Evangeline Credit Union Ltd. - Évangéline
Transcription
Evangeline Credit Union Ltd. - Évangéline
Rapport annuel table des matières 2010 Rapport de la présidente...……………………..…...2-3 Conseil d’administration………………….………….4 L’impacte de la caisse………….……………………..5 Employé.es…..…………..………………..………...6-7 Rapport du directeur général………………...….…8-9 Rapport financier……………………..………....10-24 No. 1 en services………………………………..…....25 Statistiques……………………………..…..…....26-27 Stratégies financières Credential ...…….…………..28 Bénévole de l’année 2009………………….…..…...29 Dépôts étudiants…………...………………...…......29 Récipiendaires de bourses………….……...………...30 Commanditaire Relais pour la vie…….……………31 Services………….………………………….…………32 pour vous aider en cours de route... 2010 assisting with your journey... Annual Report table of contents President’s Report………………...…………..…..2-3 Board of Directors………………..………...…..…..4 Impact of the Credit Union…………………….…..5 Employees…………………………...……...…….6-7 General Manager’s Report……..………..……….8-9 Financial Report…………………………..…..10-24 No.1 in service ……………………...….………....25 Statistics………………………………….…….26-27 Credential Financial Strategies.……..….……......28 2009 Volunteer of the Year……………...…….....29 Student Deposits………………………..…..……..29 Scholarship Recipients.……………….…...……...30 Relay for Life Sponsorship..………………………31 Services…………….……………………………....32 Rapport de la présidente Voilà que se termine une autre année. Il est difficile de croire qu’une autre année civile vient de passer depuis que nous avons fait le point sur les résultats opérationnels et financiers de l’année 2008-2009. Il est d’autant plus difficile de croire que la réunion générale annuelle de cette année en sera la 41e de cette caisse populaire depuis la fusion des trois petites organisations communautaires des années 1970. Le processus de fusion d’il y a 41 ans s’est avéré, dans son ensemble, très progressif et extrêmement profitable aux communautés, à l’organisation et aux membres. Elle a su fournir l’efficacité et la force nécessaire pour que l’organisation puisse offrir les produits et les services auxquels les membres s’attendent de leur fournisseur de services financiers. Il est inconcevable de penser aujourd’hui comment chaque petite organisation distincte aurait pu survivre à long terme en raison de l’investissement ultimement nécessaire à l’offre de produits et de services qui dépendent de plus en plus de la technologie. Votre Conseil d’administration est responsable de diriger et de veiller aux opérations ainsi que d’aller à la recherche de possibilités de faire grandir et de renforcer l’organisation afin d’augmenter la probabilité de succès à long terme. Tel que mentionné plus tôt au cours de l’année, la possibilité de fusion avec la Central Credit Union d’O’Leary s’est présentée et énormément de travail a été effectué pour évaluer cette possibilité. Un processus a été établi, mais par la suite modifié puisque l’échéancier devenait extrêmement serré pour rendre disponible aux membres des deux organisations toute l’information pertinente pour considération à cette réunion générale annuelle. Puisque le directeur général de la Central Credit Union avait exprimé son désir de prendre sa retraite, les Conseils ont négocié une entente de services de gestion d’un an qui permettrait au directeur général de la Central Credit Union de prendre sa retraite et à notre directeur général de cumuler les fonctions de gestion des deux organisations. Au cours de cette période d’entente, le processus d’évaluation relativement à la fusion potentielle se poursuivra. Les membres continueront à recevoir de l’information au fur et à mesure que le processus continue d’évoluer. Le Conseil d’administration se réjouit de pouvoir affirmer que d’excellents résultats financiers ont été affichés encore cette année, malgré les incertitudes économiques persistantes qui existent dans la plupart des économies mondiales. Le solide appui continu des membres a permis une augmentation de 5,75% en actif par rapport à l’an dernier. La rentabilité continue à bien se porter puisque nous avons pu afficher un profit de 442 237 $ et, de plus, augmenter les capitaux propres à 4 842 231 $, qui se situe maintenant à 7,09% de l’actif. Un taux d’intérêt de dividende de 1,5% a été déclaré et récemment payé sur les parts, fondé sur le solde mensuel minimum dans les comptes. Je profite de cette occasion pour souligner la contribution importante des membres du Conseil, l’engagement véritable des employés et l’appui solide des membres en vue du succès continu de l’organisation afin d’assurer un autre quarantaine d’années de croissance et de prospérité. Carol Gallant Présidente du Conseil d’administration 2 www.evangelinecreditu.com President’s report Another year has come and gone. It sure doesn’t seem like a full calendar year has passed us by since we reported on our 2008-2009 fiscal year operational and financial results. Also, it is hard to believe that this year’s annual general meeting is the 41st of this Credit Union Carol Gallant since the amalgamation of the three small community organizations back in 1970. The amalgamation process of 41 years Présidente ago has proven to be quite progressive and extremely beneficial for the President communities, the organization, and the membership as a whole. It has provided the efficiency and strength required so that the organization can deliver the products and services that the members came to expect from their financial service provider. It is unimaginable today to perceive how each small separate organization would be able to survive in the long term due to the investment ultimately required in the delivery of the products and services that have come to be heavily reliant on technology. Your Board of Directors has the responsibility to direct and monitor the operation, as well as seek opportunities to grow and strengthen the organization in order to increase the probability of long-term success. As previously communicated earlier this year, an amalgamation opportunity with Central Credit Union of O’Leary came about and considerable work was done to evaluate this opportunity. A process was initially established but was later altered as the timelines became extremely tight to bring forward all the pertinent information to the membership of both organizations for consideration at this annual general meeting. As the General Manager of Central Credit Union had expressed a desire to retire, the Boards negotiated a one year Management Services Agreement that would allow the Central’s General Manager to effectively retire and our General Manager to assume the management responsibilities of both organizations. During this agreement period, the evaluation process related to the potential amalgamation will continue. Further information will be provided to the memberships as the process continues to evolve. The Board of Directors is quite pleased to report some relatively strong financial results again this year despite lingering economic uncertainties evident throughout most of the world economies. Continued strong support of the membership has resulted in an increase of 5.75% in assets over the previous year. Profitability continues to be quite healthy as we were able to post a net profit of $442,237 and furthermore increase the equity to $4,842,231 which is now at 7.09% of assets. A dividend interest rate of 1.5% was declared and recently paid on share deposits based on the minimum monthly balance of the accounts. I would like to take this opportunity to recognize the important contribution of the Board members, the genuine commitment of the employees and the strong support of the members in the ongoing success of the organization as we strive for another 40 years or so of growth and prosperity. Carol Gallant Board President 3 2010 Conseil d’administration Board of Directors Carol Gallant Présidente President Raymond Arsenault Vice-président Comités de politiques et de crédit Vice-President Policy and Audit Committees Peter Bulger Secrétaire Comité de crédit Secretary Audit Committee Léo-Paul Arsenault Giselle Bernard Glen Ellis Comité de crédit Audit Committee Comités de politiques et d’éducation Policy and Education Committees Comité de finances Finance Committee Robert Gallant Ira Smith Eric Wagner Comité de finances Finance Committee Comité de finances Finance Committee Comités de politiques et d’éducation Policy and Education Committees 4 www.evangelinecreditu.com L’impact de la Caisse populaire Évangéline Evangeline Credit Union’s impact Au 30 septembre 2010 As of September 30th, 2010 $148,929 Dividendes Dividends $54,679 Dons annuels Donations $96,750 Valeur des points Choice Rewards points value 24 5,530 $68,268,092 Employé.es Employees Propriétaires Owners Actifs Assets 5 2010 Les employé.es Staff Alfred Arsenault Directeur général General Manager Marlene Cormier Rép. aux services des membres Member Services Rep. Diane Richard Rép. aux services des membres Member Services Rep. Denise Arsenault Mark Campbell Directrice des services administratifs Directeur de la succursale Branch Manager Administrative Services Manager Lucille Gallant Kelly MacDougall Angele Gallant Directrice de la succursale Branch Manager Phyllis Ramsay Rép. aux services des membres Rép. aux services des membres Rép. aux services des membres Member Services Rep. Member Services Rep. Member Services Rep. Joan St. John Judy Robichaud Rép. aux services des membres Rép. aux services des membres Member Services Rep. Member Services Rep. 6 www.evangelinecreditu.com Rachelle Steffensen Rép. aux services des membres Member Services Rep. Les employé.es Staff Corinne Arsenault Spécialiste aux services des membres Member Services Specialist Marc Côté Gisele Arsenault Agent des services financiers Financial Services Officer Agente des services financiers Financial Services Officer Craig MacLean Agent des services financiers Financial Services Officer Ben Murphy Sandra Palmer Heather Banks Thelma Blanchard Agent des services commerciaux Commercial Services Officer Agente des services financiers Financial Services Officer Agente administrative Administrative Officer Commis comptable Accounting Clerk Marie Maddix Agente administrative Administrative Officer Liette McInnis Diane McInnis Secrétaire-réceptionniste Secretary-Receptionist Agente de marketing Marketing Officer 7 2010 Sheila-May Muttart Commis administrative Administrative Clerk Rapport du directeur général Je suis très heureux de vous présenter encore une fois mon rapport sur le fonctionnement de votre Caisse populaire au cours de la dernière année ainsi que sur l’orientation générale que nous prévoyons pour l’avenir. Depuis l’importante crise économique de 2008-2009, l’économie n’a pas connu de reprise rigoureuse principalement en raison des problèmes persistants du marché de l’habitation des États-Unis, du niveau de dettes et de déficits insoutenables de nombreux pays autour du monde et du niveau toujours croissant de dettes des individus. Heureusement, au Canada, l’économie n’a pas été affectée aussi négativement que dans d’autres pays, puisqu’il possède un niveau plus raisonnable de dette fédérale et une philosophie de réglementation plus rigoureuse que nos institutions financières doivent observer. À la suite de cette lente relance économique, les taux d’intérêt n’ont pas rebondi aussi rapidement que prévu. Les faibles taux sont évidemment profitables pour ceux qui ont contracté des prêts; cependant, il n’en est pas de même pour ceux qui dépendent du revenu de l’intérêt provenant d’investissements. Les résultats financiers de cette dernière année financière se comparent à ceux de l’an dernier. Une faible réduction des marges a donné lieu à une réduction des revenus de fonctionnement qui ont été compensés par une réduction de la contribution nécessaire à la réserve pour pertes sur prêts en raison d’une performance relativement forte du dossier en question. La mise à niveau du guichet automatique afin de le rendre complètement conforme au système des cartes à puce et l’asphaltage en entier du terrain de stationnement de notre succursale de Wellington sont les seuls investissements importants qu’il y a eu au cours de la dernière année. Pour assurer que nous demeurions concurrentiels sur le marché, il est très important de continuer de prendre appui sur les capitaux propres de l’organisation et d’aller à la recherche de possibilités qui permettront d’augmenter l’efficacité. En raison de notre niveau de rentabilité relativement élevé au fil des ans, nous avons pu continuer à renforcer la valeur nette de l’organisation. En raison du nombre de plus en plus élevé de règlements, il devient de plus en plus difficile pour les petites organisations de se permettre l’expertise nécessaire pour demeurer complètement en règle. La direction continue toujours de trouver et de mettre en œuvre des solutions économiques afin de satisfaire ces exigences. Cet exercice de recherche d’efficacité a projeté, ce qui semble trop évident, à l’avant-plan : la fusion avec une caisse populaire semblable à la nôtre. Malgré les défis que présente une telle proposition, les communautés en question devraient grandement bénéficier de l’efficacité potentielle de combiner l’administration de deux organisations. J’ai très hâte à finaliser le processus d’évaluation du projet de fusion de notre caisse populaire avec notre voisin de l’ouest, la Central Credit Union de la communauté d’O’Leary. Pour conclure, je tiens à remercier sincèrement tous nos employés pour leur importante contribution au succès continu de notre organisation. Dans une organisation de service comme la nôtre, les employés jouent un rôle tellement essentiel dans son succès. Je crois que nous sommes très chanceux de pouvoir compter sur un groupe de gens si dévoués qui vont souvent au-delà de leur mandat afin de respecter notre engagement d’offrir des services de qualité à nos membres-propriétaires. Enfin, je tiens à féliciter sincèrement les bénévoles qui composent le Conseil d’administration pour leur appui continu de notre équipe de gestion et pour leur contribution régulière à l’orientation stratégique de la Caisse populaire. Alfred Arsenault Directeur général 8 www.evangelinecreditu.com General Manager’s report I am very pleased to report to you once again on the operation of your Credit Union for the past year as well as on the general direction that we foresee for the future. Since having gone through the major economic crisis of 2008 – 2009, the Alfred Arsenault economy has failed to see a strong rebound mainly due to the persisting problems in the US housing market, the unsustainable level of debts and Directeur général deficits of numerous countries around the world and the ever-increasing level General Manager of debt carried by individuals. Fortunately, in Canada, our economy has not been affected quite as negatively as that of other countries, since our country has a somewhat more reasonable level of federal debt and a rigorous regulation philosophy that our financial institutions follow. As a result of this slow economic recovery, interest rates have not rebounded quite as quickly as was originally expected. Low rates are obviously beneficial for anyone carrying loans; however, the same cannot be said for someone relying on interest revenue from investments. Our financial results for this past fiscal year are quite comparable to those of the previous year. A slight reduction in margins has resulted in a decrease in operating earnings which have been offset by a reduction in contribution required in loan loss reserve because of a relatively strong performance of the portfolio. The only significant investments made this past year was an ATM upgrade required to be fully chip-card compliant and the repaving of the entire parking area of our Wellington office. To ensure that we remain competitive in the market place, it is very important to continuously build on the equity of the organization and to seek out opportunities to increase efficiency. As a result of our relatively strong level of profitability over the years, we have been able to continually strengthen the net worth of the organization. With ever-increasing regulations, it becomes more and more challenging for small organizations to afford the expertise that is required to remain fully compliant. There is a continuous effort by Management to identify and implement cost effective solutions to fulfill these requirements. This efficiency-seeking exercise has brought what seems too obvious to ignore to the forefront: amalgamation with a like-minded Credit Union. Despite the challenges that such a proposal creates, the potential efficiencies of combining the administration of two organizations should bring significant benefits to the communities involved. I very much look forward to finalizing the evaluation process of the proposed amalgamation of our Credit Union with our neighbor to the west, the Central Credit Union of O’Leary. I would like to sincerely thank all our employees for their significant contribution to the ongoing success of our organization. In a service organization such as ours, the employees play such a critical part in its success. I believe that we are very fortunate to have such a committed group of individuals who regularly go beyond expectation to deliver on our commitment to quality service to our member/owners. Finally, I would like to sincerely thank the volunteers who make up the Board of Directors for their continued support of our Management team and for their ongoing input in the strategic direction of the Credit Union. Alfred Arsenault General Manager 9 2010 Rapport financier October 15, 2010 Auditors' Report To the Members of Evangeline Credit Union Ltd. We have audited the balance sheet of Evangeline Credit Union Ltd. as at September 30, 2010 and the statements of earnings, undistributed income and cash flows for the year then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the company as at September 30, 2010 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants (1) 2 10 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Balance Sheet As at September 30, 2010 2010 $ 2009 $ 1,730,732 7,883,383 52,523,895 163,381 76,674 94,364 22,521 981,873 7,024,609 50,919,426 196,063 6,748 72,076 - 62,494,950 59,200,795 Property and equipment (note 4) 1,139,194 1,069,597 Investments (note 5) 4,632,080 4,285,435 68,266,224 64,555,827 62,552,890 492,905 378,198 - 59,291,493 533,863 321,362 9,115 63,423,993 60,155,833 4,842,231 4,399,994 68,266,224 64,555,827 Assets Current assets Cash and equivalents Current accounts Loans and mortgages (note 3) Accrued loan interest receivable Real estate held for resale Prepaid expenses and other Income taxes receivable Liabilities Current liabilities Member deposits (note 6) Accrued interest payable Other liabilities Income taxes payable Contingent liability (note 7) Members' Equity Undistributed income Approved by the Board of Directors _____________________________ Director _____________________________ Director (2) 3 11 2010 Rapport financier Evangeline Credit Union Ltd. Statement of Undistributed Income For the year ended September 30, 2010 Undistributed income - Beginning of year Net earnings for the year Undistributed income - End of year (3) 2 12 www.evangelinecreditu.com 2010 $ 2009 $ 4,399,994 3,971,882 442,237 428,112 4,842,231 4,399,994 Financial Report Evangeline Credit Union Ltd. Statement of Earnings For the year ended September 30, 2010 Revenue Loan interest Investment Service fees Commissions Other income Expenses Staff Premises Insurance Office Service fees General Cost of capital Operating earnings Other expense Share dividends Provision for loan losses Provision for real estate held for resale Provision for current income taxes Net earnings for the year (4) 3 13 2010 2010 $ 2009 $ 3,226,859 162,067 372,719 404,493 74,831 3,308,636 260,829 346,383 377,333 69,727 4,240,969 4,362,908 1,202,630 143,718 135,486 138,474 594,592 264,120 944,540 1,112,171 147,595 124,155 122,100 571,588 255,853 1,130,532 3,423,560 3,463,994 817,409 898,914 148,929 128,500 35,000 135,802 249,813 - 312,429 385,615 504,980 513,299 62,743 85,187 442,237 428,112 Rapport financier Evangeline Credit Union Ltd. Statement of Cash Flows For the year ended September 30, 2010 2010 $ 2009 $ 442,237 428,112 86,191 128,500 35,000 89,075 249,813 - 691,928 767,000 32,682 (104,926) (22,288) (22,521) (40,958) 56,836 (9,115) (6,377) 127,393 (16,209) (67,057) 79,175 (38,501) 581,638 845,424 Cash provided by (used in) Operating activities Net earnings for the year Item not affecting cash Amortization Provision for loan losses Provision for real estate held for resale Net change in non-cash working capital items Decrease (increase) in accrued loan interest receivable Decrease (increase) in real estate held for resale Increase in prepaid expenses and other Increase in income taxes receivable Decrease in accrued interest payable Increase in other liabilities Decrease in income taxes payable Financing activities Repayment of loan payable Increase in member deposits 3,261,397 (150,000) 5,206,296 3,261,397 5,056,296 (155,788) (346,645) (1,732,969) (80,329) (198,157) (3,906,680) (2,235,402) (4,185,166) Increase in net cash 1,607,633 1,716,554 Net cash - Beginning of year 8,006,482 6,289,928 Net cash - End of year 9,614,115 8,006,482 1,730,732 7,883,383 981,873 7,024,609 9,614,115 8,006,482 3,421,608 985,498 2,008 148,929 94,379 3,582,239 1,197,589 2,008 135,803 123,688 Investing activities Purchase of property and equipment Increase in investments Increase in loans and mortgages Net cash consists of Cash and equivalents Current accounts Supplementary disclosure Interest received Interest paid Dividends received Dividends paid Income taxes paid (5) 2 14 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 1 General The Evangeline Credit Union Ltd. is incorporated under the Prince Edward Island Credit Unions Act. Its principal business activities include financial and banking services for credit union members. 2 Summary of significant accounting policies Loans and mortgages Loans and mortgages are stated at the principal amount less allowances established to recognize estimated credit exposure and impairment. Provision for impaired loans A loan is classified as impaired when, in management's opinion, it is prudent to establish a provision against a specific loan for which the timely and full collection of the loan may be questionable. This provision is determined in two manners, specific provisions and general provisions. Specific provision Specific provisions are established on an individual facility basis to recognize expected credit losses. The specific provision is the amount that is allocated to reduce the carrying value of an impaired loan to its estimated realizable amount. Generally, the estimated realizable amount is either the fair value of any security underlying the loan, net of expected costs of realization and any amount legally required to be paid by the borrower. General provision A general provision is established when required to absorb credit losses attributable to the deterioration of credit quality within major portfolios for which specific provisions have not been established. No general provision has been established as at September 30, 2010. The provision for credit losses is maintained at an amount considered adequate to absorb estimated creditrelated losses. The provision for credit losses reflects management's best estimate of the impairment existing in the portfolio and their judgments about economic conditions. If the circumstances under which these estimates and judgments were made change, there could be a significant change to the provision for credit losses currently recognized. The provision is increased by a charge to "provision for credit losses" which is a charge to income and reduced by write-offs net of recoveries. Real estate held for resale Real estate held for resale is acquired from foreclosed loans and is carried at the lower of cost of the impaired asset prior to the realization of the related security and the underlying estimated realizable value of the security. (6) 3 15 2010 Rapport financier Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 Property and equipment Land is carried at cost. All other property and equipment are carried at cost less accumulated amortization. Amortization is calculated using the declining balance method as follows: Pavement Buildings Furniture, equipment and computers 8% 4%, 5%, 10% 20%, 30%, 45%, 55% Amortization of some furniture and equipment is also calculated using the straight-line method over 5 years. Investments Investments in securities that are classified as held-to-maturity are valued at cost or amortized cost, adjusted to recognize impairment other than a temporary impairment in the underlying value. Investments in securities that are classified as available for sale are initially recognized at acquisition cost and subsequently re-measured at fair value at each reporting date. The fair value of publicly traded securities is based on their quoted market prices. All other securities' fair value is determined by discounting the expected future cash flows at current market rates. When the fair value of the security cannot be reliably measured, it will be recorded at cost. Revenue recognition Loan interest Interest accrued on loans is recognized in income except where a loan is classified as impaired. A loan is classified as impaired when a specific provision has been established, a write-off taken or when, in the opinion of management, there is a reasonable doubt as to the ultimate collectibility of principal or interest. Interest received on an impaired loan is recognized in income only if there is no longer doubt as to the collectibility of the carrying value of the loan, otherwise, the interest is credited to the principal. Loans are generally returned to accrual status when all delinquent principal and interest payments are brought current and the timely collection of both principal and interest is reasonably assured. Investment and other income Investment and other income is recognized as revenue on an accrual basis. Service fees Service fees income is recognized on an accrual basis in accordance with the service agreement. Commissions Commissions income is recognized when the event creating the commissions takes place. (7) 2 16 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 Management estimates The presentation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions mainly considering values that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reported period. It is reasonably possible that changes in future conditions could require a material change in the recognized amounts. Market value Quoted market prices are not available for a portion of Evangeline Credit Union Ltd.'s financial instruments. Consequently, market values presented are estimates derived using redemption values, present values or other valuation techniques which may not be indicative of the net realizable value. Risk management policies Management's risk management policies are informal and are typically performed as a part of the overall management of the entity's operations. Management's close involvement in operations identifies risks and variations from expectations leading to changes in risk management activities and requirements and actions. Management has not entered into hedging transactions to manage risk. As a part of the overall management of the entity's operations, management informally considers avoidance of undue concentrations of risk, and may require collateral to mitigate credit risk. These policies and procedures are unchanged from the prior year. Foreign currency Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the exchange rate prevailing at the balance sheet date. Revenues and expenses denominated in foreign currencies are translated at the average monthly exchange rate. Credit risk Credit risk is the risk that a borrower will fail to meet principal and interest obligations. Evangeline Credit Union Ltd. is exposed to credit risk through its loans and mortgages, and mitigates its exposure to this risk through strict adherence to credit granting and monitoring policies and procedures. These policies include requiring collateral be pledged proportionate to the size and term of the loan and mortgage. Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Evangeline Credit Union Ltd. is exposed to currency risk through its cash accounts and member deposits. Evangeline Credit Union Ltd. maintains deposits in foreign currencies to service its member accounts. (8) 3 17 2010 Rapport financier Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 Financial instruments Fair value of financial instruments The fair value of Evangeline Credit Union Ltd.'s financial instruments are derived using the valuation methods and assumptions described below. The estimated fair values disclosed do not reflect the value of items that are not considered financial instruments, such as property and equipment. Since many of Evangeline Credit Union Ltd.'s financial instruments lack an available trading market, the fair values represent estimates of the current market value of instruments, taking into account changes in market rates that have occurred since their origination. Due to the estimation process and the need to use judgment, the aggregate fair value amounts should not be interpreted as being necessarily realizable in an immediate settlement of the instruments. The following methods and assumptions were used to estimate the fair value of financial instruments: (a) the fair values of cash and equivalents, current accounts, accrued loan interest, real estate held for resale, accrued interest payable and other liabilities are assumed to approximate book values due to their short-term nature. (b) The amortized cost of floating rate loans and mortgages and members deposits are assumed to equal book value as the interest rates automatically reprice to market. (c) The amortized cost of fixed rate loans, mortgages and fixed rate deposits is determined by discounting the expected future cash flows of these loans and deposits at the current market rates for products with similar terms and credit risks. (d) The fair value of available for sale investments cannot be reliably measured, therefore, they will be recorded at cost. The entity classifies financial instruments using the following criteria: Loans, mortgages and receivables Evangeline Credit Union Ltd. classifies non-derivative financial assets resulting from the delivery of cash or other assets by a lender to a borrower in return for a promise to repay on a specified date or dates, or on demand, usually with interest, as loans, mortgages and receivables. Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the entity has the intention and ability to hold to maturity. Available for sale Available for sale financial assets are those non-derivative financial assets that have been so designated by management or have not been classified as loans, mortgages, receivables or held to maturity investments. (9) 2 18 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 3 Loans and mortgages Impaired Loans $ (included in total) Total $ Personal Business Mortgage Lines of credit and overdrafts Student loans League Savings and Mortgage 2010 2009 Net $ Net $ Specific Provision $ 9,571,933 17,326,271 15,657,081 8,372,956 1,366,518 1,648,014 67,773 2,638,804 74,299 72,760 - 50,870 1,233,129 46,119 72,760 16,000 - 9,521,063 16,093,142 15,610,962 8,300,196 1,350,518 1,648,014 10,607,743 14,774,032 16,138,656 7,286,576 1,401,162 711,257 53,942,773 2,853,636 1,418,878 52,523,895 50,919,426 Continuity of provision for impaired loans 2010 $ Provision for impaired loans - Beginning of year Add: Recoveries during the year Provision for loan losses Less: Amounts written off during the year 1,329,665 8,740 128,500 (48,027) Provision for impaired loans - End of year 1,418,878 2009 $ 1,284,258 11,623 249,813 (216,029) 1,329,665 Mortgages and other loans In 2010, mortgages are secured by realty mortgages with an average interest rate of 5.386%. Personal and business loans have an average rate of 6.585%. Line of credits and overdrafts have an average rate of 6.127% and 11.137%, respectively. Other loans are priced at market rates unless circumstances warrant special considerations. The loans are secured by an assignment of specific call deposits and share capital of the borrower and other specific assigned securities. Evangeline Credit Union Ltd.'s prime lending rate Evangeline Credit Union Ltd.'s prime lending rate is set by the Board of Directors based on the prime interest rate of other chartered banks in Canada. The prime rate at September 30, 2010 was 3.00% (2009 - 2.25%). (10) 3 19 2010 Rapport financier Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 4 5 Property and equipment 2010 2009 Cost $ Accumulated amortization $ Net $ Net $ Land 36,289 Buildings 1,399,728 Furniture, equipment and computers 1,203,167 Pavement 60,526 587,579 962,924 10,013 36,289 812,149 240,243 50,513 36,289 848,179 172,998 12,131 2,699,710 1,560,516 1,139,194 1,069,597 Investments Held to maturity: Liquidity reserve deposit Available for sale: Credit Union Central shares League Savings & Mortgage shares League Data shares Co-operative membership Provincial Student Loan Reserve Fund 2010 Amortized Cost $ 2009 Amortized Cost $ 3,874,000 3,546,000 2010 Fair Value $ Cost $ Fair Value $ 2009 Cost $ 658,025 658,025 638,859 638,859 66,944 30,820 2,291 66,944 30,820 2,291 66,944 30,820 2,291 66,944 30,820 2,291 - - 521 521 758,080 758,080 739,435 739,435 Total investments 4,632,080 4,285,435 In order to meet the Credit Union national standards, Evangeline Credit Union Ltd. is required to maintain on deposit in Central Credit Union of Prince Edward Island an amount equal to 6% of prior year assets. The deposit bears interest at a variable rate throughout the year. (11) 2 20 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 No market exists for shares of Credit Union Central of Prince Edward Island except that they may be surrendered on withdrawal from membership for proceeds equal to the paid-in value, to be received in accordance with a Evangeline Credit Union Ltd. by-law providing for the redemption of its share capital. All other equities with no specified maturity date are classified as available for sale. As there is no market value for the shares in Co-operatives, the fair value of the shares is estimated at amortized cost. 6 Member deposits Share accounts (notes 8 and 12) Savings and Plan 24 Chequing accounts Term deposits RRSP and RRIF 2010 $ 2009 $ 11,537,099 10,013,123 13,469,653 8,385,941 19,147,074 9,686,463 9,479,551 12,625,677 9,012,977 18,486,825 62,552,890 59,291,493 Share accounts include the $5 membership share plus individual member deposits. Share accounts pay a dividend return at the discretion of the Board of Directors. Privileges of the shares are under the authority of the Board of Directors. The dividend rate declared and paid for 2010 was 1.50% (2009 - 1.75%) based on the average minimum monthly share account balance. Savings and Plan 24 are on a call basis and earn a variable interest rate ranging from 0.15% - 2.75% and 0.15% - 0.50%, respectively. Chequing accounts are on a call basis and pay interest at Evangeline Credit Union Ltd.'s stated rates. Non-redeemable term deposits for periods of one to five years generally may not be withdrawn prior to maturity, without penalty. Redeemable term deposits may be withdrawn, subject to an interest reduction. Withdrawal privileges on all deposit accounts are subject to the overriding right of the Board of Directors to impose a waiting period. Fixed term deposits bear interest at various rates ranging from 0% - 5% and extend for a term of up to 5 years. RRSP and RRIF Concentra Financial is the trustee for the registered savings plans offered to members. Under an agreement with the trust company, members' contributions to the plans, as well as income earned on them, are deposited in the credit union. On withdrawal, payment of the plan proceeds is made to the member, or the parties designed by them, by the credit union, on behalf of the trust company. RRSP and RRIF term deposits bear interest at various rates. (12) 3 21 2010 Rapport financier Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 7 Contingent liability Outstanding guarantees on behalf of members 8 2010 $ 2009 $ 284,500 333,500 Share accounts Unlimited membership shares, with a par value of $5 each, non-transferable, redeemable by Evangeline Credit Union Ltd., retractable by shareholders subject to Evangeline Credit Union Ltd.'s right to suspend redemption, if the redemption would impair the financial stability of Evangeline Credit Union Ltd., for a period of up to twelve months by Board resolution and indefinitely by Board resolution with the approval of the Credit Union Deposit Corporation. Dividends are payable at the discretion of the Board of Directors. 9 Income taxes Evangeline Credit Union Ltd. has an unrecognized future income tax asset of $23,468 (2009 - $25,212). The unrecognized future income tax benefit is as a result of $195,563 (2009 - $200,892) of temporary differences available to reduce taxable income in future years. 10 Line of credit availability In 2010, Evangeline Credit Union Ltd. had an approved line of credit with Credit Union Central of Prince Edward Island of $6,000,000. As of September 30, 2010, the line of credit was not being utilized. 11 Related party transactions Evangeline Credit Union Ltd. provides financial services to members. These members hold the loans and mortgages and member deposits and therefore the interest income and interest expense are transacted in the ordinary course of business with these members. (13) 2 22 www.evangelinecreditu.com Financial Report Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 12 Regulatory equity Evangeline Credit Union Ltd. has agreed to maintain an equity level equal to 5% of the total assets. In accordance with the recommendations of the Canadian Institute of Chartered Accountants related to the financial statement presentation of financial instruments, the ownership shares are presented in the balance sheet as financial liabilities. At September 30, 2010, the equity level for regulatory purposes is as follows: 2010 $ 2009 $ Ownership shares Members' equity 27,650 4,842,231 28,105 4,399,994 Total regulatory equity 4,869,881 4,428,099 68,266,224 64,555,827 Total assets Equity level 7.10% (14) 3 23 2010 6.86% Rapport financier Evangeline Credit Union Ltd. Notes to Financial Statements September 30, 2010 13 Interest rate sensitivity The following table sets out assets and liabilities on the earlier of contractual maturity or repricing date. Use of the table to derive information about the company's interest rate risk position is limited by the fact that certain borrowers may choose to terminate their financial instruments at a date earlier than contractual maturity or repricing dates. For example, notes receivable are shown at contractual maturity but certain notes could prepay earlier. Assets Cash and equivalents Current accounts Effective interest rate Investments Effective interest rate Loans and mortgages Effective interest rate Lines of credit and overdrafts Effective interest rate League Savings & Mortgage reverse MOP program Accrued loan interest receivable Real estate held for resale Prepaid expenses Income taxes receivable Property and equipment Under 1 year $ Over 1 to 5 years $ 7,883,383 1.00% 3,874,000 2.00% 6,963,519 5.46% 8,372,956 6.18% 34,728,003 6.13% - 118,034 3.66% - 1,529,980 4.64% - 1,730,732 - 1,730,732 7,883,383 - - 758,080 4,632,080 - 42,502,925 - 8,372,956 - - 1,648,014 - 163,381 76,674 94,364 22,521 1,139,194 163,381 76,674 94,364 22,521 1,139,194 811,403 3,984,946 68,266,224 - 636,780 51,015,791 - - 11,537,099 - - 492,905 378,198 492,905 378,198 - - - 4,842,231 - 4,842,231 - 44,785,377 17,130,733 - 6,350,114 68,266,224 (17,573,485) 19,127,250 811,403 36,257,983 Liabilities and surplus Member deposits Effective interest rate Share deposits Effective interest rate Accrued interest payable Other liabilities 33,248,278 1.02% 11,537,099 1.50% - 17,130,733 3.47% - Interest rate sensitivity gap Total $ - 27,211,892 Total liabilities and surplus Not interest rate sensitive $ - Total assets Undistributed earnings Over 5 years $ 811,403 5.57% - (2,365,168) - As at September 30, 2010, Evangeline Credit Union Ltd.'s net interest spread was 3.67% (2009 -3.92%). The net interest spread is calculated by expressing the difference between (a) the percentage of income earned on the average year-end interest bearing assets and (b) the percentage of costs of capital and borrowings on the average year-end interest bearing liabilities. (15) 2 24 www.evangelinecreditu.com 25 Statistiques Statistics Capitaux propres Equity Les capitaux propres mesurent de la stabilité de la Caisse populaire. Il s’agit de la valeur nette réelle de la Caisse populaire et appartient aux membres. Plus l’organisation possède de capitaux propres, plus elle est stable et rentable. Nous continuons à accroître nos capitaux propres au-delà de la norme nationale de 5 pour cent de l’actif. Depuis le 30 septembre 2010, le niveau de nos capitaux propres se situe à 7,09 pour cent, représentant 4 842 231 $. Equity is the Equité / Equity Standard measurement of the 7.50% Credit Union’s stability. It is the actual net 7.00% worth of the Credit Union and is owned by 6.50% its members. The more 6.00% equity an organization has, the more stable 5.50% and profitable it is. We continue to grow 5.00% our equity past the national standard of 4.50% 5.0% assets. As of September 30th, 2010, 4.00% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 equity stands at 7.09 % A nnée / Y ear s or $4,842,231. Croissance Growth Millions Dépôts des propriétaires / Owner Deposits Prêts des propriétaires / Owner Loans Actifs / Assets $75 $60 $45 $30 $15 $0 La croissance • est une mesure de succès; • est le reflet du degré d’acceptation de la Caisse populaire dans la communauté; • est le reflet du niveau de satisfaction des membres quant aux services offerts. Growth is • a measurement of success • how well the Credit Union is accepted in the community • how satisfied the members are with the service offered 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 26 www.evangelinecreditu.com Statistiques Statistics Parts $2,123,737 $11,537,099 Savings REÉR & FERR Dépôts à terme $8,385,941 Term Deposits Shares Hypothèques $17,965,645 Mortgages $9,571,933 Personal Loans Comptes de chèques RRSP & RRIF $13,371,157 Prêts étudiants Prêts commerciaux $16,665,721 Commercial Loans 27 2010 Chequing Accounts $1,366,518 Marges de crédit Student Loans $8,372,956 Lines of Credit Total des prêts Total Loans Prêts personnels $19,147,074 Total des dépôts Total Deposits Épargnes Tel que prévu, l’économie mondiale a poursuivi sa lancée en 2010 à la suite de la profonde récession de 2007-2008. Les pays en développement tels que la Chine et le Brésil ont mené le rebondissement grâce à une forte croissance. Parmi les pays développés, le Canada a connu l’un des meilleurs rendements au monde. Le redressement aux États-Unis et en Europe cependant a été relativement plus modeste. Rod MacInnis CGA, CFP [email protected] 888-5530 854-2699 Après une forte augmentation en 2009, les marchés du Canada et des États-Unis ont affiché de faibles gains jusqu’à présent en 2010, le Canada étant en tête de liste. La prochaine étape du redressement du marché se produira seulement lorsque les investisseurs auront bon espoir que le redressement économique sera réel et durable. Il faudra s’armer de patience. Alors que le pire de la crise financière semble passé, l’économie mondiale fait toujours face à des défis, et une reprise économique complète prendra du temps. Le meilleur moyen pour un investisseur de composer avec l’incertitude économique est de concentrer sur ses objectifs financiers à long terme et de demeurer fidèle à un plan d’investissement bien diversifié et solide, fait sur mesure selon sa situation individuelle. Si les marchés financiers suivent le parcours de redressements antérieurs, le rendement, au cours des prochaines années, devrait être intéressant. As expected, the global economy continued its recovery in 2010 following the severe recession of 2007/08. Developing countries such as China and Brazil have led the rebound with strong growth. Among developed countries, Canada has been one of the world’s better performers. The turnaround in the U.S. and Europe, however, has been relatively more modest. After a strong advance in 2009, the markets in Canada and the U.S. have posted small gains thus far in 2010 with Canada leading the way. The next phase of the market recovery will only occur as investors become more confident that the global economic recovery is real and sustainable. Patience will be required. While the worst of the credit and financial crisis appears to be over, the global economy still faces challenges and a full economic recovery will take time. The best way for an investor to deal with economic uncertainty is to focus on their long-term financial goals and stay true to a sound, well diversified investment plan tailored to their individual situation. If the markets follow the path of previous recoveries, returns over the next few years should be positive. 28 www.evangelinecreditu.com Prix Volunteer bénévole de l’année of the Year Award This award honours and recognizes community volunteers for their dedication to their community and achievements in cooperative activity. Engagées envers nos jeunes Pompiers de Tyne Valley Tyne Valley Fire Department 2009 Ce prix rend hommage et reconnaît les bénévoles du milieu pour leur dévouement envers la collectivité et leurs réalisations en activité coopérative. Committed to our youth A program designed to educate students on the notion of savings and to respect the value of money. Students enhance their math, teamwork and leadership skills. They learn at a young age how to prepare for their financial future. En arrière de gauche à droite / Back row left to right : Myranda Kelly, Michelle Arsenault, Natalie Leblanc, Zoé Arsenault, Liane Gallant, Jessica Gallant & Shana O’Brien Rang en avant de gauche à droite / Front row left to right : Krista Gallant, Amy Gallant, Diane Irakoze & Robyn Gallant 29 2010 Comité dépôts étudiants Student Deposit Committee Un programme conçu pour éduquer les élèves et leur apprendre la notion d’économiser et de respecter la valeur de l’argent. Par l’entremise de ce programme, les élèves en apprennent davantage au sujet des mathématiques, du travail en équipe et du leadership. Ils se préparent pour leur avenir financier dès un jeune âge. Investing in our youth Investir dans nos jeunes Récipiendaires de bourses Scholarship recipients 2010 Curtis Arsenault Cori-Ann Arsenault Brittany Craig Donald Ford Cleve McNeill Micah Melissa Gallant Justin Murphy 30 www.evangelinecreditu.com Brown Natalie Gallant Karen Noye Provincial Event Commanditaire sponsor provincial 2 3 2010 4 relais pour la vie 1 Comme commanditaire provincial en 2010, le système des Caisses populaire de l’Île a contribué 60 000 $ au Relais pour la vie. As provincial event sponsor in 2010, the PEI Credit Union system contributed a total of $60,000 to the Relay for Life. 5 2. En 2010, l’équipe de la Caisse populaire Évangéline, Race for the Cure, a ramassé 6 244 $ pour Relais pour la vie. Un GROS MERCI à tous ceux qui ont appuyé nos activités de financement. / In 2010, Evangeline Credit Union’s Team, Race for the Cure, raised $6,244 for Relay for Life. A BIG THANK-YOU to everyone who supported our fundraising efforts. 3. Gagnantes du gros lot de 500 $ / Winners of the $500 jackpot prize : Diane Richard (employée/employee), Julia Arsenault & Doris Arsenault (gagnantes/winners) & Diane McInnis (employée/employee). 4. Les Caisses populaire de l’Île ont été reconnus à l'échelle nationale en 2010. Le Prix du championnat de la communauté est en reconnaissance de l'implication de la Caisse populaire Évangéline à l’évènement Relais pour la vie de la Société canadienne du cancer. / PEI Credit Unions were recognized nationally in 2010. The Community Champion Award is in recognition of Evangeline Credit Union’s involvement in the Canadian Cancer Society’s Relay for Life event. 5. Gagnante du tirage 50/50 / Winner of the 50/50 draw: Desoray Casey 1/2 $5,434 & Diane Richard (employée/employee). 31 2010 relay for life 1. Membres de l’équipe de la Caisse populaire Évangéline / Members of Evangeline Credit Union’s Team: Sheila-May Muttart, Diane McInnis, Freda Perry, Kelly MacDougall, Yolande Richard, Mark Campbell, Corinne Arsenault, Diane Richard & Alfred Arsenault. make your own an important purchase presents moves When itself, a personal loan can provide a convenient financing solution. Whether you’re thinking about financing a vehicle, renovating or buying a home, or debt consolidation Evangeline Credit Union is here for you. With our products, services and honest advice, we’ll empower you to make wise financial decisions. Wellington Tyne Valley 854-2595 831-2900 www.evangelinecreditu.com Votre argent/Your Money • • • • • • • • • • • • • • • • • Service de chèque/Chequing services Compte de chèque personel/ Personal chequing account Forfait MasterPlan Packages Compte Prime Account Compte de chèque américain / US chequing account • • • • • • • Comptes d’épargnes/ Savings accounts Dépôts étudiants / Student Deposits Compte d’épargne mensuel / Monthly Savings Plan Compte d’épargne libre d’impôt / Tax-Free Savings Account Services électroniques/Electronic Services Guichet automatique / ATM Carte de débit / Debit card Global Payment MasterCard Points Choice Rewards Points • • • • • • • Cartes de crédit MasterCard Credit Cards TéléService / TeleService En ligne MemberDirect online banking Service bancaire mobile/ Mobile Banking Courtage enligne Credential Direct online Brokerage Chèques de voyage/ Travellers’ Cheques Coffret de sécurité / Safety Deposit Boxes Dépôts de nuit / Night Deposit Bourses d’études / Scholarships Paiement de factures / Bill Payments Chèques certifiés / Certified Cheques Mandats de poste / Money Orders Préparation d’impôts sur le revenue / Income Tax preparation Votre financement / Your Financing Plan 24 Services supplémentaires / Additional services • Continue…. Services supplémentaires / Additional services Prêts & hypothèques/Loans & Mortgages Prêts personnels / Personal Loans Hypothèques / Mortgages Lignes de credit / Lines of Credit Prêts sur valeur domicile / Home Equity Loans Prêts d’efficacité énergétique / Energy Efficient Loans Prêts REERs / RRSP Loans Prêts étudiants / Student Loans Votre avenir / Your Future • • • • • • • • • Investissements / Investments Dépôts à terme / Term Deposits REER / RRSP • • • • Continue….. Assurances / Insurances Assurance marge de credit / Line of Credit Insurance Protection pour petite enterprise / Small Business Insurance Assurance voyage / Travel Insurance Assurance protection du solde de la carte de crédit / Credit Card Balance Protection Insurance Gestion des finances / Financial Management Offert par Stratégies financières Credential / Provided by Credential Financial Strategies • • • Gestion de l’argent / Money Management • Planification des études post-secondaire / Education Planning • • • Assurances / Insurances Planification d’investissements / Investment Planning Planification de la retraite / Retirement Planning Planification de la succession / Estate Planning Plans de santé et dentaire / Health & Dental Plans Votre entreprise/Your Business FERR / RRIF Services commerciaux / Commercial Services RÉÉÉ / RESP Fonds mutuels / Mutual Funds Assurances / Insurances Assurance vie / Credit Life Assurance invalidité / Credit Disability Perte d’emploi / Loss of Employment Maladie critique / Criticall Illness 32 www.evangelinecreditu.com • • Prêts commerciaux / Commercial Loans • • Business MasterCard • • Marges de crédit commerciaux / Commercial Lines of Credit Programme pour marchands / Merchant Program Service de la paie / Payroll services Agri-investissement / AgriInvest