annual report - home | kingston community credit …analysis. kccu wealth solutions is a program...

16
2017 AnnualReport Y o u r Community Y o u r Credit Union

Upload: others

Post on 11-Jul-2020

1 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

2017Annual�Report

Y o u r� C o m m u n i t y�� •�� Y o u r� C r e d i t� U n i o n

Page 2: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

A n n u a l� R e p o r t� 2 0 1 7

Kingston�Community�Credit�Union's�mission�is�to�foster�the�financial�health�of�membersby�delivering�outstanding�and�affordable�financial�services�using�co-operative�principles.

To�be�the�most�trusted�financial�service�provider�and�grow�the�well-being�of�our�community.

We�value:�Co-operation:�people�helping�people,�Integrity:�always�doing�what�is�best�for�ourmembers,�Community:�commitment�to�strengthening�our�community,�Sharing:�sharing�oursuccess�with�our�community�and�members,�Financial�Strength:�building�financial�strengthwith�co-operative�and�sustainable�ethics,�Education:�sharing�our�expertise,�and�Respect�for�All.

•�Advance�effective�recruitment�and�staff�engagement•�Build�tomorrowʼs�leaders•�Communicate�effectively�and�co-operatively•�Seek�mentorship�opportunities•�Seek�collaborative�opportunities

•�Promote�our�co-operative�market�differentiation•�Improve�operational�efficiency•�Seek�opportunities�for�growth•�Improve�the�diversification�of�products�&�revenue�sources•�Share�our�profits�with�the�members�and�foster�the���co-operative�business�model

•�Build�strong�and�co-operative�relationships�with���members�and�the�community•�Engage�our�community�to�bank�with�us•�Engage�KCCU�and�staff�in�community�building•�Create�a�financial�education�strategy•�Support�our�community�charities,���co-operatives�and�not-for-profits

•�Offer�superior�personal�service•�Meet�financial�needs�for�all�life�stages•�Provide�products�for�entire�wallet•�Use�best�delivery�channels�for�every�generation•�Leverage�emerging�financial�technologies�for����our�member�services

Organizational�Growth

Financial�Strength�&Long�Term�Viability

Community�&Member�Engagement

Member�Financial�Services

Mission

Vision

Values

Page 3: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

Get the AppKCCU to Go kccu.ca

KCCU�Board�of�Directors

Report�of�the�Chair�of�the�Board�of�Directors

Report�of�the�Chief�Executive�Officer

Report�of�the�CFO/Credit�Manager

Report�of�the�Audit�Committee

International�Co-operative�Alliance�Statement�on�the�Co-operative�Identity

Community�Involvement�and�Charitable�Contribution

In�Memoriam�2017

Balance�Sheet�2017

Our�Social�Media�websites�are�also�accessible�via�our�website.�They�will�connect�you�to�KCCU�on�facebook�&�twitterIt�is�a�great�way�to�keep�in�touch�and�stay�current�withhappenings�at�KCCU�and�across�the�co-operative�system.

KCCU�encourages�members�to�join�the�electronic�mailing�list�on�our�website�to�receive�less�paper�and�help�our�environment.�You�may�unsubscribe�at�any�time.�We��stronglyencourage�members�to�“like”�us�on�facebook�or�follow�us�onTwitter�to�receive�the�latest�news�and�information.

Refer�a�friend,�apply�for�a�loan,�download�the�KCCU�app�for�Ipad�or�Android,�check�out�rates,�see�our�newest�products,�and�much�more…�Itʼs�interactive!�Now,�more�than�ever,�you�can�get�information�about�KCCU�on-line!�Visit�your�Credit�Unionʼs�interactive�website�at�www.kccu.ca�or�communicate�with�our�staff�through�e-mail�at�[email protected]

Y o u r� C o m m u n i t y�� •�� Y o u r� C r e d i t� U n i o n

Page 4: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

Robert Trentadue, retired, Purolator

Norman Meyers, retired, KGH

Lisa Dirocco, The Bay

Paul Lorenz, retired, City of Kingston – Police Dept.

Reta McCormick, retired entrepreneur

Joyce Phillip, retired, Queen’s University

Bram Fisher, retired entrepreneur

*term expires

Chair

Vice-Chair

Secretary

Director

Director

Director

Director

2019

2017*

2018

2019

2017*

2017*

2018

A n n u a l� R e p o r t� 2 0 1 7

Page 5: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

�����elcome�to�our�Annual�General�Membership�Meeting.

Our�Strategic�Plan�focuses�on�serving�our�members�and�our�community.

Our�financial�margins�continue�to�be�squeezed�and�we�need�to�find�other�financial�services�for�our�members�and�our�community�to�help�them�and�to�strengthen�our�bottom�line�as�mentioned�in�last�yearʼs�Board�Report.

I�am�sure�you�are�all�aware�that�during�2017�KCCU�successfully�expanded�the�wealth�management�services�we�have�available�to�our�membership.�Specifically�making�available�to�our�members�a�new�wealth�management�office�on�Gardiners�rd.�a�few�doors�down�from�our�West�end�branch�in�the�same�mall.

I�want�to�emphasize�that�your�credit�union�continues�to�be�very�strong�both�financially�and�from�a�socialresponsibility�perspective�even�though�we�are�considered�a�small�credit�union�compared�to�otherfinancial�institutions.

On�behalf�of�the�Board�of�Directors�I�am�pleased�to�recommend�a�3%�dividend�on�member�equity�shares,�and�a�1.45%�dividend�on�Dividend�savings.�

Finally,�I�also�want�to�thank�my�fellow�Board�members�for�their�support�and�commitment�over�the�year.�I�wish�to�thank,�Jon,�our�CEO�for�his�professional�and�inclusive�style�of�leadership�as�well�as�our�senior�management�and�staff�for�making�KCCU�the�success�that�it�is.

Respectfully�submitted,

Robert�Trentadue,Chair�KCCU�Board�of�Directors

"I�am�not�the�only�one�but�still�I�am�one:�I�cannot�do�everything�but�I�can�dosomething�and�because�I�cannot�do�everything,�I�will�not�refuse�to�do�thesomething�that�I�can�do.”�Edward�Everett�Hale�(1822�-1909)

R e p o r t o f t h e

Page 6: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

our�local��shelters,�financialliteracy�education�and�food�and�meal�support�programmes,including�Loving�Spoonfulʼs�GROW�project.��Yet�againyour�staff�made�KCCU�a�Platinum�supporter�of�theUnited�Way.���Our�relationship�and�support�for�our�localhospitals�continue�with�our�five-year�$60,000commitment�to�KGH.��KCCU�staff�entered�a�highlysuccessful�fundraising�team�in�the�We�Walk!�for�YourComfort�and�Care�in�support�of�Hotel�Dieu�Hospital,Kingston�General�Hospital�and�Providence�Care�patientcare�needs�that�are�not�met�by�the�public�system.��Just�before�Christmas,�staff�helped�donate�giant�Teddy�Bears�to�the�childrenʼs�ward�at�KGH.����Finally,�but�not�least,�the�staff�Christmas�Caring�program�collected�presents,�food�and�funds�for�those�of�our�members�that�unfortunately�fell�into�need�during�the�course�of�the�year.

We�are�only�as�good�as�the�Financial�Services�we�provide�to�our�member-owners.��In�this�area�of�strategic�focus�(Member�Financial�Services)�the�key�initiative�in�2017�has�been�adding�capacity�and�expertise�in�financial�planning�and�wealth�management�services.��In�order�to�provide�you�with�the�most�comprehensive�and�appropriate�financial�planning�and�retirement�offerings�and�advice,�we�are�both�overhauling�our�in-branch�investment�and�mutual�fund�service,�and�are�happy�to�have�our�

����our�team�at�Kingston�Community�Credit�Union�is�����happy�to�present�you�with�a�very�successful�year.����Our�2017�income�before�dividends�and�taxes�was$931,000�and�the�board�is�recommending�that�wereturn�to�you,�our�members,�$259,000�in�dividends,�up13%�on�2016.��After�taxes�this�enables�us�to�add$410,000�to�our�undivided�earnings�that�will�continuesupport�our�growth�plans�and�promote�long-termsustainability.���We�maintained�our�strong�regulatorycapital�base�now�at�10%�of�assets,�and�28%�ofrisk-weighted�assets.��Our�total�loan�portfolio�grew�8.4%to�$100.6�million.��Our�member�deposits�increased�9.8%to�$122.8�million.��Total�assets�are�up�8.1%�to�$136.8million.��Regulatory�delinquency�is�at�a�low�0.14%.��

Building�our�joint�future�is�at�the�heart�of�the�vision�in�our�Strategic�Plan�launched�two�years�ago:�to�be�the�most�trusted�financial�service�provider�in�our�catchment�area�and�grow�the�well-being�of�our�community.���In�the�Strategic�Plan�your�Board�identified�four�areas�of�focus�for�our�operations:��community�and�member�engagement,�member�financial�services,�financial�strength�and�sustainability,�and�organizational�growth.��In�2015�we�formulated�the�strategic�plan�and�in�2016�we�assessed�and�initiated�our�action�plan.��2017�was�an�eventful�year�as�we�implemented�the�key�initiatives�that�came�out�of�this�strategic�plan;�making�the�credit�union�more�accessible�to�new�members�by�reducing�the�member�share�requirement�to�$25�from�$150,�and�filling�the�key�gaps�in�our�product�and�service�offering.��In�particular,�we�expanded�the�financial�planning�and�investments�service�options�for�our�members�by�launching�KCCU�Wealth�Solutions�provided�by�Credential�Financial�Strategies.��

Our�strategic�focus�on�Community�and�Member�Engagement�is�best�exemplified�by�staff-led�involvement�and�support�of�our�communitycharities,�co-operatives,�and�not-for-profits.����Elsewherein�this�annual�report�you�will�find�all�the�organizationsthat�were�supported�in�2017.��I�would�just�like�tohighlight�for�you�the�causes�in�which�staff�wereespecially�engaged,�which�include�a�number�of�

R e p o r t o f t h e

A n n u a l� R e p o r t� 2 0 1 7

Page 7: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

Our�third�strategic�area�of�focus�is�Financial�Strength�and�Long�Term�Viability.��We�have�a�comprehensive�enterprise�risk�monitoring�program�in�place,�and�I�am�proud�to�report�that�when�the�CMHC�imposed�new�stress�test�requirements�on�insured�mortgages�late�2016,�these�were�tests�that�we�had�already�implemented�in�policy�and�practice.��We�already�ensured�that�our�borrowers�would�qualify�using�the�five-year�Bank�of�Canada�mortgage�rate�as�is�now�required�by�CMHC.��It�has�also�long�been�our�practice�to�discuss�with�all�our�mortgage�borrowers�the�impact�2%�higher�rates�could�have�on�their�financial�health.��

The�key�initiative�to�ensure�our�long-term�sustainability�was�the�reduction�in�the�minimum�member�share�requirement,�to�$25�from�$150.��This�has�removed�a�major�impediment�to�member�growth,�and�facilitated�the�recruitment�of�new�members�from�a�younger�demographic.��I�would�like�to�thank�all�of�you�for�the�time�and�care�you�took�in�responding�to�my�letter�outlining�your�options�for�your�member�shares.��It�has�been�truly�gratifying�to�read�your�responses,�and�to�see�how�many�of�you�opted�to�retain�more�than�the�minimum�share�requirement.

The�fourth�strategic�area�of�focus,�Organizational�Growth,�will�be�front�and�center�in�2018,�the�third�year�of�our�current�plan.��Your�board�is�creating�a�governance�committee�that�will�undertake�a�comprehensive�review�of�our�governance�policies�and�practices�and�of�succession�planning.��The�heart�of�the�organization�is�of�course�your�staff.��The�co-operative�difference�is�that�we�aspire�to�build�our�community,�and�promote�co-operative�values�andcollaboration�in�our�business�practices.�It�is�your�staff,�my�colleagues,�who�translateour�aspirations�into�meeting�member�needs,�into�providing�top�rate�financialservices,�into�creating�a�superior�workplace,into�building�our�community.��It�is�to�my41�colleagues�on�the�staff�that�we�owe�oursuccess�and�strong�growth�in�2017.���Their�dedication�to�you,�to�service�and�to�ourcommunity�is�exemplary.��On�your�behalf�I�offer�them�my�humble�thanks!

Respectfully�submitted,�

Jon�Dessau,�CEO

Y o u r� C o m m u n i t y�� •�� Y o u r� C r e d i t� U n i o n

2017�saw�rapid�growth�in�the�use�our�Mobile�App,�Interac�Online�Payments,�Interac�Email�Transfers�and�Interac�Flash�tap�debit.��Given�that�the�bulk�of�transactions�now�take�place�online,�we�introduced�24-hour�1-800�online�banking�telephone�support.��Technological�innovation�will�continue�in�2018�as�we�introduce�mobile�pay�and�improved�mobile�banking�alerts�to�help�keep�your�online�banking�secure,�and�on�the�product�side�we�are�introducing�a�new�and�expanded�suite�of�credit�card�options.

affiliate�KCCU�Wealth�Solutions�open�up�in�attractive�new�premises�at�Unit�5,�795�Gardiners�Road,�conveniently�adjacent�to�KCCUʼs�Gardinerʼs�Road�branch.��KCCU�Wealth�Solutions�offers�personal�investment,�retirement�and�insurance�planning�&�analysis.��KCCU�Wealth�Solutions�is�a�program�provided�by�Credential�Financial�Strategies�Inc.,�a�member�company�under�Credential�Financial�Inc.,�offering�financial�planning,�life�insurance�and�investments�to�members�of�credit�unions�and�their�communities.�

Page 8: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

reducing�barriers�to�membership�through�a�lower�share�requirement,�device�compatibility,�web�and�mobile�access,�enhanced�social�media�information�sharing�with�members,�commercial�lending,�a�new�credit�cardsolution�and�much�more.�Our�goal�is�to�finance�capacity�building�through�service�improvements�and�increased�volume�of�income-producing�assets.�It�is�clear�we�are�achieving�this�goal�and�building�a�stronger�credit�union�in�the�process.

We�are�implementing�superior�service�delivery�in�the�area�of�wealth�management�and�lending.�Our�Wealth�Management�partnership�with�a�new�office�(KCCU�Wealth�Solutions)�opened�in�November�and�we�now�have�the�means�to�continue�to�service�members�whose�needs�previously�could�not�be�met�at�KCCU.�

Recent�innovations�like�our�All-in-One�mortgage�have�also�been�popular�and�our�competitiveness�in�rates�has�directed�profitability�directly�to�members�when�they�transact�their�business.�KCCU�never�shies�away�from�delivering�superior�value�and�matching�and�beating�rates�where�and�when�it�makes�sense�to�do�so.�In�this�fashion�we�are�creating�value�for�members�which�we�expect�they�will�pass�along�to�the�next�generation�who�we�are�proving�our�relevance�to�on�a�daily�basis�while�maintaining�our�important�service�ethic�for�our�legacy�members.�

The�two�¼%�rate�increases�in�July�and�September�had�a�small�but�positive�impact�on�KCCU�and�a�minimally�disruptive�impact�on�members.�Credit�losses�before�recoveries�were�$29,000�lower�than�last�year�at�$185,261.�Recoveries�were�lower�at�$39,126�($46,294�less�than�last�year�due�to�less�outstanding�delinquency).�At�$156,135�losses�after�recoveries�were�at�their�second�lowest�level�since�2007�($128,765�last�year).�For�comparison�losses�before�recoveries�in�previous�years�were�$214,185�(2016),�$229,411�(2015),�$332,544�(2014).

In�2017�personal�loan�bad�debts�were�1.32%�(1.06%�after�recoveries)�compared�to�1.32%�(0.72%�after�recoveries)�in�2016.�In�2017�Mortgage�bad�debts�were�0.0%�compared�to�0.032%�(2016)�and�0.065%�(2015).�Write-offs�on�the�commercial�portfolio�continue�to�be�zero,�same�as�the�previous�year.�As�a�percentage�of�the�

����n�2017�KCCU�had�a�record�year�in�terms�of�dollar������growth�in�the�credit�portfolio.�The�portfolio�is�now�����over�$100�Million!�This�milestone�is�something�we�are�very�proud�of�as�it�shows�the�depth�KCCU�has�in�the�community.�

Our�annual�growth�was�led�by�mortgages�as�members�take�advantage�of�low�rates�and�put�as�much�expensive�credit�under�one�roof�as�possible�to�save�money.�What�we�appreciate�most�is�the�trust�that�they�and�the�new�members�have�placed�in�KCCU�to�provide�them�with�the�best�service,�the�best�in�class�pricing,�the�most�flexibility,�the�most�transparency�and�true�advocacy.�Our�corporate�mission�is�to�ensure�that�we�listen�and�always�keep�our�members�and�the�communityʼs�well-being�at�the�forefront�of�our�decision-making.�We�are�seeing�a�reversal�of�the�trend�which�saw�the�loans�portfolio�shrinking.�We�got�a�lot�of�new�mortgages�that�were�member�referrals�as�opposed�to�internal�conversion�of�loans�into�mortgages�which�was�our�point�of�departure�when�rates�began�to�drop�several�years�back.�

We�aspired�to�diversify�at�a�measured�pace�and�we�are�proud�to�report�that�we�successfully�increased�our�commercial�portfolio�with�extreme�care�and�due�diligence�and�now�have�like-minded�organizations�we�assist�for�the�betterment�of�the�community�without�impacting�monies�available�to�individual�members�and�their�families.

At�KCCU�we�know�that�the�health�of�all�members�is�a�reflection�of�the�health�of�our�credit�union.�So�we�encourage�saving�and�we�want�the�members�to�be�financially�literate,�save�money,�make�good�decisions�and�get�the�best�advice�from�their�most�trusted�source�predicated�on�cooperation�over�competition.�

Growth�was�strong�in�2015�and�at�record�levels�in�2016,�so�we�are�delighted�to�report�that�2017�was�our�best�year�yet!�

KCCU,�like�many�financial�institutions�went�through�a�long�period�of�low�interest�rates�and�declining�margins,�so�this�gradual�turnaround�is�the�foundation�of�our�future�and�proof�that�our�focus�on�building�capacity�in�the�area�of�wealth�management,�online�services,�

R e p o r t� o f� t h e

A n n u a l� R e p o r t� 2 0 1 7

Page 9: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

wish�to�ensure�healthy�member�dividends.�This�is�almost�three�times�our�growth�in�2016�($3.88�Million�or�3.6%).�The�breakdown�shows�Term�Deposits�contracted�by�$519,000�(compared�to�$1.66�Million�decrease�last�year).��Registered�Deposits�remained�at�the�same�level�as�the�year�before�similar�to�last�yearʼs�growth�of�$196,000�and�a�decrease�of�$1.4�Million�in�2015).�The�Wealth�Management�portfolio�increased�by�11.1%�($2.0�Million)�compared�to�last�yearʼs�increase�of�17.4%�($2.75Million).�We�have�engaged�the�services�of�an�external�consultant�as�we�fully�retool�our�wealth�management�offering�with�the�partnership�with�KCCU�Wealth�Solutions�and�a�fully�integrated�system�for�determining�the�financial�planning�needs�of�each�individual�and�what�best�suits�their�needs.�Canadian�market�performance�was�not�as�strong�in�2017�as�it�was�in�2016�and�2015�and�this�impacted�the�portfolio�size,�as�did�member�preference�at�year�end.

Co-operation,�community�and�capacity�building�are�integral�to�our�future�plan.��Respectfully�Submitted,�

David�S.�Bull,�B.A.CFO�/�Credit�Manager

*AUM�refers�to�Assets�Under�Administration.�Mutual�Funds�are�offered�through�Credential�Asset�Management�Inc.�Additional�insurance�products�and�policies�are�offered�through�Credential�Financial�strategies�Inc.�operating�as�KCCU�Wealth�solutions.�“The�best�ideas�are�common�property”.��Seneca�(5�BC�‒�65AD)

���������2016

14,397,8461,030,147

66,390,86311,561,696

1,338600

20,349,49865,664,48725,362,22018,598,037

126,403,4232,321,359

12,269

6,177,1261,810,650

23,714,18631,701,962

456148134738

14,036,9861,893,406

75,105,77910,032,891

1,357635

19,830,90177,196,05125,358,30420,644,749

136,826,4541,150,416

12,319

6,381,0421,845,250

26,972,92535,199,269

entire�credit�portfolio�($100.6�Million),�write-offs�after�recoveries�this�year�were�0.14%�compared�to�0.14%�(2016)�and�0.20%�(2015).�Data�from�the�past�ten�years�shows�an�average�of�0.22%.

This�year�the�Credit�Unionʼs�overall�credit�portfolio�increased�by�8.2%�($7.69�Million)�compared�to�5%�growth�last�year�($4.41�Million).�This�compares�to�growth�of�4.0%�in�2015�and�1.3%�in�2014.�Personal�Loans�and�Lines�of�Credit�decreased�by�$360,860,�a�big�improvement�over�the�previous�year�where�we�were�down�$1.76�Million�from�the�year�before.�Mortgages�led�our�growth�in�2017,�up�$7.2�Million�(compared�to�$5.9�Million�in�2016).�The�breakdown�for�mortgages�is�a�$8.1�Million�increase�in�Fixed�Mortgages,�a�decrease�of�$36,000�in�Collateral�Mortgages,�an�decrease�of�$865,000�in�Home�Equity�Lines.

As�of�December�31st,�2017�there�were�17�delinquentloans�over�90�days�in�arrears�representing�$145,832after�security.�This�compares�to�35�loans�representing$294,060�last�year.�

Deposit�growth�was�positive�this�year�up�9.9%,�by�$11.0�Million�led�by�demand�deposits.�This�also�explains�why�we�did�not�pursue�the�high�deposit�strategy�like�some�of�the�larger�credit�unions�with�lower�liquidity.�We�catered�our�strategy�to�our�organic�growth�patterns�to�keep�expenses�in�control�as�we�build�capacity�and�still�

���������2017

451127144722

Registered�Deposits�(RRSP,�RRIF,�TFSA)

Personal�Loans�and�Lines�of�Credit

Member�Ownership�(Equity�Shares)

Total�Loan�Applications�ReceivedTotal�Loan�Applications�Declined

Wealth�Management�AUM*

Total�Approved�Credit

Consolidated�Loans

Variable�Mortgages

Savings/Chequing

Fixed�Mortgages

Approved�Loans

Term�Deposits

Personal�LoansLines�of�Credit

Commercial

Mortgages

Deposits

Members

OtherAssets

Page 10: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

KCCU�enjoyed�another�great�year�from�an�Audit�Committee�perspective.���We�enjoyed�outstanding�internal�audit�results,�strong�controls,�solid�performance�(record�credit�growth),�increased�capacity,�expanded�wealth�and�tech�offering�for�members.���We��lowered�barriers�to�member�ship�with�the�Board's�visionary�decision�to�approve�a�reduction�in�capital�and�support�our�expansion�into�wealth.�It�was/is�a�significant�capital�investment�to�create�this�capacity�and�we�are�carrying�it�well.���We�helped�pay�for�it�with�judicious�expense�control�and�enthusiasm�for�providing�service�to�members.

On�behalf�of�my�fellow�Committee�members,�Lisa�Dirocco�and�Robert�Trentadue,�I�can�confirm�that�the�Committee�is�conducting�its�activities�in�accordance�with�the�Act�and�Regulations�and�that�management�has�implemented�allCommittee�recommendations.�There�is�still�one�small�legal�matterwhich�the�Committee�believesshould�be�reported�to�themembers�and�I�will�defer�to�legalcounsel�or�the�CFO�to�providerelevant�details.�There�are�noother�matters�which�are�required�tobe�disclosed�pursuant�to�the�Act�or�the�Regulations.��Respectfully�Submitted,�

�Norman�Meyers�Audit�Committee�Chair

Results�were�shared�with�the�Board�of�Directors;A�review�of�the�Internal�AuditPlan�and�scope;Review�of�IT�security�committee�and�IT�steering�Committee�activities;A�review�of�the�Enterprise�Risk�management�framework�which�includes�ongoing�identificationand�monitoring�of�significant�risk�to�the�Credit�Union.The�Audit�Committee�receives�quarterly�reports�from�management.

A n n u a l� R e p o r t� 2 0 1 7

A�review�of�the�Audit�Committee�Charter�to�ensure�compliance�with�the�Act�and�the�Regulations;A�review�of�the�financial�statements�and�the�year-end�audit�results�with�the�external�auditors;A�review�of�all�Audit�Examination�findings�and�the�Auditors�Management�Letter;A�review�of�the�performance�of�the�Auditors�and�their�proposed�engagement�letter;Ensuring�all�regulatory�filing�is�submitted�on�time;A�review�of�the�effectiveness�of�the�internal�audit�practice�and�internal�auditor;A�review�of�the�effectiveness�of�the�Audit�Committee�in�carrying�out�its�duties;A�review�of�the�Credit�Unionʼs�policies,�procedures,�and�controls�for�legislative�compliance;A�review�of�the�Business�Continuance�Plan;Monitoring�the�adherence�of�Directors,�Officers,�and�employees�with�the�Credit�Unionʼs�policies�and�code�of�conduct;A�review�of�any�outstanding�legal�issues;�A�review�of�accounting�issues;A�review�of�director�and�officer�expense�claims;Annual�performance�review�of�the�CEO;The�Committee�ensured�each�Director�completed�the�Directorʼs�Training�and�Qualification�self-Assessments;Results�were�confirmed,�gaps�and�trainingrequirements�and�programmes�were�identified;�

����he�Audit�Committee�meets�quarterly�to�review�����interim�financial�statements,�internal�controls�and�����audits.�The�Audit�Committeeʼs�role�is�to�review�the�financial�information�and�reporting�processes�which�management�and�the�Board�have�established�and�their�associated�risks�and�controls.�The�Audit�Committee�maintained�open�communications�between�internal�and�external�auditors,�directors�and�management.

During�the�four�times�the�Audit�Committee�met�during�the�2017�fiscal�year�the�following�key�activities�were�undertaken;

R e p o r t o f t h e

Page 11: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

Co-operatives�are�democratic�organizations�controlled�bytheir�members,�who�actively�participate�in�setting�theirpolicies�and�making�decisions.�Men�and�women�servingas�elected�representatives�are�accountable�to�themembership.�In�primary�co-operatives,�members�haveequal�voting�rights�(one�member,�one�vote)�andco-operatives�at�other�levels�are�also�organized�in�ademocratic�manner.

Co-operatives�are�voluntary�organizations,�open�to�allpersons�able�to�use�their�services�and�willing�to�accept�theresponsibilities�of�membership,�without�gender,�social,racial,�political�or�religious�discrimination.

2nd�PRINCIPLE:

1st�PRINCIPLE:

The�co-operative�principles�are�guidelines�by�whichco-operatives�put�their�values�into�practice.

Co-operatives�are�based�on�the�values�of�self-help,self-responsibility,�democracy,�equity�and�solidarity.�In�thetradition�of�their�founders,�co-operative�members�believein�the�ethical�values�of�honesty,�openness,�socialresponsibility�and�caring�for�others.

A�co-operative�is�an�autonomous�association�of�personsunited�voluntarily�to�meet�their�common�economic,�socialand�cultural�needs�and�aspirations�through�a�jointly-ownedand�democratically�controlled�enterprise.

3rd�PRINCIPLE:

Members�contribute�equitably�to,�and�democraticallycontrol,�the�capital�of�their�co-operative.�At�least�part�ofthat�capital�is�usually�the�common�property�of�theco-operative.�Members�usually�receive�limitedcompensation,�if�any,�on�capital�subscribed�as�a�conditionof�membership.�Members�allocate�surpluses�for�any�of�thefollowing�purposes:�developing�their�co-operative,�possiblyby�setting�up�reserves,�part�of�which�at�least�would�beindivisible,�benefitting�members�in�proportion�to�theirtransactions�with�the�co-operative,�and�supporting�otheractivities�approved�by�the�membership.

4th�PRINCIPLE:

Co-operatives�are�autonomous,�self-help�organizationscontrolled�by�their�members.�If�they�enter�to�agreementswith�other�organizations,�including�governments,�or�raisecapital�from�external�sources,�they�do�so�on�terms�thatensure�democratic�control�by�their�members�andmaintain�their�co-operative�autonomy.

5th�PRINCIPLE:

Cooperatives�provide�education�and�training�for�theirmembers,�elected�representatives,�managers,�andemployees�so�they�can�contribute�effectively�to�thedevelopment�of�their�cooperatives.�They�inform�thegeneral�public�̶�particularly�young�people�and�opinionleaders�̶�about�the�nature�and�benefits�of�cooperation.

6th�PRINCIPLE:

Co-operatives�serve�their�members�most�effectively�andstrengthen�the�co-operative�movement�by�workingtogether�through�local,�national,�regional�and�internationalstructures.

7th�PRINCIPLE:

Co-operatives�work�for�the�sustainable�development�of�theircommunities�through�policies�approved�by�their�members.

Page 12: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

•�Afro-Caribe�Community�AssociationAlzheimerʼs�Society�Kingston�Frontenac•�Autism�Ontario,�Kingston�Chapter•�Community�Living�Kingston•�CUPE�Local�1974�Charity�Golf�Tournament•�Cycle�Kingston�‒�Commuter�Challenge•�Dawn�House•�Domino�Theatre•�Dress�for�Success•�Farmersʼ�Market�Association•�Financial�Literacy•�Greater�Kingston�Jr.�Frontenacs•�K3C�Credit�Counselling•�Heart�Pillows�(KGH�auxiliary)•�Heart�&�Stroke�Foundation•�Hotel�Dieu�Food�Blitz•�Horizons�of�Friendship•�International�Credit�Union�&�Co-op�Week•�KCCU�Christmas�Caring�Program•�KCCU�Coop�Leadership�Scholarships•�KCVI�‒�DECA•�KGH�Walk�for�Comfort�and�Care•�Kingston4Paws•�Kingston�General�Hospital•�

In�2017,�KCCU�partnered�with�local�member�organizations,also�gave�to�several�charitable�organizations�in�kindthrough�service�charge�reductions�and�volunteerism�byindividuals�as�well�as�the�KCCU�Christmas�Caring�Programwhich�this�year�assisted�many�individuals�and�organizationswith�time,�food�and�gifts�for�community�members�facingdifficult�times�over�the�holidays.”���

�����CCU�has�its�roots�as�a�small�credit�union�for�Kingstonʼs������civic�employees.�It�was�incorporated�on�October�28,������1957,�evolving�into�to�its�present�form�in�1974�as�an�open�bond�community�credit�union.�Based�upon�the�seven�co-operative�principles,�the�mission�statement�and�operating�objectives�of�the�credit�union�have�always�been�focused�around�financial�strength,�caring,�respect,�cooperation�and�community.

KCCU�advocates�for�its�members�and�its�community.�Our�identity�reaches�out�from�a�platform�of�high�corporate�ethics,�transparency,�social�justice�and�co-operation�at�the�heart�of�our�identity�as�members�and�individuals.�KCCU�continues�to�believe�in�being�a�triple�bottom�line�organization�that�balances�financial�stability,�profitability�and�community�ensuring�the�benefit�to�members�is�felt�outwardly�and�sustainably.��There�is�a�proud�tradition�of�co-operative�business�ethics�and�a�commitment�to�continually�demonstrate�our�mission�which�includes�advocacy,�mentoring,�charitable�achievement,�environmental�sustainability,�

Kids�for�Kids�Hockey�Tournament•�Kingston�Canadian�Film�Festival•�Kingston�Community�Health�Centres•�Kingston�Humane�Society•�Kingston�Interval�House•�•�Kingston�School�of�ArtKingston�Symphony•�Loving�Spoonful�•�Marthaʼs�Table•�McHappy�Day�Charity�(Ronald�M�House)•�•�Music�in�the�SquareMusic�in�the�Gardens�‒�City�of�Kingston•�Ontario�Co-operative�Association�•�Ontario�Credit�Union�Charitable�Foundation•�Partners�in�Mission�Food�bank•�Peace�Quest•�Pitch�in�Kingston•�Poppy�Trust�Foundation•�Seniors�Association�(Kingston�Region)•�Sirens�for�Life•�Skeleton�Park�Music�Festival•�The�United�Way�of�KFLA•�University�Hospitals�Kingston�Foundation•�YMCA�Summer�Camp�Program•�

A n n u a l� R e p o r t� 2 0 1 7

community�support,�innovation,�marketing,�compassion�and�outstanding�member�service.

In�2017,�staff�continued�their�community�volunteerism�in�many�new�and�traditional�charitable�activities,fund�raisers�and�events�such�as�Earth�Day�Pitch-incommunity�cleanup,�the�KGH�Walk�for�Comfort�&�Care,The�Memorial�Centre�Farmerʼs�Market,��Dawn�HouseCharity�BBQ,�Book�Sale�for�Kingston4Paws,�Cupcake�dayfor�Humane�Society,�Lemonade�Stand�to�raise�funds�forAlzheimerʼs�Society,�Bake�Sale�for�Loving�SpoonfulʼsGrow�program,�Stockings�for�Youth�at�Interval�House,Hat�Mitt�&�Sock�Drive�for�St�Vincent�de�Paul,�and�manyother�charities�and�fundraising�events,�we�and�our�stafffelt�helped�make�Kingston�and�the�surrounding�area�abetter�place�to�live�in.

We�continue�to�help�members�of�the�community�through�the�Christmas�Caring�Program,�made�up�of�staff�volunteers�who�helped�benefit�members�experiencing�hardship�as�well�as�community�partner�

•�Bayridge�Secondary�SchoolEcole�Secondaire�Marie�Rivier�•�Ecole�Secondaire�Milles�Iles•�Ernestown�High�School•�Frontenac�Secondary�School�•�Holy�Cross�Catholic�Secondary�School�•�Kingston�Collegiate�Vocational�Institute•�LaSalle�High�School•�Loyalist�Collegiate�Vocational�Institute•�Queen�Elizabeth�Collegiate�Vocational�Institute•�Regiopolis-Notre�Dame�Catholic�High�School•�Rideau�District�High�School•�St.�Lawrence�College�Foundation•�St.�Peter�Catholic�School•�Sydenham�High�School•�

Page 13: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

����s�part�of�the�Co-operative�Movement,�KCCU�supports�����promoting�the�co-operative�business�model�in�the�����education�system�to�encourage�youth,�the�future�leaders�in�the�credit�union�system.

Since�1989,�KCCU�has�been�offering�this�scholarship�to�deserving�young�co-operators.�KCCU�itself�is�a�past�winner�of�the�prestigious�provincial�Nova�award�for�Youth�Involvement�from�the�Credit�Union�system.�

KCCU�encourages�and�assists�young�persons�who�exhibit�qualities�of�leadership�by�example�with�this�scholarship�‒�It�is�given�to�the�student�at�each�local�high�school�who�is�the�kind�of�person�who�uses�co-operation�as�a�way�to�bring�people�together�to�accomplish�a�common�goal.��KCCU�has�won�awards�for�promoting�youth�involvement,�education�in�the�local�community�and�co-operation.��The�winners�of�these�scholarships�are�individuals�who�may�become�the�co-operative�business�modelʼs�leaders�of�tomorrow.

Many�awards�are�given�for�high�marks,�but�regular�students�who�do�extraordinary�things�are�the�ones�who�most�need�our�praise�and�encouragement.�They�are�the�ones�we�anticipate�will�be�the�recipients�of�this�award.

The�KCCU�“Leadership�Through�Co-operation”�Scholarship�is�given�to�the�student�at�each�of�the�local�high�schools�as�well�as�St.�Lawrence�College,�who�in�the�

organizations.�Nine�families�were�assisted�this�year�with�food,�necessities�and�gifts�for�the�children.�Staff�and�volunteers�assist�in�the�shopping,�preparation,�wrappingand�distribution�of�the�food�and�gifts�from�the�heart�tothose�who�need�it�most�as�nominated�by�othermembers.

Support�from�staff,�Board�and�members�helps�ensure�that�“Christmas�Caring”�makes�a�difference�in�our�community�as�it�has�since�its�inception�some�twenty�five�years�ago.

We�are�very�proud�of�KCCU�which�has�grown�from�humble�beginnings�in�thebasement�of�City�Hall�some�55�years�ago�with�some�25�employees�each�puttingin�50�cents�into�what�is�now�a�$150�Million�democratic�financial�serviceco-operative�(Credit�Union)�with�over�12,000�members,�four�brancheswith�an�outstanding�record�of�community�service�and�member�advocacy.

•�Riley�Wales��Bayridge�Secondary�School�•�Michael�Scott��Ecole�Marie�Rivier

•�Mickael�Broly��Ecole�Mille-Iles

•�Claudia�Thomas��Ernestown�Secondary�School

•�Abby�Ross��Frontenac�Secondary�School•�Grace�Ottenhof��Holy�Cross�Secondary�School•�Jack�Little��Kingston�Collegiate�&�Vocational.�Institute•�Vista�Behjat��Kingston�Collegiate�&�Vocational.�Institute•�Nathan�Raby��Lasalle�Secondary�School•�Gordon�Bardell��Loyalist�Collegiate�&�Vocational.�Institute•�Trayanna�Abrams��Queen�Elizabeth�Collegiate�&�Vocational.�Institute•�Suha�Osman��Regiopolis�Notre�Dame

•�Alexis�Lyons��Rideau�District�High�School•�Chloe�Houston��St.�Lawrence�College

•�Tanner�Ashusrt��Sydenham�Secondary�School

eyes�of�his�or�her�school�selflessly�promoted�the�good�of�the�group,�over�themselves�thereby�setting�anexample�of�the�virtues�and�benefits�of�co-operating�to�achieve�a�common�goal.�Over�the�past�twenty-six�years�some�380�of�these�silent�heroes�have�received�the�scholarship,�often�getting�little�or�no�recognition�but�having�made�a�significant�positive�influence�on�their�peers.�

Congratulations�to�this�yearʼs�winners,�in�addition�to�receiving�a�$250�scholarship,�each�of�these�studentʼs�names�has�been�proudly�displayed�on�the�Award�Plaque�with�the�emblem�of�their�school�and�KCCU�and�past�winners�at�their�school�for�years�to�come.�

Page 14: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

A n n u a l� R e p o r t� 2 0 1 7

Schmidt,�AndrewSherman,�AllisonSmart,�Robert�Speight,�KennethStevenson,�AlexanderStorey,�PhoebeStratuik,�CarolynTang,�EarlThomas,�BettyUsher,�EdaWinterstein,�William�KentWipfl,�KarlWoodcock,�Edward�Albert

Johnson,�MarianneJohnston,�LorneJohnston,�RobertLarocque,�MarionLawlor,�Hermina�McAllister,�Alice�MarthaMcKeown,�Michael�Moore,�Donald�‒�Founding�member

Moran,�JodiMurray,�Robert�JamesNatalizio,�PatriciaNelson,�Eric�����Nicholson,�KenPalmer,�MelPrice,�HenryPrice,�MelRaper,�StanRidgley,�EdwardRobinson,�Deborah�����������������������Rollins,�Robert

Austin,�PatriciaBaxter,�Anna�LynnBeseau,�EdwardBlowing,�ImeldaBoomhour,�Edward�Brooks,�RubyByer,�MaureenCahill,�Annie��Cambridge,�CecilCarr,�EileenClayton,�Donald���������������Coleman,�Jack�Collins,�ShirleyDow,�FloydDukelow,�Rosemary�Edmund,�CarolHartson,�MaryGreen,�ArnoldJack,�LindaJansen,�Hans�����������������������������������

Page 15: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

2016

Kingston�Community�Credit�Union�Limited�Statement�of�Financial�Position

$�5,687,00627,644,94092,759,601

400,412119,504

�-$126,611,463

$111,880,967451,709228,492

2,321,35916,935

114,899,462

11,502,796209,205

11,712,001�$126,611,463

2017

$�6,353,43529,227,875

100,593,354530,66576,34344,782

$136,826,454

$122,830,984�464,511258,684

1,150,416-

124,704,595

12,115,4666,393

12,121,859�$136,826,454

Director

Director

Accumulated�other�comprehensive�income�

Liabilities�and�Members'�Equity

Property,�plant�and�equipment�(Note�5)

Dividends�and�interest�rebate�payable

Cash�and�cash�equivalents��(Note�2)�

Deferred�income�tax�(Note�7)�

Membership�shares�(Note�10)Deferred�income�tax�(Note�7)

Reserves�and�members'�equity�

Member�deposits�(Note�8)�Other�liabilities�(Note�9)

Member�loans�(Note�4)�Investments�(Note�3)�

Other�assets�(Note�6)

On�behalf�of�the�Board:

Members'�Equity

December�31

Liabilities

Assets

Page 16: Annual Report - Home | Kingston Community Credit …analysis. KCCU Wealth Solutions is a program provided by Credential Financial Strategies Inc., a member company under Credential

We�celebrate�our�success,�as�together�we�havebuilt�more�than�just�a�credit�union.��We�havebuilt�a�foundation�of�cooperation�and�friendship.

A n n u a l� R e p o r t� 2 0 1 7