2015 Annual Report

Building for Tomorrow

About UsWe are a growing and innovative credit union!

Credit unions are unique in how they conduct business and serve their members. Why? Because we are guided by the Co-operative Principles - seven internationally accepted Co-operative Principles that shape credit union business decisions and governance.

We are financially strong - with assets of over $500 million and over $700 million in total funds under administration.

We serve over 8,800 members - and when we serve them, we are committed to providing excellent member service by offering solutions and advice centered around you.

We are a full service financial institution - from loans to investments, everyday banking to financial planning, and everything in between, we have you covered.

We are member-owned - because our members are also our owners, our members always come first. As an owner you have a say in how your credit union is run.

Profits have a higher purpose - they’re returned to you in the form of bonuses and rebates, great rates and better service, and put back into the communities where you live and work to do good.

We are local - we have branches in Weyburn, Lang and Yellow Grass. We are proud to be a large community employer and provide employment to approximately 85 local people.

Thank you for being a member and part of the credit union movement.

We do everything a bank does, only better; if banks were ice cream cones, we’d have sprinkles!

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Message from Board President and CEO 3Order of Merit 4Board of Director Service Award 5Vision, Mission, Values and Principles 6Corporate Governance and Structure 8Weyburn Credit Union Staff 14Community Involvement 16Minutes of 71st WCU Meeting 18Management Discussion and Analysis 23Credit Union Market Code 33Auditors Report and Financial Statements 35

Table of Contents

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Building for the Future

Most importantly, thank you to the members for your continued support and trust in WCU. We appreciate your business very much and will continue to work hard to be your first choice for all your financial needs.

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Message from the Board President and the CEO

Challenging and Successful.

The year 2015 was once again a successful and a challenging year for Weyburn Credit Union (WCU). As the 8th

largest credit union in Saskatchewan, we are pleased to report that your Credit Union achieved strong financial results. WCU’s total funds under administration increased by 5.73% bringing the total amount administered to over $709 million. Capital levels increased, high efficiency levels were maintained, and loan delinquency remained low. Total comprehensive income increased to $3.5 million from $3.4 million in 2014.

Last year, many projects were completed that led to improvements in member service and/or business operations. Some of the member service improvements were the implementation of contactless debit cards, Deposit Anywhere, and website and mobile app upgrades. In terms of operations the provincial courier bag service was replaced with a digital service, work started on implementing enterprise content management, and the organizational structure was updated.

The main challenges that WCU continues to face are in the areas of increasing competition, rising consumer expectations, escalating regulation requirements, increasing taxes, and decreasing margins. In 2015, Board and management spent time discussing how we have operated in the past and how we must change how we operate going forward to continue to be a strong and viable credit union. Therefore, last year was a year of planning - a very exciting year as we mapped out the work that must be completed over the next two to three years.

The focus of our future work will be repositioning the Credit Union in the market and continuing to improve on our members’ overall service experience. The plan is to update and refresh our branding and our website. The website will become a virtual branch. Changes will be made to our branch service delivery model to improve service and relationship building. We want to make it easier, more convenient, and more secure for members to do business with us. Branches will move away from transactions and become advice and solution centres. Lastly, we want to improve how we communicate and engage with our members and the community.

The one area that will not change is our belief that our employees are key to our success. Either behind the scenes or on the front line, having employees that are local, knowledgeable, concerned, and caring will make the difference. We will continue to train and develop our staff to better serve members.

We want to thank the management and staff of WCU for the contributions, dedication, and support they provide. As well, we want to acknowledge the leadership and guidance provided by the Board of Directors. All of these people work hard to make your Credit Union strong.

Most importantly, thank you to the members for your continued support and trust in WCU. We appreciate your business very much and will continue to work hard to be your first choice for all your financial needs.

Respectfully,

Norman Wall Don ShumlichBoard President Chief Executive Officer

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Order of Merit

The Saskatchewan Credit Union Director Recognition Program recognizes elected officials who have demonstrated a significant contribution to the Saskatchewan credit union system. A Saskatchewan credit union may induct one Board member, past or present, annually to the Saskatchewan Credit Union Director Book of Honour and present them with an Order of Merit.

The recipient is determined based on the award program criteria as follows:

• A record of exemplary service to a Saskatchewan credit union

• Demonstrated leadership and an understanding of and commitment to co-operative principles

• A positive public profile that reflects favourably on the credit union and the local community.

Weyburn Credit Union would like to recognize the hard work and dedication of Gary Beck to the credit union system and his community. Gary has been a director in the credit union system since 1972 where he started with Lang Credit Union. He was the president for 22 years and moved to a director position in 1999 when they amalgamated with Weyburn Credit Union. He has dedicated 44 years to the system and seen many developments and changes along the way.

This prestigious award will be presented at the Weyburn Credit Union Annual Meeting on April 20, 2016.

Gary Beck

PAST RECIPIENTS OF THE ORDER OF MERIT:

2014 – Robert Williamson (posthumously)

2012 – Quinton O. Patrick

2011 – Ron Milleker

2010 – Lloyd Soroka

2009 – Eliford Mott (posthumously)

2008 – Mel Eggum

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Randy was born and raised in Kandahar, Saskatchewan. He received a Bachelor of Science in Agriculture Mechanics at the University of Saskatchewan and subsequently moved to Weyburn for employment with Saskatchewan Agriculture.

Randy and his wife Linda have two children. Their son Craig and his wife Kami live in Regina and have three children. Craig is employed with SaskPower. Their daughter Jill and her husband Grant reside in Saskatoon and have two children.

Randy and Linda have lived in Weyburn for over 40 years. Randy is now retired from Saskatchewan Agriculture. Linda is retired from Weyburn Co-op. They keep busy with their home and yard as well as enjoying their grandchildren. Randy operates a small farming operation and enjoys curling in the winter months.

Randy has served as a member of the Board of Weyburn Credit Union for 25 years. Over that time he has served on various committees of the Board, and has served in all three of the executive positions of the Weyburn Credit Union Board, including 5 years as President. He looks forward to continuing this representation and enjoys his involvement with Weyburn Credit Union and as a delegate to the provincial credit union system.

Joleen Tuchscherer was born and raised in Weyburn. She has been employed with the City of Weyburn for the past nine years, currently as the Human Resources Manager.

Joleen attended the University of Regina where she received her Bachelor of Arts Degree majoring in Sociology and Geography in 2007. She has continued her studies acquiring her Certificate in Local Government from the University of Regina, Payroll Practitioner designation from the Canadian Payroll Association and currently working towards her Human Resources and Labour Relations Degree through the University of Athabasca.

Joleen is very active volunteering throughout our community and has been involved with many organizations such as the Weyburn Gold Wings hockey organization, the Weyburn Skating Club, and the Heart and Stroke Association. Her dedication to the community was recognized when she was presented with the Investor’s Group Young Woman of Distinction Award in 2009.

Joleen enjoys spending time with family, socializing with friends and travelling.

Joleen is grateful for the opportunity to have served the Weyburn Credit Union on the Board of Directors!

Randy Vopni25 YEARS

Joleen Tuchscherer 3 YEARS - RETIREMENT

Board of Director Service Awards

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our VALUESHonesty and IntegrityRecognizing the importance of transparency in our business practices, we are open and upfront in our communication. We are trustworthy and accountable, and adhere to the highest standards of professionalism and confidentiality. Everyone is treated with dignity and respect.

ExcellenceWe are committed to providing the highest quality of service, products, and advice. We do this by creating an innovative and inspiring environment that supports continuous learning. We hire people who display a desire for professional growth and excellence in their daily work.

SharingWhen fiscally prudent, we share our profits with our members, our employees, and our community. Teamwork allows us to share our ideas, enthusiasm, and positive attitudes with members, coworkers and system partners, ensuring an organization that is truly collaborative. We share our time as an organization and as individuals, contributing to a wide range of community projects and activities.

CooperationWe are guided by the cooperative principles of voluntary and open membership, democracy, economic participation, independence, continuous education, cooperation among cooperatives, and concern for community. These principles set us apart in the financial industry. LeadershipStrong leadership is provided at all levels of this organization. We are committed to the sound business practices that reflect our core values. Financially responsible decisions ensure a successful, stable credit union.

our MISSIONWeyburn Credit Union will:

• Provide distinctive financial solutions at competitive rates.

• Create delighted, profitable, lifetime relationships, where the people of our community choose our credit union as their primary financial institution.

• Remain a strong, profitable, progressive organization.• Provide employees with an environment and

opportunities that enrich their personal and professional lives.

• Commit to making a positive impact on our community, socially, economically, and environmentally.

our VISIONWeyburn Credit Union’s

vision is to be the financial institution of choice.

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the CO-OPERATIVE PRINCIPLESCredit unions are unique in how they conduct business and serve their members. Why? Because we are guided by the Co-operative Principles; seven internationally accepted Co-operative Principles that help shape credit union business decisions and governance.

Voluntary and Open MembershipCo-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

Democratic Member Control Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.

Member Economic Participation Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

Autonomy and Independence Co-operatives are autonomous, self-help organizations controlled by their members. If they enter to agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.

Education, Training and Information Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.

Co-operation among Co-operatives Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

Concern for Community Co-operatives work for the sustainable development of their communities through policies approved by their members.

Voluntary and Open Membership1

2345

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Democratic Member Control

Member Economic Participation

Autonomy and Independence

Education, Training and Information

Co-operation among Co-operatives

Concern for Community

the 7 CO-OPERATIVE PRINCIPLES

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The governance of Weyburn Credit Union is anchored in the co-operative principle of democratic member control. The Board of Directors is ultimately responsible for ensuring that the Credit Union is managed and operated in a sound and prudent manner. Management is responsible to oversee the operation of the Credit Union through board-approved plans and polices.

BOARD OF DIRECTORS PHOTO

Back: Randy Vopni, Jeff Richards, Norman Wall

Front: Gary Beck, Lynn Colquhoun, Joleen Tuchscherer, Rod Nieviadomy, Rob Ror

Missing: Kelly Linnell

Corporate Governance & Structure

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Board of Directors

MANDATE AND RESPONSIBILITIES

The Board is responsible for the strategic oversight, business direction, and supervision of management of Weyburn Credit Union. In acting in the best interests of the Credit Union and its members, the Board’s actions adhere to the standards set out in The Credit Union Act 1998, the Standards of Sound Business Practice, and other applicable legislation.

BOARD COMPENSATION

The Executive Committee annually reviews directors’ compensation and makes recommendations to the Board of Directors to ensure it remains competitive with other similar asset sized provincial credit unions. In 2015, the aggregate remuneration paid to all directors for their services for the year was $51,437 (2014 - $56,500). Travel expenses for 2015 paid by the Credit Union on behalf of directors were $28,384 (2014 - $28,284). WCU covers Board out-of-pocket travel expenses.

BOARD COMPOSITION

The Board is comprised of nine directors, all of whom are independent. Directors are elected by the membership for three-year terms. There is no limit to director tenure. The Nominating Committee has oversight responsibility for director nominations and the election of directors is in accordance with bylaws and policies. Voting is by paper ballot during in-branch elections and election results are announced at the Credit Union’s 2015 Annual General Meeting.

The duties and responsibilities of the Board are outlined in detail in Credit Union policy. The following is a summary of these responsibilities:

• Establish and update the vision, mission, values, objectives and policies of the Credit Union

• Select and employ the Chief Executive Officer (CEO) as well as determine his/her responsibilities, duties, and compensation

• Maintain good public and member relations

• Establish and approve plans• Ensure that services of the

Credit Union are adequately serving the needs of the members and non-members

• Review and appraise results• Be accountable to the

membership for directing the affairs of the Credit Union through the establishment of objectives and policies that will provide for the needs of the members and safeguard the assets of the Credit Union.

• Authorize budgets and expenditures

• Perform responsibilities required by legislation

• Attend all Board meetings• Maintain a favorable Credit

Union image (confidentiality)• Review the performance of

the Chief Executive Officer• Review and approve the

strategic plan, annual business plan, and budgets

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Audit and Risk Committee is comprised of four directors and is responsible for overseeing the financial reporting process, financial statements, internal and external auditors, and risk management.

The Committee members are:• Joleen Tuchscherer (Chair)• Lynn Colquhoun• Rod Nieviadomy• Randy Vopni

Audit and Risk Committee

Nominating Committee is comprised of four directors and is responsible for overseeing the nomination and election processes for directors.

The Committee members are:• Jeff Richards (Chair)• Rob Ror• Randy Vopni • Norman Wall

Nominating Committee

Conduct Review Committee is comprised of four directors, none of which may be the chair of the Board.

The Committee members are:• Rob Ror (Chair)• Kelly Linnell• Jeff Richards• Randy Vopni

Conduct Review CommitteeThe Committee ensures Weyburn Credit Union acts with the full integrity and objectivity of its directors and employees, by having in place policies, processes, and practices that protect people and the organization from claims and from the perception of unfair benefit or conflict of interest.

BOARD COMMITTEES

The responsibilities of the board of a modern financial services organization involve an ever-growing list of duties. Weyburn Credit Union maintains a number of committees comprised of directors. This partitioning of responsibilities enables a clear focus on specific areas of activity vital to the effective operation of the Credit Union.

The Board has established five standing board committees to assist in carrying out board responsibilities. Each committee has a board-approved profile outlining its purpose and responsibilities. Each committee is comprised of directors appointed by the Board for a one-year term. Committees meet throughout the year and provide meeting minutes and reports to the board. The Board is also involved in the Credit Union’s Community Fund Committee. Board members also volunteer to be on the Scholarship Committee.

Executive Committee is comprised of three directors and is responsible for acting on behalf of the Board on matters that are required to be dealt with between board meetings as may be required on matters that

The Committee members are:• Norman Wall, President (Chair)• Gary Beck, 1st Vice President• Rod Nieviadomy, 2nd Vice President

The Executive Committee

can be delegated by the Board. The other duties of the Committee are to provide orientation and mentorship to new directors, provide governance oversight, and review and recommend policy changes to the Board.

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Scholarship Committee is comprised of three volunteer members of the Board. The Committee is responsible for reviewing and scoring scholarship applications from the high schools within the

The Committee members are:• Lynn Colquhoun• Jeff Richards • Joleen Tuchscherer

Scholarship Committee

communities we serve. The scoring is based on three areas: community involvement, academic grades, and school involvement.

BOARD EVALUATION

The Board completes individual director, Board, and president appraisals twice a year. The data is consolidated and presented to the Executive Committee for review and discussion. The information is then shared with the entire Board. Performance evaluations enable the Board to formally review its effectiveness and establish goals for improvement, as well as identify development opportunities.

DIRECTOR TRAINING

Weyburn Credit Union has a Director Development Policy in place. The policy covers the training, education, and development of Directors so that they are better able to fulfill their responsibilities. Director development may be obtained by attending meetings, conferences, and education sessions. The Credit Union Director Achievement program through CUSource is the Credit Union’s main source of education for directors. In 2015, the aggregate cost for director professional development for the year was $6,610 (2014 - $7,735).

Community Fund Committee is comprised of two members of the Board, two members of management, and two members of staff. A fund is established to help sponsor local events or projects in the communities that Weyburn Credit Union serves. The goal of the fund is to focus on strategic sponsorship opportunities that align with our goals, vision, mission, and core values.

The Committee members are:• Gary Beck (Chair – Board Member)• Rod Nieviadomy (Board Member)• Lois Adam (Staff)• Don Baillie (Staff)• Jeff Hayward (Management)• Pam Stables (Management)• Tana Torkelson (Committee Resource)

Community Fund Committee

Human Resources Committee is comprised of four members of the Board and is responsible for overseeing management and staff compensation and benefits, as well as recommending the human resource budget to the Board.

The Committee members are:• Lynn Colquhoun (Chair)• Kelly Linnell• Rob Ror• Joleen Tuchscherer

Human Resources Committee

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NAME OCCUPATION ATTENDANCE YEARSOF

SERVICE

TERM EXPIRES

BoardMeetings

Committee Meetings/Planning Session

Lynn Colquhoun Teacher/RCSSD Coordinator

15/15 Audit & Risk 4/4Human Resource 1/1Scholarship 1/1Planning Session 1/1

3.00 2016

Rod Nieviadomy2nd Vice President

Journeyman Welder & Machinist/Teacher

14/15 Executive 11/11Audit & Risk 3/4Community Fund 3/3Planning Session 1/1

7.00 2016

Joleen Tuchscherer

HR Manager 11/15 Audit & Risk 4/4Human Resource 1/1Scholarship 1/1Planning Session 1/1

3.00 2016

Randy Vopni

Retired – Ag Services 14/15 Audit & Risk 4/4Conduct Review 4/4Nominating 4/4Planning Session 1/1

25.00 2017

Norman WallPresident

Ag Services 15/15 Executive 11/11Nominating 4/4Planning Session 1/1

11.50 2017

Jeff Richards

Management – Education

14/15 Conduct Review 4/4Nominating 4/4Scholarship 1/1Planning Session 1/1

2.00 2017

Gary Beck1st Vice President

Grain/Livestock Producer

12/15 Executive 11/11Community Fund 2/3Planning Session 1/1

45.00WCU-17.25Lang-27.75

2018

Kelly Linnell

Regional Housing Operations - Area Manager

12/15 Conduct Review 4/4Human Resource 1/1Planning Session 1/1

1.00 2018

Rob Ror

Retired - SaskTel 12/15 Conduct Review 4/4Human Resource 1/1Nominating 4/4Planning Session 1/1

7.00 2018

DIRECTORS AND ATTENDANCE

The Board holds eleven regular board meetings and one strategic planning session each year. In addition to regular board meetings, directors attend special board meetings, the annual general meeting, and directors serve on one or more of the five standing board committees. As well, directors may be asked to participate in other Credit Union committees.

Board members are expected to attend all board and committee meetings. Directors who miss three consecutive meetings of the board or one third of the total annual regular meetings without just cause will be removed from the board.

The following chart lists the Credit Union’s directors, their occupation, their board position, their years on the board at Weyburn Credit Union and at other credit unions, their attendance, and the year in which their term expires. The President, 1st Vice President, and 2nd Vice President are on the Executive Committee.

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EXECUTIVE MANAGEMENT

Executive Management is responsible for managing, monitoring, and controlling Weyburn Credit Union operations in accordance with legislation, the Standards of Sound Business Practice, and Board policy. Weyburn Credit Union has an experienced executive management team. The executive management team and structure is as follows:

CEODon Shumlich

VP OF FINANCEKrista Hayward

VP OF LENDING Randy Geisler

VP OF RETAILJeff Hayward

VP OF COMPLIANCE AND RISKCory Fiesel

AVP OF HUMAN RESOURCES Val Ness

AVP OF MARKETING Tana Torkelson

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Our TeamADMINISTRATIONDon Shumlich Kim KlassenElise Haines Tara Kaip

COMPLIANCE & RISKCory Fiesel Shelley HippeAmanda Kopec

DEVELOPMENTValerie NessDon BaillieKaren BeckerAshley BetkerBikram SandhuColleen RoettgerManny OfallaRhonda FradetteWally Cameron

FINANCEKrista Hayward Brooke CharltonPamela AndersonAmy Furgason Cheyla Vilcu Jodie Schneider Juliet Ostrea Lois AdamMarnel SpencerStacey Cameron

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LOANSRandy GeislerGreg HappStephanie LangVirginia KellnAndrea Stepp Charles Ries Cheryl Krowicki Grant Risling Haley Bousfield Jim Paul Julie Ursu Kay Appelquist Kelly Johnson Marcy Heimlick Marie Ballenas Marliss Gilchrist Michelle Lokken Rena Chicoine Ryan Bader Tamara Murray Tanisha Quintyn

MARKETINGTana Torkelson

RETAILJeff HaywardJoanne Paulhus Laura PelechatyMichelle FerrisPam StablesAmanda Leibel Brenna Bourassa Carrie Gulash Courtney Sandiford Danielle Knoll Jenna Kater Jennifer Isaak Jennifer Matyjanka Kaitlyn Harrison Katrina Guest Kelley Neiszner Kelly Prochinsky Kelsey Bell Krista Reinfelds Leah Duthie Megan Eberts Megan Paxman Melissa Bocian Paige Killian Simone Everett Vanessa Lanktree

LANG BRANCH Donna Rooney Christine TaylorCynthia BeckSarah AngellTina Ward

YELLOW GRASS BRANCHDonna Rooney Brittney DelanoyCynthia Beck Kendall McCormickTina Ward

WEALTH MANAGEMENTKarilynn NikolejsinSharon Szilagyi Darla Brenholen Heidi Fowler Niki Johnston Pauline Vatamaniuck Ron Swan Sara Lawrence Sean Purdue Susan Lawrence Teresa Sherman Tony Gill

No company, small or large, CAN WIN OVER THE LONG RUN

without

energized employees WHO BELIEVE

in the mission

& UNDERSTAND how to achieve it!

- Jack Welch, General Electric

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Community InvolvementWeyburn Credit Union is committed to building a strong and vibrant community! Communities flourish when they are supported by companies who believe in social responsibility and Weyburn Credit Union prides itself on being a good corporate citizen. In fact, corporate responsibility is a cornerstone of our organization and is supported and encouraged at every level of our Credit Union. The Credit Union’s Board, management team and staff are committed to making a positive impact in our community; socially, economically, and environmentally.

STAFF COMMUNITY INVOLVEMENT BONUS OBJECTIVE

The Board of Directors has identified that community involvement is an important role for staff and want to encourage all employees to be involved in the community. To recognize and reward the personal time commitment that our employees have made throughout the year to various organizations, employees will be eligible to receive bonus points on their performance reviews. Bonus points are given for being a community participant, taking on leadership roles, and volunteer hours.

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CORPORATE DONATIONS AND SPONSORSHIP

WCU makes corporate donations to organizations that make a difference in our community. Sponsorships and donations involve financial and/or in-kind contributions (staff time, donation of equipment, provision of office space, etc.) to local events and organizations. Preference is given to charitable and non-profit events and organizations.

SCHOLARSHIPS

We wholeheartedly believe our youth members are our future - providing scholarships are one of the ways we support our youth. WCU awards scholarships to individuals furthering their education. The Credit Union offers the R. S. Williamson and Eliford Mott Memorial Scholarships and the Q. O. (Quint) Patrick and C. H. (Chuck) Hodgson Scholarships.

The 2015 recipients were:• Williamson/Mott Scholarships – Andrea Sidloski,

Jenna Neufeld, and Jade Pelechaty• C.H Hodgson Scholarship: $1,500 was awarded to

Brittinay Rowland• Q.O (Quint) Patrick Saskatchewan Opportunity

Scholarship: $1,500 was awarded to Alexis Pederson

WEYBURN CREDIT UNION COMMUNITY FUND

The Weyburn Credit Union Community Fund was established by the Weyburn Credit Union Board of Directors, where a portion of profits help fund worthwhile community projects. The fund supports local events or projects over $10,000 and/or lasting longer than three years. The fund focuses on strategic sponsorship opportunities that align with the Credit Union’s goals, priorities, and core values by contributing in a meaningful way to the communities we serve.

In 2015, the following projects/organizations received funding:

• Yellow Grass Fire Department: $20,000 was donated towards the purchase of a Fire Truck

• $10,000 was donated to the Tommy Douglas Center to assist with the Roofing Project

• Young Fellows received $3,000 towards their new Tree Shack.

• $4,000 was committed to Tatagwa Kids Club towards their playground

Weyburn Credit Union invites applications to be submitted year-round.

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Minutes of the 7Ist Annual MeetingWEYBURN CREDIT UNION LIMITEDHELD APRIL 15, 2015

Weyburn Credit Union President Glenn Ziegler called the meeting to order at 7:30 p.m. Mr. Ziegler welcomed the members and guests in attendance.

A moment of silence was held in memory of credit union and co-operators officials who have passed on.

AGENDA

President Ziegler presented the agenda for the meeting, requesting amendments, and additions. There were none.

Moved By Rod NieviadomySeconded By Rob Ror Motion To accept the agenda for the 71st annual meeting as presented.

MOTION CARRIED INTRODUCTIONS

President Ziegler introduced the Weyburn Credit Union Board of Directors in attendance – Gary Beck, Lynn Colquhoun, Rod Nieviadomy, Jeff Richards, Ror Ror, Joleen Tuchscherer, Randy Vopni, and Norman Wall.

CEO Shumlich welcomed and introduced the guests attending the meeting.

Past Weyburn Credit Union Board of Directors:• Harry Plemel• Ron Wormsbecker

Representing credit union system associates:• David Prost, Virtus Group

Representing the media:• Sabrina Kraft, Weyburn Review• Elise Thomsen, Discover Weyburn

PROOF OF MEETING NOTICE AND ANNUAL REPORT AVAILABLE

To comply with the Credit Union Act, 1998, regulations, proof must be provided that:

(a) Notice of the annual meeting was advertised at least twenty-one days prior to the meeting date.(b) The annual report was available to the membership at least ten days prior to the meeting date.

As such, CEO Shumlich referred to two separate affidavits that evidenced compliance with the requirements. The affidavits were sworn by President Glenn Ziegler and Vice President of Finance Krista Hayward.

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VERIFICATION OF QUORUM

Pursuant to credit union regulations, a certain number of members must be in attendance to hold a meeting and quorum. The quorum at an annual meeting of members is 15 members entitled to vote. A proper quorum was in attendance with 39 members and three guests registered.

MINUTES OF THE 70TH ANNUAL MEETING

First Vice President Norman Wall reviewed the minutes of the 70th annual meeting. He invited comments, questions, errors, or omissions arising out of the minutes of the regular annual meeting. There were none. Moved By Norman Wall Seconded By Jeff HaywardMotion To accept the minutes of the 70th annual meeting as presented.

MOTION CARRIED

President Ziegler inquired if there was business arising out of the minutes of the 70th annual meeting. There were none.

QUESTION CARDS

President Ziegler invited members to use the question cards provided. Questions would be addressed at an appropriate time throughout the meeting.

MESSAGE FROM THE BOARD

President Ziegler presented a message from the Board of Directors for the 2014 year-end. Some of the points touched on during the presentation are as follows:

• The membership can be assured that the Board, the executive management team, and the entire credit union system are working diligently and cooperatively to prepare for current and future challenges such as increasing competition, tight margins, and the increasing capital requirements.

• The road to success is always under construction and Weyburn Credit Union is poised to handle it. With these challenges come many opportunities that Weyburn Credit Union is meeting proactively. Board, management, and staff members use sound judgment to ensure the success, profitability, and sustainability for years to come.

• He spoke of an efficiency ratio that should be the envy of the entire provincial credit union system.• Weyburn Credit Union has a strong team with the dedication, commitment, and vision that will ensure a

sustainable community-minded credit union for many years to come.• On behalf of the Board of Directors of Weyburn Credit Union, management and staff were congratulated

for their contribution in achieving the impressive financial and strategic goals of the organization.• Thank you to the membership for their support, which has made our Credit Union successful for many

years, not just in 2014.

NOMINATING COMMITTEE REPORT AND ELECTION RESULTS

• Nominating Committee Chair Randy Vopni provided an overview of the Nominating Committee’s duties.• There were three vacancies on the Board of Directors, with two incumbents (Gary Beck and Rob for) and

two nominees (Kelly Linnell and Andrew Shanaida) running for election. With three vacancies and four nominees, an election was necessary.

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• Chair Vopni announced the Board election results. He then read a biography for each elected director and congratulated them on their election to the Board of Directors. Reported in alphabetical order, elected directors are:

▫ Gary Beck 3 Year Term ▫ Kelly Linnell 3 Year Term ▫ Rob Ror 3 Year Term

• Mr. Shanaida was thanked for his interest in sitting on the Board and was encouraged to run in the future.

AUDITOR’S REPORT

• David Prost of Virtus Group reviewed the Auditor’s Report as presented in the 2014 Annual Report.• Weyburn Credit Union is a very prudently managed and profitable institution and is strategically

positioned to meet upcoming challenges in the financial services industry.• Mr. Prost stated that the summarized financials included in the 2014 Annual Report is a fair

representation of the full financial statements available on the Weyburn Credit Union website and in hardcopy at the meeting.

• He thanked the Board, management, and staff for their continued dedication and hard work. He congratulated Weyburn Credit Union on another successful year.

Moved By Norman Wall Seconded By Rob RorMotion To accept the 2014 Auditor’s Report provided by the Virtus Group as

presented.MOTION CARRIED

PRESENTATION OF 2014 FINANCIAL STATEMENTS

• Vice President of Finance Krista Hayward provided an overview of the financial position for the year ending December 31, 2014 through a PowerPoint presentation.

• VP K. Hayward referred meeting attendees to the summarized financial statements that could be found in the 2014 Annual Report.

• A copy of the complete financial statements and notes are available on the Weyburn Credit Union’s website. As well, a number of paper copies of the full financial statements were printed and made available for distribution at the annual meeting.

• At the conclusion of the presentation, VP K. Hayward asked if there were any comments or questions arising from the overview. Virtus Group’s David Prost inquired about the recent Bank of Canada flat interest rate announcement. VP K. Hayward advised the group that Weyburn Credit Union executive management continue to forecast a flat interest rate scenario for 2015 and incorporate this projection into the budgeting process.

Moved By Joleen TuchschererSeconded By Lynn ColquhounMotion To accept the financial statements for the year ending December 31, 2014

as presented.MOTION CARRIED

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APPOINTMENT OF AUDITORS

President Ziegler read the requirements for the appointment of auditor. Pursuant to Section 270, Subsection (1) of the Credit Union Act, 1998, the Board of Directors recommends to the membership that the firm of Virtus Group, Chartered Accountants and Business Advisors LLP, be appointed as the auditor for Weyburn Credit Union Limited for 2015.

Moved By Jeff RichardsSeconded By Ryan TebbuttMotion To accept the Weyburn Credit Union Board of Director’s recommendation

that the firm of Virtus Group, Chartered Accountants and Business Advisors LLP, be appointed as the auditor for Weyburn Credit Union Limited for 2015.

MOTION CARRIED

MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

The Message from the Chief Executive Officer was presented by Don Shumlich. CEO Shumlich’s presentation is summarized below.

• Weyburn Credit Union experienced close to 11% growth in assets under administration in 2014. The high quality lending portfolio is quantified by low delinquency. Increased capital levels added strength and stability to the organization.

• The Credit Union continues to make numerous corporate donations, sponsorships, and provide scholarships. As well, our staff continued to volunteer their time and skill to many community events and organizations. We continue to make a very positive impact in the communities we serve.

• A brand review conducted by a third party provided insight into how we are perceived by both members and non-members and clarified what people are looking for in a financial service provider.

• Products and services that were launched in 2014 included: ▫ Online banking for small business ▫ Banking app ▫ Cheque image depositing called Deposit Anywhere ▫ Two new accounts customized for young adults ▫ Electronic cheque clearing

• Consumer expectations continue to change. Fast and easy access to funds is important and drives technology improvements while ensuring security and compliance.

• Increasing federal and provincial compliance requirements demand higher standards to ensure the stability and soundness of the Canadian financial system. This was a key factor in the change to our rebate and bonus program in 2014.

• The local economy plays a big role in our growth potential. The price of oil and the historic low interest rates are concerning; however, the outlook for the agricultural sector looks promising.

• The four strategic goals that were focused on in 2014 were: ▫ Financially Strong ▫ Member Growth and Community Support ▫ Efficient Operations ▫ Best People

• Weyburn Credit Union experienced another successful year. CEO Shumlich thanked management and staff for their skill, hard work, and dedication. The Board was recognized for their time, support, and leadership to ensure that members’ needs are met and that WCU remains strong and successful. The memberships’ business and continued support was acknowledged as being what makes WCU a strong

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and thriving organization.• This year will also bring changes in our Board of Directors. President of the Board Glenn Ziegler is retiring

after nine years of service. He was thanked for his contribution. His knowledge, advice, and leadership will be missed. Also, our newest director Kelly Linnell was welcomed to the Board.

RETIREMENT PRESENTATION

• Board member Lynn Colquhoun presented a retirement award to outgoing President Glenn Ziegler. He was thanked for his service to the Board over the past nine years.

• His fellow Board members found him to always be very collaborative and enthusiastic to work with. He continually challenged them to make decisions that would benefit the membership and staff and ensure the success of Weyburn Credit Union.

• Glenn Ziegler provided a brief response acknowledging the guidance of WCU management, staff, and fellow Board members.

ORDER OF MERIT PRESENTATION

• President Ziegler provided background information on the Director Order of Merit Award. In 2005, credit union delegates passed a resolution to establish a program to recognize the contributions of directors as system leaders. Each credit union in the province may induct one member annually to the Saskatchewan Book of Honour and that director receives an Order of Merit Award.

• Weyburn Credit Union nominated past Director and President Robert Williamson as the 2015 recipient, posthumously.

• President Ziegler presented the award to Mr. Williamson’s granddaughter Memory Williamson, on behalf of the family.

• Miss Williamson graciously accepted the award on behalf of her grandfather.

OTHER BUSINESS

President Ziegler asked the membership if there was any further business arising from the meeting. There was none. Director Joleen Tuchscherer said grace prior to lunch.

All monies collected for the luncheon were matched by Weyburn Credit Union and donated to the Red Cross Day of Pink (Anti-Bullying) campaign in the amount of $130.

Meeting adjourned at 8:25 p.m.

GLENN ZIEGLER, PRESIDENT DON SHUMLICH, SECRETARY

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The Management Discussion & Analysis (MD&A) is presented to enable readers to assess material changes in the financial condition and operating results of Weyburn Credit Union (the Credit Union) for the year ended December 31, 2015 compared with prior years. This MD&A is prepared in conjunction with the Condensed Summarized Financial Statements for the year ended December 31, 2015 and should be read together. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have been primarily derived from the Credit Union’s annual Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS).

This MD&A may contain future-looking statements concerning Weyburn Credit Union’s future strategies. These statements involve uncertainties in relation to prevailing economic, legislative, and regulatory conditions at the time of writing. Therefore, actual results may differ from the future-looking statements contained in this discussion.

Corporate ProfileWeyburn Credit Union is an independent Saskatchewan credit union owned by its members. The Credit Union’s head office is located in Weyburn, Saskatchewan. The Credit Union has assets under administration of over $709 million.

Under the current credit union legislation, Weyburn Credit Union is able to provide financial services to members and non-members. As at December 31, 2015, Weyburn Credit Union had 7,914 members and 930 non-members. Non-members do not participate in the democratic processes of the Credit Union nor the patronage program.

The Credit Union serves the communities of Weyburn, Lang, Yellow Grass, and surrounding areas through these three branches. In these communities we provide a full range of financial services including retail and commercial deposit services, consumer/agricultural/commercial lending, wealth management services, card products, electronic, mobile banking, etc.

The Credit Union is regulated by The Credit Union Act, 1998 and The Credit Union Regulations, 1999. The Credit Union must comply with the Credit Union Deposit Guarantee Corporation’s (CUDGC) Standards of Sound Business Practices and with Credit Union articles, bylaws, and policies. Other provincial and federal regulations and common law create additional legal rights and obligations.

Management Discussion & Analysis

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Strategy, Strategic Goals, and Targets

The vision of Weyburn Credit Union (WCU) is to be the financial institution of choice. In order to achieve this vision the Credit Union concentrates on creating an extraordinary member experience. The organization focuses on the following:

• achieving an in-depth understanding of members’ problems, needs, and opportunities;• striving to provide the best total financial solution by delivering exactly what the member needs;• cultivating full service relationships with members, not just pursuing transactions;• developing member loyalty and long-term profitable relationships;• providing high quality products and exceptional service; and• developing an engaged workforce that is competent, courteous, and concerned.

The Credit Union uses a balanced scorecard approach to develop strategic plans and to measure and monitor progress towards achievement of its strategic goals. The 2015 scorecard included the following strategic goals: Financially Strong, Member Growth, Efficient Operations, and Best People.

The Credit Union’s 2015 strategic goals, intents, financial measures and results are as follows:

STRATEGIC GOALS STRATEGIC INTENTS(DESIRED STATE)

FINANCIAL MEASURES 2015 TARGETS

2015ACTUALS

Financially Strong • Achieve or exceed profit targets

• Grow capital to support growth, risks, and operations

Return on Average Assets 0.86% 0.99%

Total Eligible Risk-Weighted Capital

12.1% 12.72%

Member Growth • Prudently manage growth• Provide an extraordinary

member service experience

On-Book Asset Growth 5.25% 2.23%

Off-Book Asset Growth 5.25% 15.27%

Consumer Loan Growth Mix > 50% 68.13%

Grow Member / Non-Member Relationships

> 0 6

Member Satisfaction Survey 80% 96.26%

Efficient Operations • Evolve compliance, risk management, and governance practices

• Improve operational effectiveness and efficiency

Efficiency Ratio < 75.44% 73.12%

Best People • Attract, hire, and retain high quality engaged people who provide excellent service and leadership

Staff Satisfaction SurveyStaff Turnover Ratio

80%8%

95.65%7.22%

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Financial Performance Review

ASSET GROWTH

Weyburn Credit Union ended December 31, 2015 with on-book assets of $502 million compared to $491 million at the end of 2014, representing growth of 2.23%. Off-book assets under management through our Wealth Management Department at year end were $207 million as compared to $180 million at the end of last year, representing an increase of 15.27%. The Credit Union’s total assets under administration are approximately $709 million. This is a 5.73% increase from prior year results. The average growth of total assets under administration over the past five years was 8.68%.

LOAN GROWTHThe Credit Union’s loan portfolio at December 31, 2015 was $371 million. Loans increased by $19.1 million or 5.15% in 2015. In line with the 2015 corporate objectives, the majority of the growth was in consumer lending. The growth in agricultural mortgage lending in 2015 was also strong. Average growth of the loan portfolio over that last five years was 4.92%. The following graph illustrates the total loan portfolio by sector.

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DEPOSIT GROWTH

The Credit Union’s liabilities consist mainly of member deposits from both personal and commercial members. At December 31, 2015 deposits were $457 million, up from the previous year’s balance of $450 million, an increase of 1.67%. These deposits are 100% guaranteed by the Credit Union Deposit Guarantee Corporation (CUDGC) which is the regulator of Saskatchewan credit unions.

In 2015, deposit growth was experienced in consumer and business chequing accounts. The local economy continued to provide for moderate levels of consumer and commercial cash flow despite the slowdown in the oil and gas sector. Consumers also increased their holdings in high interest savings accounts. With the prolonged low rate environment, consumers continue to look for a safe and short term places to invest and are not as interested in long term products.

CREDIT QUALITY

The overall credit quality of our loan portfolio remains very favorable. Delinquency greater than 90 days was 0.12% for 2015, up from 0.03% at the end of 2014. The quality of the loan portfolio remains high and was confirmed by both internal and external audit processes conducted in 2015. The Credit Union was not holding any foreclosed or repossessed property at year end.

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LIQUIDITY

Liquidity management is one of the Credit Union’s primary objectives. Effective liquidity management ensures that the Credit Union is able to generate or obtain cash or cash equivalents in a timely manner and at a reasonable price to meet commitments as they come due, even under stressed conditions.

The Credit Union maintains a liquidity plan to support its liquidity policies and regulations. The plan is reviewed and approved on an annual basis by the Board of Directors. As per the liquidity plan, the Credit Union maintains a stock of liquid assets while regularly measuring and monitoring available liquidity, liquidity ratios, and stress tests to identify sources of liquidity strain. The Credit Union also maintains an external borrowing facility to complement liquidity management. The Credit Union’s liquidity is measured by an operating liquidity ratio which considers projected cash inflows as a percentage of projected cash outflows. At December 31, 2015 the ratio was 75% as compared to 128% at the end of 2014. Throughout 2015 loan demand was funded by excess liquidity levels from the prior year which decreased the ratio for the 2015 year-end. The loan to asset ratio for 2015 increased to 74% from the prior year amount of 72%. All liquidity ratios were within the Board approved risk tolerances for 2015.

The regulator of Saskatchewan credit unions, Credit Union Deposit Guarantee Corporation (CUDGC), requires all Saskatchewan credit unions to maintain 10% of member deposits with SaskCentral (manager of the provincial liquidity program). These liquidity investments provide a safety net of liquid funds to satisfy payment obligations and to protect against unforeseen liquidity events. CUDGC released updated liquidity guidelines in 2015 and is currently in the process of implementing new liquidity adequacy requirements. The requirements will result in certain levels of high quality liquid assets being maintained by the Credit Union. These requirements will be effective January 1, 2017.

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PROFITABILITY

Total interest revenue for 2015 was $16.4 million which is down $522,580 from 2014. Lower interest revenue was attributed to two cuts to the prime interest rate in 2015. A decreased prime rate affects interest earned on all variable rate loans and mortgages as well as all new fixed rate loans. The Credit Union’s internal investment portfolio grew by $14 million in 2015 to $109 million. Yields and interest earned on these investments are also affected by decreased market interest rates. Interest expense on member deposits decreased to $4.5 million from $5.1 million in 2014 as consumers chose to move their savings to variable rate products given the low yields on fixed term products.

Other income includes revenue from sources like commissions and charges, service fees, loan administration fees and fixed asset income. The Credit Union experienced a very strong year in this area as other income in 2015 reached $3.9 million up from $3.1 million in 2014.

Total operating expenses (non-interest expenses) include expenses such as general business, occupancy, organizational, personnel, and security. Operating expenses for 2015 increased $833,695 or 7.69% from 2014. The two largest dollar increases are in general business ($423,608) and personnel ($310,876). The Credit Union continues to make expenditures on technology to provide better service to our members. Expenditures have also increased in the area of compliance and regulations to ensure we have a strong, viable Credit Union that protects member deposits for years to come.

Despite near historical low interest rates and increasing operating costs, the Credit Union experienced another profitable year. Total comprehensive income for the 2015 was $3.54 million up from $3.42 million in 2014. The return on assets (ROA) before patronage and income tax was 0.85% compared to 0.82% in 2014.

The Credit Union recovered $173,383 from previous loan loss provisions in 2015 as compared to a recovery of $30,964 a year prior. Loan provisions are established when there is a potential for delinquency issues and security shortfalls. If these issues do not materialize we are able to recover the original provision.

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CAPITAL MANAGEMENT

One of the main measures of financial strength of any financial institution is its capital levels. The Credit Union’s capital consists of equity accounts and retained earnings. Each year the Credit Union retains a portion of its annual earnings in order to build capital. The regulator of Saskatchewan credit unions, Credit Union Deposit Guarantee Corporation (CUDGC), prescribes capital adequacy measures and minimum capital requirements. CUDGC made changes to these requirements in July 2013 and further changes were effective January 1, 2016.

Credit unions are required to use four measures to determine capital adequacy. The measures include: common equity tier 1 capital to risk weighted assets, total tier 1 capital to risk weighted assets, total eligible capital to risk weighted assets, and a leverage ratio. The risk weighted assets to capital ratios measure the adequacy of the institution’s capital in relation to the risk of its balance sheet and off balance sheet holdings. The leverage ratio provides a measure of the quality of an institution’s capital and now includes certain off balance sheet exposures in the calculation.

CUDGC requires credit unions to maintain minimums for each of these ratios, but has strongly emphasized the need for credit unions to establish stricter-than-regulatory limits in policy, consistent with the notion of operating within a prudential model. CUDGC expects credit unions to set internal targets for each of these measures. This will help to ensure that Saskatchewan credit unions are able to weather unexpected events and remain financially strong. Credit unions with capital levels below these expected levels will be subject to increased regulatory monitoring by CUDGC.

The following table compares CUDGC regulatory standards to the Credit Union’s Board policy tolerances for 2015:

CUDGC LIMITRISK TOLERANCES

TARGETMINIMUM MAXIMUM

Leverage Ratio 5.00% 7.00% 14.00% 9.00%Common Equity Tier 1 RWC 7.00% 7.25% 16.00% 11.50%Total Tier 1 RWC 8.50% 8.75% 16.00% 11.50%Total Eligible RWC 10.50% 10.75% 16.00% 13.20%

One of the Credit Union’s strategic goals is to remain financially strong. Annually a capital plan is prepared and presented to the Board to ensure there is adequate capital to support regulatory compliance, operational needs, growth, and offset risks, including unexpected losses and prolonged periods of stress. The Credit Union’s long-term capital target is to have common equity tier 1 capital of at least 11.5%, total tier 1 capital of at least 11.5%, eligible capital to risk-weighted assets of at least 13.20%, and a leverage ratio of at least 9%.

The Credit Union relies on profitability to grow its capital. The majority of the Credit Union’s total capital is in retained earnings. Capital ratios are affected by balance sheet growth, risk-weighting of growth, and profitability. The Credit Union retains a portion of its annual earnings in order to satisfy its capital plans. Once these capital objectives are satisfied, additional earnings could be allocated to members through the Credit Union’s patronage program.

For the year ending December 31, 2015 common equity tier 1 capital and total tier 1 capital was 11.36%. Total eligible capital ended 2015 at 12.72%. The leverage ratio was 7.96%. The Credit Union was in compliance with all capital requirements at year-end. As mentioned previously, our capital adequacy assessment process continues to signal the need to grow our capital levels. In 2014, a temporary change was made to our Distribution of Profit Policy in order to direct more funds to capital and work towards reaching our internal targets. This strategy continued in 2015.

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PATRONAGE

The economic recession of 2008 resulted in significant changes to the way financial institutions classify capital and increased the amount of capital financial institutions are expected to hold. These changes have impacted our patronage program in the last number of years. Emerging regulations and capital expectations imposed on all banks and credit unions continue to drive the urgent need for financial institutions to build equity at an expedited rate.

In order to meet capital requirements, Weyburn Credit Union did not make rebate and bonus payments for the 2015 fiscal year. This allowed us to build our capital to an even healthier level and work towards meeting our capital adequacy target.

We continue to support our members and the communities we serve through numerous corporate programs, sponsorships, events, and donations. We are committed to making a positive impact in the communities we serve and this will not change.

It is intended that this change to rebate and bonus payments is only temporary. Our patronage program is expected to resume once the Board determines it is once again prudent to do so.

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Enterprise Risk ManagementEach year Weyburn Credit Union spends significant resources measuring and assessing risks and ensuring we are adequately prepared to serve our communities now and in the future. This process is called enterprise risk management or ERM for short, and is a requirement of credit unions in Saskatchewan as laid out by Credit Union Deposit Guarantee Corporation (CUDGC).

Risk management is a comprehensive, disciplined, and continuous process where risks and opportunities are identified, analyzed, and treated within approved risk tolerances and aligned with the risk appetite of the Credit Union.

As a financial institution, Weyburn Credit Union is exposed to many types of risk and potential opportunities. Risk represents the potential negative impact to the Credit Union’s ability to achieve important goals. Risk can also cause harm to the Credit Union’s reputation and result in a financial loss. Opportunities represent the potential positive outcome from the achievement of these goals. We accept risk and opportunities as part of our normal operations. We use risk management and capital to manage the risks and opportunities we are exposed to daily.

Weyburn Credit Union has developed a risk appetite statement and an enterprise risk management framework. The risk appetite statement articulates the degree of risk Weyburn Credit Union is willing to accept in order to optimize the value to the organization and ultimately, our members. The risk appetite statement identifies the risk tolerances for the Credit Union to operate within based on the capacity the institution can endure. The risk management framework outlines the continual flow of enterprise risk management within the Credit Union. Risks and potential opportunities are identified based on the achievement of the corporate goals. The potential risk and opportunity areas identified for Weyburn Credit Union are listed below.

STRATEGIC RISK

Strategic risk is the risk that adverse decisions, ineffective or inappropriate business plans or failure to respond to changes in the competitive environment, customer preferences, product obsolescence or resource allocation will impact our ability to meet our objectives. This risk is a function of the compatibility of an organization’s strategic goals, the business strategies developed to achieve these goals, the resources deployed against these goals, and the quality of implementation.

Weyburn Credit Union has an annual strategic planning process that produces a strategic plan and a business plan. The Credit Union has extensive reporting processes to monitor performance relative to these plans.

MARKET RISK

Market risk is the exposure to potential loss from changes in market prices or rates. Losses can occur when values of assets and liabilities or revenues and expenses are adversely affected by changes in market conditions, such as interest rate or foreign exchange movement.

The Credit Union utilizes comprehensive management processes to manage market risk. We have specific policy that clearly defines our risk limits in this area. An Asset and Liability Committee has been established to regularly monitor and manage this risk. A third party resource is used by the Asset and Liability Committee to assist in static and dynamic modeling, income simulations, and derivative planning. The Asset and Liability Committee reports regularly to the Board of Directors.

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LIQUIDITY RISK

Liquidity risk is the potential inability to meet obligations, such as liability maturities, deposit withdrawals, or funding loans without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources.

Weyburn Credit Union has developed a liquidity plan in addition to specific policies and regulatory limits that manage this risk. The Asset and Liability Committee and the Finance Department oversee liquidity risk exposure and management. The Credit Union seeks to maintain sufficient liquid resources to continually fund our balance sheet commitments and to ensure we can meet the cash requirements of our members. There is constant communication between different business units so that inflows and outflows of funds can be properly managed. The Credit Union holds a portfolio of liquid assets and maintains a line of credit with SaskCentral.  

CREDIT AND CONCENTRATION RISK

Credit risk is the risk of loss arising from a borrower or counterparty’s inability to meet its obligations. Credit risk comes mainly from our direct lending activities and participation loans (loans purchased, but not administered by the Credit Union) and to a lesser extent our holdings in our investment portfolio.

Credit risk management is managed through approved policies, procedures, standards, regulations, and controls.

Concentration risk is the risk posed to a financial institution by any single or group of exposures which have the potential to produce losses large enough to threaten the ability of the institution to continue operating as a going concern. In other words, it is the opposite of a diversified portfolio.

The Credit Union has established risk concentration limits that reflect our risk tolerances. Surplus liquidity is invested within our established policy limits and regulator-approved investment criteria. The credit portfolio and lending practices are regularly reviewed and assessed by internal and external auditors. The results of these audits are communicated to the Board of Directors through the Audit and Risk Committee.

LEGAL AND REGULATORY RISK

Legal and regulatory risk is the risk arising from potential violation of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards.

Financial institutions must comply with many different compliance requirements. The Credit Union has implemented policies and processes to ensure compliance expectations are met. Regular internal and external compliance audits occur and the findings of these audits are reported to the Board of Directors through the Audit and Risk Committee.

OPERATIONAL RISK

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events. Exposures to this risk arise from deficiencies in internal controls, technology failures, human error, employee integrity, or natural disasters.

Weyburn Credit Union uses policies, procedures, controls, and monitoring to manage operational risk. The risk is mitigated through internal audit reviews, insurance, business continuity planning, and secure technology solutions.

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Credit Union Market CodeWeyburn Credit Union voluntarily adheres to the Credit Union Market Code. This code has been jointly developed by Saskatchewan credit unions, SaskCentral, and Credit Union Deposit Guarantee to ensure the protection of credit union members.

The code sets forth guidelines for the following areas:

• Complaint handling, which outlines the process for dealing with all complaints regarding the service, products, fees, or charges of Weyburn Credit Union.

• Fair sales by outlining the roles and relationship of staff to all members/clients and in accordance with the financial services agreement.

• Financial planning process to advise members/clients on the risks and benefits associated with financial planning services.

• Privacy to protect the interests of those who do business with Weyburn Credit Union. Privacy is the practice to ensure all member/client information is kept confidential and used only for the purpose for which it was gathered.

• Professional standards to preserve a positive image of the Credit Union among our members, clients and communities.

• Capital management to ensure our capital structure aligns with our risk philosophy.

• Financial reporting to adhere to business and industry standards.

• Governance practices to adhere to the intent and stipulation of our corporate bylaws, which are approved by the membership of Weyburn Credit Union.

• Risk management to ensure all risks are measured and managed in an acceptable fashion.

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CREDIT UNION DEPOSIT GUARANTEE CORPORATION ANNUAL REPORT MESSAGE 2015

January 2016

Deposits Fully Guaranteed

Credit Union Deposit Guarantee Corporation (the Corporation) is the primary regulator and deposit guarantor for Saskatchewan credit unions. The Corporation is given its mandate through provincial legislation, The Credit Union Act, 1998, for the main purpose of guaranteeing the full repayment of deposits held in Saskatchewan credit unions. TheCorporation has successfully guaranteed the repayment of deposits held in Saskatchewan credit unions for over 60 years. By guaranteeing deposits and promoting responsible governance, the Corporation contributes to confidence in Saskatchewan credit unions.

Continuing to respond to regulatory changes at the international and national levels was a key focus for the Corporation in 2015. At the provincial level, in support of the Standards of Sound Business Practice, work continued on the development of additional standards and guidance that align with current international standards. In addition, the Corporation was actively involved in discussions with provincial and federal authorities in relation to developments associated with the shift in federal policy direction. These efforts will ensure the Corporation is positioned to continue to deliver on its mandate of protecting credit union depositors which, in turn, contributes to the strength and stability of Saskatchewan credit unions.

In 2016 the Corporation will continue to focus on the implications of the changing regulatory environment in addition to carrying forward its preventive efforts to support credit unions as an effective first level of deposit protection. Maintaining constructive relationships with credit unions and investing in programs that reduce risk to the Deposit Guarantee Fund will continue to be a key priority.

For more information about deposit protection, the Corporation’s regulatory responsibilities and its role in promoting the strength and stability of Saskatchewan credit unions, talk to a representative at the credit union or visit the Corporation’s web site at www.cudgc.sk.ca.