian GAAP (Generally Accepted Accounting Principles),
however, significant differences exist in certain matters of recognition, measurement, presentation and
disclosure. Please note that our 2011 financial statement is prepared in compliance with the IFRS
Standards, however in your annual meeting booklet, we have provided an abbreviated statement.
Anyone wishing to have a copy of the long form is welcome to pick one up at the end of the meeting, or
visit our Web Site. www.raduiuscu.com. And review the statement on line.
During 2011, your board held 10 regular meetings and 12 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 - $18,975.00, Travel, rooms &
meals - $6,445.95, Insurance - $2,654.17 and Development and Training - $21,602.92).
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 2011 members of the committee were: Gordon Young Pres., Mark
Mellon Vice Pres, Ken Bourassa and Ray Barbarin
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. 2011 members of this committee are: Perry Johnson, Keith Bacon & Teresa
Field.
Building Committee: works with Management to develop plans and budget relevant to credit union
facilities. 2011members of the committee were: Darcy Iversen, Keith Bacon & Teresa Field.
Nominating Committee: oversees the nomination and election processes for the elections of credit
union directors. 2011 member of the committee was: Mark Mellon, Keith Bacon, Ray Barbarin &
Christine Peters.
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. 2011 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. 2011
members of this committee were: Ray Barbarin, Blair Kotz & Brenda Mazer.
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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 2011 Board of Directors:
RADIUS CREDIT UNION BOARD AND EXECUTIVE
OFFICERS
PRESIDENT
VICE-PRESIDENT
SECRETARY/TREASURER
NAME
GORDON YOUNG
MARK MELLON
TED STRUTHERS
TERM EXPIRES
YEARS OF SERVICE
Ken Bourassa
2012
21
Blair Kotz
2012
9
Perry Johnson
2012
21
Darcy Iversen
2013
23
Brenda Mazer
2013
5
Teresa Field
2013
4
Christine Peters
2013
1
Mark Mellon
2014
13
Keith Bacon
2014
13
Ray Barbarin
2014
24
Gordon Young
2012
29
12
We would like to recognize and thank the staff who have pursued other career opportunities for
their years of service and contribution. This includes Melissa Dyck (Avonlea/Ogema), Lloyd Pierce
(Avonlea) Derek Baumgartner and Kassi McCabe (Ogema), Sharon Nyhus (Pangman) Deb Soanes and
Melissa Scott (Radville). We also will be recognizing Marilyn Doughty later as she has chosen to retire.
We would also like to take this opportunity to welcome our new staff to the Credit Union.
Svitlana Lagun MSR (Ceylon) Trina Holland LSR (Ogema), Norenne Sawyer MSR (Radville) Brenda
Hofmeister (MSR) Radville, Edna Peterson MSR (Radville). We would also like to welcome both Gary
Skjerven (Mgr of Lending) and Val Madigan back to the staff. Val has been off on sick leave and since
returning has been working in our Pangman Branch. Gary returned to us as Mgr of Lending in June of
2011. At this time we would like to congratulate Tara Field on moving into the BDM position at our
Avonlea Branch. Tara accepted this position in 2011 and we have full confidence she will do very well
in her new role.
As you can see by the above report, we have had a very active year in the Human Resources
side. 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 & FUNCTION:
ADMINISTRATION:
NAME:
POSITION
YEARS OF CU SERVICE
Ted Struthers
James McGregor
Gary Skjerven
Janet Murray
Lorna Lillejord
Doris Nelson
CEO/General Manager
Mgr of Retail Operations
Mgr of Lending Services
Admin Assistant
Admin Assistant
Marketing
32
15
39
33
24
5
WEALTH SERVICES:
Sandra Scott
Travis Leonard
Mgr. of Wealth & Investment Services
Wealth & Investment Services Officer
32
4
AVONLEA BRANCH:
Tara Field
Dianna Weed
Heather Broughton
Business Development Mgr.
Member Service Rep
Member Service Rep
13
13
4
1
CEYLON BRANCH:
Larry Lillejord
Cheryl Rowland
Mary Jayne Pflanzner
Svitlana Lagun
Business Development Mgr.
Lending Service Rep
Member Service Rep
Member Service Rep
39
18
16
new
OGEMA BRANCH:
Krista Klemenz
Cheryl Dixon
Trina Holland
Randi McKerricher
Bev Mead
Erin Kessler
Meagan Nagy
Kathy Nagy
Lending Service Rep (ML)
Lending Service Rep
Lending Service Rep
Admin Assistant/MSR Sup (ML)
Member Service Rep
Member Service Rep
Member Service Rep
Statement Services
7
1
2
5
33
4
1
10
PANGMAN BRANCH:
Valerie Madigan
Krista Antal
Member Service Rep
Member Service Rep
17
1
RADVILLE BRANCH
Emile Mazenc
Roxanne Wiles
Carri Henheffer
Denise Kaufmann
Barb Verhelst
Candace Schindel
Edna Petersen
Jana Hillestad
Norenne Sawyer
Brenda Hofmeister
Lending Service Rep
Lending Service Rep
Loan Clerk
Loan Clerk
Team Leader/MSR Sup.
Member Service Rep
Member Service Rep
Member Service Rep
Member Service Rep
Member Service Rep
(ML = Maternity Leave)
14
35
23
6
1
32
4
2
1
new
new
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FINANCIAL OVERVEIW
Our Assets grew just over 10.25% to $169,470,073.00. The loan portfolio grew just over 5.00%
to $98,192,049 and our off balance sheet assets grew just under 12%, to close the year @
$11,708,784.00. (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, 2011 was a solid year for Radius Credit Union. Even with
interest rates at the lowest level on record, the 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
8.5% member patronage dividend for 2011. The total dollars allocation this year was $650,000.00. This
money was paid based on interest earned on deposits and investments as well as interest paid by
members on loans. We will be hosting Member Equity days from April 18th to the 20th, so please come
in to any of our branches, pick up your cheque and enjoy coffee and dainties with our staff.
As reported at last years meeting, our margin started the year at just over 2% and continued to
improve as the year progressed. The credit union’s interest rate risk was reduced significantly in the last
quarter of 2010 and continued to lessen as the year progressed. With the improvements in our
Asset/Liability matching and the changes to our balance sheet, we see very positive results in our five
year financial plans.
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
7.35%. With our Asset growth of just over 10% this year, our capital percentage has been reduced to
7.18%. While this is still above our minimum target, the Board and Management are paying close
attention to this area. We have reviewed 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. Even though our dollars of capital
have grown, they have not grown at the same pace as our asset base. It is the feeling of Management and
the board, that given our previous years issues in the Agricultural Community that our rate of growth for
2012 will slow and allow our Capital to catch up. 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 2011. This is reflected in our growth rate of just
over 5.0%. There were 701 new loans approved for a total of $41,559,154.00. Our delinquency over 90
days at year-end was .16% 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 @ 41%, Consumer loans @
30% and Commercial loans @ 19%. We have no foreclosed property at this time.
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The breakdown of Credit Activity in 2011 is as follows:
New Credit
Leases
Amendments
Reviews
:
:
:
:
701 for $41,559,154.00
4 for $ 339,197.00
77 for $ 6,166,751.00
58 for $ 5,429,750.00
DEVELOPMENT
As mentioned early 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:
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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.
August 2011 marked the completion of the fourth stage of our technology plan. We were able to
bring our two separate banking platforms together into one. This was a six month initiative, which our
internal team, in conjunction with Celero, our service provider, started early in 2011. With the
completion of this process, Radius Credit Union Members can now access all their accounts from any of
our five branches. This process has reduced the current duplication of administration, and provides us
with more efficiency and ease of member service. The fifth and final stage of our Technology plan will
be to bring our RSP and RIF accounting into our banking system. This will provide our members with
the ability to view their registered accounts through Member Direct. We have not yet determined when
this will occur.
We continue with our commitment of quality member service. Over the course of 2011we
entered into an 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
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Life Products, Securities, detailed financial planning, Succession Planning and much more. With this
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.
Due to our efforts to merge our two banking systems, we were unable to expand our services in
2011 in the areas of technology, however we are moving forward in 2012 with Chip Global Payment
Card, Member Direct enhancements, E-mail money Transfer, increased Mobile Banking and much
more. Please watch for details as we role these services out to you.
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 currently the Ogema house
is vacant. We obtained this house as part of a buy back agreement we had in place with Derek
Baumgartner, who moved in June of last year. We are holding this for the time being, as we will be
hiring a HR/Marketing person for an 18 month contract, and we want to ensure they have a place to live.
This past year we had to do some modifications to the landscape at our Radville office building,
due to flooding. We are hoping that our effort last fall will resolve the issue. Currently we have no
building projects indentified for 2012.
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 2011. 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
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
Ogema Senior Hockey
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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
RCMP Ball
Agribition
Crop Production Show
High School Athletics
Dirt Hills Wildlife Club
PFRA
Gap Rec Centre
Ceylon Demolition Derby
Claybank Brick Plant
Radville History Book
Deep South Pioneer Museum
Co-op Youth Council
Telemiracle
Terry Fox Run
National Camp for the Blind
Radville Wild Life Federation
Radville Chamber
Radville Rodeo Committee
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
Gordon Young 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 2012 election are Keith Bacon, Mark Mellon, Christine Peters, and Ray
Barbarin.
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
All director terms are to be 3 years.
This year we started advertising on March 1st 2012 for two, three year terms in the Radville district, one
three year term for Ogema District and one, one year term in the Ceylon district.
We are pleased to advise that Ken Bourassa, and Blair Kotz have submitted nomination forms for the
Radville District and Perry Johnson for the Ogema District. Unfortunately we had no members from
Ceylon District submit a nomination form.
At our recent board meeting Gord Young has agreed to fill this vacancy for the next year.
I am pleased to report that all positions on the board are filled for 2012. Directors accepting 3 year terms
are Ken Bourassa and Blair Kotz for Radville District, Perry Johnson Ogema/Pangman District.
Accepting a one year term is Gordon Young for the Ceylon District.
Keith Bacon, 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 2011 Audit Committee was comprised of Chairperson, Ray Barbarin, Brenda Mazer and Blair Kotz.
The committee reviews and approves the letter of engagement for the external auditor (Meyer, 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:
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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.
Ray Barbarin, Audit Committee
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