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

Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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Page 1: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

2017Annual�Report

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

Page 2: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

A n n u a l� R e p o r t� 2 0 1 7

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

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

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

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

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

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

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

Organizational�Growth

Financial�Strength�&Long�Term�Viability

Community�&Member�Engagement

Member�Financial�Services

Mission

Vision

Values

Page 3: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

Get the AppKCCU to Go kccu.ca

KCCU�Board�of�Directors

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

Report�of�the�Chief�Executive�Officer

Report�of�the�CFO/Credit�Manager

Report�of�the�Audit�Committee

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

Community�Involvement�and�Charitable�Contribution

In�Memoriam�2017

Balance�Sheet�2017

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

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

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

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

Page 4: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

Robert Trentadue, retired, Purolator

Norman Meyers, retired, KGH

Lisa Dirocco, The Bay

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

Reta McCormick, retired entrepreneur

Joyce Phillip, retired, Queen’s University

Bram Fisher, retired entrepreneur

*term expires

Chair

Vice-Chair

Secretary

Director

Director

Director

Director

2019

2017*

2018

2019

2017*

2017*

2018

A n n u a l� R e p o r t� 2 0 1 7

Page 5: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

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

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

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

Respectfully�submitted,

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

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

R e p o r t o f t h e

Page 6: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

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

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A n n u a l� R e p o r t� 2 0 1 7

Page 7: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

Respectfully�submitted,�

Jon�Dessau,�CEO

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

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

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

Page 8: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

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

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

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

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

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

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

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

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A n n u a l� R e p o r t� 2 0 1 7

Page 9: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

���������2016

14,397,8461,030,147

66,390,86311,561,696

1,338600

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

126,403,4232,321,359

12,269

6,177,1261,810,650

23,714,18631,701,962

456148134738

14,036,9861,893,406

75,105,77910,032,891

1,357635

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

136,826,4541,150,416

12,319

6,381,0421,845,250

26,972,92535,199,269

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

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

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

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

���������2017

451127144722

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

Personal�Loans�and�Lines�of�Credit

Member�Ownership�(Equity�Shares)

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

Wealth�Management�AUM*

Total�Approved�Credit

Consolidated�Loans

Variable�Mortgages

Savings/Chequing

Fixed�Mortgages

Approved�Loans

Term�Deposits

Personal�LoansLines�of�Credit

Commercial

Mortgages

Deposits

Members

OtherAssets

Page 10: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

�Norman�Meyers�Audit�Committee�Chair

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

A n n u a l� R e p o r t� 2 0 1 7

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

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

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

R e p o r t o f t h e

Page 11: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

2nd�PRINCIPLE:

1st�PRINCIPLE:

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

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

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

3rd�PRINCIPLE:

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

4th�PRINCIPLE:

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

5th�PRINCIPLE:

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

6th�PRINCIPLE:

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

7th�PRINCIPLE:

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

Page 12: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

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

A n n u a l� R e p o r t� 2 0 1 7

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

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

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

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

Page 13: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

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

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

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

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

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

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

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

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

•�Mickael�Broly��Ecole�Mille-Iles

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

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

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

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

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

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

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A n n u a l� R e p o r t� 2 0 1 7

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

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

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

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

Page 15: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

2016

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

$�5,687,00627,644,94092,759,601

400,412119,504

�-$126,611,463

$111,880,967451,709228,492

2,321,35916,935

114,899,462

11,502,796209,205

11,712,001�$126,611,463

2017

$�6,353,43529,227,875

100,593,354530,66576,34344,782

$136,826,454

$122,830,984�464,511258,684

1,150,416-

124,704,595

12,115,4666,393

12,121,859�$136,826,454

Director

Director

Accumulated�other�comprehensive�income�

Liabilities�and�Members'�Equity

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

Dividends�and�interest�rebate�payable

Cash�and�cash�equivalents��(Note�2)�

Deferred�income�tax�(Note�7)�

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

Reserves�and�members'�equity�

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

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

Other�assets�(Note�6)

On�behalf�of�the�Board:

Members'�Equity

December�31

Liabilities

Assets

Page 16: Annual Report - Kingston Community Credit Union · Community Involvement and Charitable Contribution In Memoriam 2017 ... Kingston General Hospital and Providence Care patient care

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

A n n u a l� R e p o r t� 2 0 1 7