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BIGGAR & DISTRICT CREDIT UNION€¦ · BIGGAR & DISTRICT CREDIT UNION MARCH 20 TH 2019 . I, Bill Hammel, General Manager of Biggar & District Credit Union make oath and say: 1. The

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BIGGAR & DISTRICT CREDIT UNION INFORMATION MEETING

March 20, 2019

AGENDA

1. Call to Order

2. Appoint Secretary

3. Adopt Agenda

4. Minutes of the Meetings held March 2018

5. Affidavit of Completion of Reports / Proof of Notice

6. President’s Message

7. Directors’ Reports

8. Management Discussion and Analysis

9. Auditor’s Report

10. Financial Statements

11. Question Period

12. Adoption of Reports

13. Ratification of Auditors for 2019

14. Employee Service Awards

15. New Business

16. Door Prizes

17. Adjournment

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BIGGAR & DISTRICT CREDIT UNION PERDUE BRANCH INFORMATION MEETING

March 19, 2019

AGENDA

1. Call to Order

2. Appoint Secretary

3. Adopt Agenda

4. Minutes of the Meetings held March 2018

5. President’s Message

6. Directors’ Reports

7. BDM Report

8. CEO Update

9. Questions/Discussion

10. Door Prizes

11. Adjournment

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VISION

Working together to build a prosperous community and to provide the best

full financial service.

MISSION We provide innovative, high quality

financial products and services designed

to meet the needs of our members and our community.

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VALUES To maintain continuity with the system direction, the board and management of Biggar & District Credit Union made the decision to adopt the system values as defined in the System Strategic Direction 2007 and Beyond acknowledging its current values all align with this document. 1. Cooperation and Accountability

We work together through a belief that we can accomplish more together than alone. We take into account the effect of our actions on others. In the tradition of our founders, co-operative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.

2. Communication We communicate in an open, effective and timely manner.

3. Community Impact We actively support the development of our communities locally, provincially and beyond. Our communities are stronger because of the credit union system.

4. Employee Satisfaction We respect our employees and their contribution to our success. We encourage employee involvement and participation. We recognize and reward them for their creativity, teamwork and achievement. We support their development by providing training and educational opportunities. We respect their need to balance personal and professional lives.

5. Financial Strength Our strong financial performance allows us to invest in members and the community for future growth. We balance the need for financial results with the needs of our members and communities. The trust and confidence of our members is maintained through sound business practice.

6. Product and Service Excellence We work with our members and communities to understand their needs, and respond with innovative, high quality products and services. Our employees provide friendly, knowledgeable and helpful service.

7. Professional Conduct Members’ financial affairs are conducted with integrity and in a professional manner. Our ethical principles are rooted in concern for the individual. Confidentiality is an integral part of the way we do business.

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Minutes of the 21st Annual Informational Meeting of the Perdue Branch of the Biggar and District Credit Union

Meeting held at the Perdue Rec Complex on March 20th, 2018 Wayne Dollansky welcomed everyone and thanked the group from the Perdue Rec Complex group for preparing a wonderful meal.

The meeting was called to order at 6:47, Dean McCallum was appointed as secretary.

Jim Rickwood moved to adopt the agenda, seconded by Caroline deBussac. Carried.

Wayne asked everyone to review the minutes of the prior year’s meeting, Bob Lemon moved to adopt the minutes, seconded by Dale Martin. Carried.

Wayne Dollansky presented the President’s Message. Wayne provided some highlights from the past year. He advised the membership that a dividend of 5% had again been declared. This totaled $278,365.00

Wayne thanked Bill and all the staff for all the efforts during the past year.

Wayne announced the Biggar and District Credit Union and Landis Credit Union have been exploring the possibility of merging.

Wayne also thanked the members for their continued support during 2017.

Wayne introduced the new board of directors as well as the outgoing board members.

Adam Johb gave the BDM report. He provided highlights from the past year. This included the scholarship program, Ready, Set, Succeed and Each one Teach One member education programs. Adam also updated on the new website and changes to the app.

Adam introduced Angela Ward as a new MSR working in Perdue and Biggar.

Adam thanked everyone for their support over the past year.

Caroline deBussac gave the People Report.

Owen Nicklin gave the Money Report. Owen reviewed the key financial highlights of the past year. Owen also touched on donations and the patronage program.

Jim Rickwood gave the Report on Development.

Wayne Dollansky called on Bill Hammel to review the Management Discussion and Analysis Report.

Bill identified four key strategic areas for the Credit Union. These are: People, Growth, Financial and Service Delivery.

Bill discussed our Key Performance Drivers and reviewed some of our key financial goals.

Bill explained the concept of Enterprise Risk Management and identified some of the key risks facing the Credit Union which included: Strategic Risk, Market Risk, Liquidity Risk, Credit Risk, Legal and Regulatory Risk, Operational Risk.

Bill briefly explained some of the ways the Credit Union mitigates these risks.

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Bill explained how the Credit Union is working with Unity Credit Union with the goal to gain technological efficiencies and to build a broader deeper department.

Bill reviewed Corporate Structure and Governance.

Bill introduced the staff of both the Credit Union and Insurance Agency. He thanked the staff for the contribution made during the past year.

Wayne Dollansky announced that long term service awards would be presented at the Biggar meeting tomorrow. These would be presented to:

Janice Christensen 5 years, Lyndsey Poole 10 years, Karla O’Brian 15 years, Michelle Rea 20 years, Karen Silvernagle 20 years, Bill Hammel 35 years.

Eight door prizes were drawn.

Wayne Dollansky thanked everyone for attending.

Norm deBussac adjourned the meeting at 7:45.

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Minutes of the Biggar and District Credit Union’s 68th Annual Meeting held March 21st, 2018

at the Biggar Community Hall President Wayne Dollansky thanked the Biggar United Church for the delicious supper. Wayne Dollansky stated that 157 guests signed the guest book and there were 12 special guests in attendance. This is sufficient for a quorum which means the Annual Meeting can proceed. Wayne called the meeting to order at 6:58 pm Wayne introduced guests from CUMIS, Innovation Credit Union, Landis Credit Union, Unity Credit Union, and Prairie Centre Credit Union. Lisa Haynes volunteered to be the secretary for the evening. Wayne Dollansky asked everyone to read over the agenda as well as the minutes from the 2017 Annual meeting. Jim Rickwood made motion to accept the agenda as presented. Brian Fick seconded. Carried. Janice Christensen made motion to accept minutes as presented. Carolyn de Bussac seconded the motion. Carried. Wayne Dollansky reviewed the Affidavit of Completion of Reports and the Proof of Notice. Wayne Dollansky read the President’s Message and introduced the Board of Directors. Wayne also announced a possible merger with Landis Credit Union. He gave reasons why the idea of a merger is being entertained and the steps required for it to move forward. He explained that the Landis membership will have to vote in favor of a merger. If it is approved by Landis then the Biggar membership will vote to see if they are in favor. The merger will move forward only if both memberships approve. The following reports were presented by the following Directors: People – Carolyn de Bussac Money – Owen Nicklin Development – Jim Rickwood Wayne Dollansky called on Bill Hammel to present the Management Discussion and Analysis. After asking if there were any questions regarding the Management Discussion and Analysis, Bill Hammel introduced the staff of the Credit Union. Bill Hammel announced Anita Silvernagle and her curling team are off to defend their National Senior Women’s Curling title in Stratford Ontario March 22 and wished her and her team the best of luck as well as the best of luck in Sweden in April when they are competing for the World title as well. He then called on Anita to give her report on the insurance office and introduce her staff. Wayne Dollansky called on Dean McCallum who gave a report about the investment side of the Credit Union and the world markets. Wayne Dollansky called on Owen Nicklin to give the Auditor’s Report and present the financial reports.

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Owen asked if there were any question regarding any of the reports. There were none. Janice Christensen made motion to adopt all reports as presented. Earl Nostbakken seconded. Carried. Wayne Dollansky called on Dale Martin, on behalf of the audit committee. Dale thanked Virtus Group for their services this past year and made the motion to appoint Virtus Group as auditors for the upcoming year. It was seconded by Rob Green. Carried. Wayne explained that since there were only 3 nominations that came forward for board positions there will be no vote and that Stacie Beadle, Michele Keith and Sheila Itterman have accepted positions on the board. One seat remains vacant. He also mentioned that they will be advertising about the benefits of being on the board on an ongoing basis in hopes that more people become interested in becoming a board member. Wayne Dollansky presented service awards to the following staff: Janice Christensen – 5 years Lyndsey Poole – 10 years Karla O’Brian – 15 years Michelle Rea – 20 years Karen Silvernagle – 20 years Bill Hammel – 35 years Wayne Dollansky asked if there was any new business or questions. There were none. Door prizes were handed out. William Downton adjourned the meeting at 8:17 p.m.

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AFFIDAVIT OF COMPLETION OF REPORTS FOR THE INFORMATION MEETING

BIGGAR & DISTRICT CREDIT UNION MARCH 20TH 2019

I, Bill Hammel, General Manager of Biggar & District Credit Union make oath and say: 1. The 2018 financial statements were completed Monday, March 4, 2019 and 2. The 2018 financial statements were made available to the membership Tuesday, March 5, 2019 which is at least 10 days prior to the annual meeting.

Sworn before me at the town of ) ) Biggar, in the Province of ) ) Saskatchewan, this 6th day of )________________________ ) Bill Hammel March, 2019 )

______________________________ A Notary Public in and for the Province of Saskatchewan My commission expires February 28, 2022

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PROOF OF NOTICE

I, Bill Hammel of the town of Biggar in the Province of Saskatchewan, Treasurer of the Biggar & District Credit Union TO WIT: That I have personal knowledge that the notice of this annual meeting was duly prepared

and given to its members as required by the Bylaws of the Credit Union. Notice was posted in the credit union on February 22, 2019 and published in the Independent.

Sworn before me at the town of Biggar ) in the Province of Saskatchewan ) this 5th day of March, 2019 )______________________ Bill Hammel

______________________________________ A Notary Public in and for the Province of Saskatchewan My commission Expires February 28, 2022

QUORUM The credentials committee reported that there were _____ members and _______ visitors present at the meeting. Thereupon the President announced that legal notice of the meeting had been given, that a quorum was present, and that the meeting was now regularly and lawfully convened and ready to transact business.

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PRESIDENT’S MESSAGE On behalf of the Biggar and District Credit Union’s Board of Directors, I would like to thank everyone for attending our informational meetings and for the member and customer support we have experienced. It truly is what elevates our credit union to the successful cooperative that we have become. Change seems to be a constant in our lives, and it is no different at our credit union. For example, where we would be normally holding our 69th Annual Meeting, we are conducting informational meetings due to the amalgamation of Biggar and District Credit Union and Landis Credit Union. Along with the technological, regulatory and market changes over the past year, the day to day internal evolution is ongoing. With the official amalgamation with Landis Credit Union completed, the process behind the scenes continues for our dedicated team of management and staff to make the system work to ensure all of our members’ and customers’ needs are met and that we remain relevant today and into the future. As a board, we are very pleased to announce a financially successful 2018 with a profit of $865,909 and declare a 5% member dividend amounting to $271,768. The accomplishment of our success is a result of a great deal of dedication and effort by our entire team. An enormous amount of respect and thanks go to all, especially to Bill for providing the leadership that makes it all come together on all levels. As part of our communities we continue to support numerous projects that enhance our environment into the future, through financial contributions and volunteerism. As we celebrate our successes, we look forward to the ongoing presence of Biggar and District Credit Union in Biggar, Landis and Perdue. Our success is, of course, the result of member and customer support, and with that continuing support we will ensure our future is as successful as our past, and for that we thank you all! Jim Rickwood President

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Directors’ Report ~~~

PEOPLE

Members: In 2018 our membership numbered 3,627. There are 476 members in the Perdue branch and 3,151 members in the Biggar branch. Directors: Directors of the 2018-19 board were elected by acclamation. There were six openings; 2 vacant positions from the previous year in addition to the expiring terms of Jim Rickwood, Bev Brown, Bob Lemon and Carolyn deBussac. There were 5 candidates nominated for these 6 positions so the elected directors were: Jim Rickwood, Sheila Itterman, Michele Keith, Stacie Beadle and Tony Danskin; two positions remained vacant. In August, Bob Atkinson and Sandi Gray were appointed to the board. The amalgamation of Landis Credit Union and Biggar & District Credit Union resulted in a new corporation. This allowed the current board of directors to continue without an election and each director’s term is extended by one year. Increasing regulatory expectations make ongoing education a constant requirement of our directors. In addition to their regular and committee meetings, they attend various training sessions throughout the year. Their use of technology helps to control educational costs through the attendance of online training and live webinars and meetings. The development cost for the directors last year was $6,076. Their dedication to educate themselves and keep current in an ever-changing environment is commendable. In 2018 your board held 11 regular meetings, 9 committee meetings, and 17 special meetings. The special meetings included webinars, workshops and strategic planning sessions. Attendance by director was as follows:

Directors' Attendance Report

Director Regular Meetings Special/Committee Meetings Atkinson 4/5 1 Beadle 10/11 10 Danskin 9/9 5 Dollansky 10/11 13 Fick 11/11 8 Gray 4/5 0 Itterman 9/9 10 Keith 10/11 8 Martin 10/11 13 Rickwood 11/11 19

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Staff: 2018 was a busy year for our staff – full of opportunities to learn about (as well as teach our members) the ever-changing technologies, tools, products and services that keep us relevant. Our staff is dedicated to continuous learning, and many of the courses they take require after-hours studying. Product and services information is constantly changing and it is important to stay abreast of current technology and trends. Fraud Prevention, Robbery Prevention, Anti-Money Laundering, and Privacy training are just a few of the many classes that all staff participates in annually. Our focus remains on finding value for our members and enhancing our service. The CIBC’s notice of branch closure provided an opportunity for us to service more fully the members we shared, and welcome new members. All staff are trained in Heart of Coaching, a program designed to build high performing teams, and DISC, a behavior/personality assessment tool. These 2 programs give staff the communication tools to work better together and to identify and understand the needs of our members and co-workers. Several staff members delivered financial literacy workshops in Biggar, and two staff trained Unity Credit Union staff to deliver these workshops in their community. Our Member Services team saw a few staff changes throughout the year. In the Perdue branch Alexandra Johnson was hired to replace Shelly Eaton, who remains there but in a slightly different role – administrative work has been added to her job. The frontline in Biggar saw the return of Sabrina Yurchak, to help out for the summer and in peak times. We also added Sheryl Bala, Lorie Trinidad, and Jade McLeod to the team. The Wealth Management team saw little change in the team structure but their knowledge base continues to grow as the entire team continues to work towards achieving their Personal Financial Planners designations. Heather Ivanco remains on medical leave. The Support Services area experienced significant changes. Owen Nicklin retired in December after 40 years of service, 5 of which were in Biggar. Bryce Kramer has been training to replace Owen as the VP of Support Services. Josh Noble, Manager of Innovation, leads our Technology Department as well as Unity Credit Union’s. Rob Thomas and Carlene Genis joined the team to implement the Electronic Content Management (OnBase) project. The Lending Services department bid farewell to Donna Robillard in December as she retired after 35 years of service. Adam Johb replaced Bryce Kramer as the Manager of Credit and Risk, and Peggy Lake was hired to replace Adam Johb in the Perdue Branch. Jenna Frey was hired in December and is training to lend in the agricultural and consumer sectors. Biggar & Landis Insurance Services staff welcomed Stephanie Nichol in February 2018. Chandra Archdekin continues to work as a contract employee for the agency, selling hail and Global Ag Risk Solutions (GARS) insurance. Michelle Rea is away on a medical leave. In preparation for the January amalgamation with Landis Credit Union several meetings, staff orientation and training took place. Ian Hawkins will be the Business Development Manager in Landis, and his team will consist of Kathy Ferguson, Ashley Booker, Deb Penley and Jade McLeod. Agency and credit union employees continue to be a visible part of our community and in 2018 they gave back in many ways – the most notable is by volunteering over 1,300 hours. Employees are

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involved in numerous community events and organizations, serving their own interests as well as representing the credit union – their time and dedication is crucial to the well-being of our communities. Succession planning continues to evolve with impending retirements and staff changes. It is important to transfer knowledge, cross-train and develop staff to provide seamless coverage and service for our members. The personal and professional development of our employees enhances the way we serve our members’ needs, as well as how we interact in the community and with our families. The dedication to learning and openness to change truly shows our staff’s commitment to the credit union and our members.

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Directors’ Report

~~~ MONEY

Assets: In 2018 total assets increased from $169,672,399 to $192,244,787 for an increase of $22,572,388 or 13.30%. To compare how we are doing, we look to how other credit unions grew. The provincial average growth was at 6.04%. As you can see, we are well above the provincial growth. Our growth is mainly shows in the agriculture sector, which will include new deposits from the closure of the CIBC.

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Assets

Off Balance Sheet investments are showing a small decrease from $57,680,495 to $57,494,344 for a decrease of $186,151. This is a decrease of 0.32%. Main reason is that the markets ended the year lower. Some investors are moving to guaranteed funds within the Credit Union. Our Wealth Management Department offers a wide range of investment products from stocks to mutual funds to GIC’s.

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2003 2005 2007 2009 2011 2013 2015 2017

Assets

Total assets managed by your credit union are $249,739,131. This compares to $227,352,894 last year. Overall assets have grown by $22,386,237 or 9.85%.

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Loans were at $133,945,679 last year and have grown to $137,665,437. This is a growth of $3,719,758 or 2.78%. In looking across the provincial credit unions, we see that the provincial average experienced a growth of 5.68%. Our lending risk is managed through a diverse portfolio and shows us with a low delinquency at 0.62%. Your board of directors is very pleased with the responsible manner in which members handle their loan payments.

Loans

$0

$50,000,000

$100,000,000

$150,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Loans

Liabilities: Through 2018 member deposits increased from $150,194,856 to $170,842,638 which is an increase of $20,647,782 or 13.75%. In comparison, the provincial average growth is at 6.33%. Again, we have seen increased growth, mainly in the agriculture sector, and new members. With rates increasing, we have also seen members moving to guaranteed investments with the credit union instead of brokerage investments.

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

2005 2007 2009 2011 2013 2015 2017

Deposits

Deposits

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Capital Management: Two key ratios that CUDGC (our regulator) uses to measure the strength of credit union capital are Tier 1 Capital and Risk Weighted Assets. For Tier 1 Capital (Leverage Ratio), we are looking for a minimum of 5% with a 2% buffer for a total of 7%. Our Tier 1 capital position is 9.89%. This is our equity and reserves less any goodwill or intangible assets as a percentage of total assets. Our Risk Weighted Assets are currently at 14.53%. CUDGC has a minimum standard of 8%, while our board is looking for at least 11%. As you can see, our credit union has a strong equity position. It is a representation of past financial success, and serves as the financial cushion that allows your credit union to expand product lines and develop new services. Income: Net income in 2018 was $865,909 compared to last year’s income of $1,344,429. This equates to about 0.44% of average assets. It should be noted that in 2018 we have higher than normal extra ordinary expenses. With IFRS 9, Choice Rewards, pre-paid amalgamation expenses, we have in excess of $567,000 extra ordinary expenses. If this is taken into account, our bottom line would be $1,432,909, which is in line with other years.

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2011 $4,556,031 $453,875 $1,469,014 $287,345

2012 $4,737,978 $559,156 $1,764,090 $280,675

2013 $4,723,405 $672,432 $1,823,141 $274,461

2014 $4,883,903 $571,160 $1,858,263 $272,848

2015 $5,064,265 $523,905 $2,179,612 $276,978

2016 $5,245,310 $625,282 $2,441,965 $320,839

2017 $5,420,165 $519,387 $2,569,597 $319,336

2018 $5,815,383 $889,573 $2,529,469 $387,408

Loans Investments Other Revenue Service Charges

The above graph shows a breakdown of our revenue sources. There is an increase in Loans and Investment Revenue with a decrease in Other Revenue. This is because of our growth in member deposits which in turn increases our investments and loans. The Other Revenue category is where we class the revenue for the agency, loan insurance and our Credential revenues. The service charge category is the service charges that you pay on your accounts.

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Expenses:

All expense categories are consistent with the prior year trends. Personnel expenses, General Business and Interest costs are showing the largest increases, while all other categories have maintained. Our growth and extra ordinary expenses are the main reason for these increases. Our focus on finding efficiencies will continue into 2019. Our priority remains on providing improved products and services, and giving you the high level of customer services that you expect. Profit Distribution: Your board of directors has once again declared a 5% dividend for 2018. This equates to $271,768 that will be paid back to our members. Approximately $109,791 went back to our communities in the form of monetary donations, sponsorships, promotional gifts and advertising. An additional $27,216 of free financial services was provided to community organizations in 2018. Below is a breakdown of how our profits have been distributed:

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

2010 $102,140 $200,552 $241,325 $789,236

2011 $81,690 $270,444 $258,354 $929,755

2012 $94,012 $159,073 $287,000 $1,171,091

2013 $92,131 $337,809 $270,761 $927,473

2014 $113,730 $234,659 $258,924 $913,188

2015 $98,016 $287,122 $267,706 $951,066

2016 $93,636 $442,373 $272,074 $1,153,933

2017 $102,433 $346,707 $278,365 $1,311,413

2018 $109,791 $253,658 $271,768 $865,909

Community Income Tax Dividends Reserves

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Directors’ Report

~~~ DEVELOPMENT

New Products and Services: Our priority is providing exceptional value to our members. In keeping with that objective we continue to be early adopters of new technologies. In 2018 once again most of the development and upgrades regarding technology was done behind the scenes.

In March we introduced a product called Lock’N’Block®. This new anti-fraud tool allows our members to take control of security measures with regards to their Member Card® Debit Card. It allows you to lock and unlock your debit card on our mobile app or online banking. You can block or unblock your debit card for purchases and refunds, block or unblock ATM transactions and block or unblock international transactions. If you misplace your debit card you’ll have peace of mind knowing it can’t be used until you locate it (at which time you can unlock your card and start using it again) or contact us and report it lost or stolen.

On August 1st we introduced our new credit card provider. Our new line of Collabria credit cards include Personal and Business Cards allowing us to offer both Mastercard® and Visa® products. We also offer a US dollar card. These products provide our members with benefits including FlexRewards points that can be redeemed for Cash Back, Merchandise, Gift Cards and Travel. In addition, they are enabled with Chip and PIN technology, include fraud protection tools, and provide zero liability. The Visa Business Cards allow cardholders to sign up for Visa Business Reporting a web-based reporting solution that can track business expenses and manage cash flow efficiently. As technology progresses and time passes it becomes necessary to replace and upgrade computer equipment and software. In 2018 we replaced 31 computer workstations that had come to the end of their useful life. In addition we upgraded our software to Windows 10 and Office 2016. In May we replaced our old server. The new server allows for more secure backup technology, using a virtual back up rather than a manual tape backup that is easily damaged. In 2018 we began an Electronic Content Management project to digitalize our paper files. OnBase is a digital platform that will allow us to use less paper and access member files more efficiently. This system is more secure in the event of an environmental disaster or fire, as it utilizes virtual, digital backups. In 2018 we added a Secure Wireless Network to our system in the Biggar branch. This network allows our staff to be more mobile throughout the building. It also has a Guest feature that means members can use free, secured Wi-Fi while in the building – allowing staff to assist them with troubleshooting online issues. Of course, with our ever expanding online presence, fraud is always front of mind. Managing and reducing fraud risk for our members remains a priority. We employ various means to keep our members safe, secure and well informed. Facebook is our fastest and most effective communication tool. Posts that warn about scams are consistently shared and have the greatest reach of any of our social media posts.

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Community Support: On February 8th we were pleased to bring Robb Nash to Biggar for a powerful presentation to students in grades 7-12 from the schools in Biggar and Perdue. The award-winning Robb Nash Project is a registered Canadian charity that engages young people through the power of music and storytelling to inspire hope and encourage positive life choices. Here are just a few of the other organizations receiving financial support in 2018: Perdue Pirates Sr. Hockey, Biggar Golf Club, Biggar Museum and Gallery, Biggar Rec Valley, Perdue Daycare, Biggar School of Dance, Biggar & District Arts Council, BCS2000, Perdue School and Great Plains College Scholarships, Biggar Daycare, Biggar Fibre Fair and the Biggar Music Festival. “Casual for a Cause” is a staff initiative that we are very proud to mention. Staff members donate to charities that are nominated and chosen by vote each year. They do this for the privilege of wearing jeans on Fridays. In 2018 our staff donated over $4,050 to local charities. To top up the Casual for a Cause funds going to the Canadian Breast Cancer Society in October, our staff held a bake sale and raised over $1,000 bringing the total staff donation to $1,330. Community Development: Our credit union remains a strong corporate citizen and community leader through our involvement in educational scholarships and donations to local non-profit clubs and organizations. In addition to monetary support, our staff is very active in volunteering for many boards, sporting activities and community events. In 2018 we entered into a 10 year agreement with the Town of Biggar to support the ongoing maintenance of the “Fat Cat Splash Park” located in Buckingham Park. We will be donating a total of $50,000. We are proud to encourage “Going Green” in the community. We held our 10th Annual Biggar Spring Community Cleanup on May 23rd. We were blessed with beautiful weather and many volunteers. Students from Saint Gabriel and BCS2000 schools along with local volunteers and businesses pitched in and made light work of a large task. On May 24th the students and staff of Perdue School, Perdue Daycare, The Store, the Village of Perdue, and community volunteers came together on a beautiful morning and pitched in for our 3rd Perdue Community Cleanup. In 2018 we once again partnered with the Biggar & District Family Centre to present another of our green initiatives, “Share the Warmth”. The coat and warm clothing drive was held in October. The donations of gently used and new items were distributed in early November by the Family Centre in conjunction with their clothing exchange. Member education remains a priority for us. In April our staff facilitated an “Each One Teach One, Financial Literacy” presentation at the Biggar Library on the topic of “Identity Theft and Fraud Prevention”. We also offered our 3rd annual “Ready, Set, Succeed” program for Grade 12 students in both Biggar and Perdue in May. In October our Wealth Management team hosted Peter Bowen of Fidelity Investments speaking on “Navigating the Retirement Roadmap”. The credit union participated in the parades and children’s activities for celebrations at Fair Days in Biggar and the Perdue Ag Society Fair. FATCAT was a big hit, attending in both Biggar and Perdue.

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Management Discussion and Analysis

Credit Union Market Code Biggar and District Credit Union voluntarily adheres to the Credit Union Market Code. This code has been jointly developed by Saskatchewan credit unions, SaskCentral and Credit Union Deposit Guarantee to ensure the protection of credit union members. The code sets forth guidelines for the following areas:

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

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

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

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

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

• Capital management to ensure our capital structure aligns with our risk philosophy. • Financial reporting to adhere to business and industry standards. • Governance practices to adhere to the intent and stipulation of our corporate bylaws, which are approved by the

membership of Biggar and District Credit Union. • Risk management to ensure all risks are measured and managed in an acceptable fashion.

Co-operative Principles As a true co-operative financial institution, Biggar and District Credit Union acts in accordance with internationally recognized principles of co-operation: Voluntary and Open Membership Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. Democratic Member Control Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner. Member Economic Participation Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

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Autonomy and Independence Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy. Education, Training and Information Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation. Co-operation among Co-operatives Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures. Concern for Community Co-operatives work for the sustainable development of their communities through policies approved by their members.

Introduction Biggar and District Credit Union is an independent Saskatchewan credit union owned by our members. Under the current credit union legislation, Biggar and District Credit Union is able to provide financial services to members and non-members. As at December 31st, 2018 Biggar and District Credit Union had 3,627 members and 313 non-members. Non-members do not participate in the democratic processes of the credit union nor the patronage program. In comparison to last year, you will see that they are up by 111 members. Our credit union serves the communities of Biggar and Perdue, and surrounding area through two branches. In these communities we provide a full range of financial services including: financial, investment, commercial, agricultural, personal, loans, mortgages, insurance, etc. Our Insurance Agency subsidiary is owned with Landis Credit Union. Biggar and District Credit Union owns 70% and Landis Credit Union owns 30%. Biggar and Landis Insurance Services provides insurance services through locations in Landis and Biggar.

Strategy The vision of Biggar and District Credit Union is to be the leading provider of a full range of financial services in the Biggar, Perdue and surrounding areas of Saskatchewan. To monitor specific objectives throughout the year that support this vision, we have developed a performance management framework that establishes, measures and monitors our progress toward achieving our goals. Our key strategic objectives in 2018 focused in the following Strategic Results areas: People Ensure human resource practices focus on recruitment, retention and training to provide for

succession and new skills development Invest in our leadership to enable the credit union to compete through the exercise of sound

governance Actively support diversity to represent our communities and hire the right person for the right job We respect the personal and professional goals that our people set

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Our team has a sense of benchmarks and goals and is recognized for their achievements We provide opportunities for our employees to develop to their full potential We encourage high performance levels through training, coaching and empowerment We support a co-operative culture where employees express confidence, faith, trust and

commitment in their team members Growth As a financial solutions provider with an economic and social purpose we invest in our

communities to demonstrate social responsibility Enhance our personal relationships with our members and customers through market intelligence Attract new members and customers through market intelligence, professionalism and a

competitive range of products and services Strengthen loyalty of existing members and become their financial institution of choice Reach out to diverse groups to attract members, customers, future employees and leaders Increase our understanding of community demographics to provide market-focused products and

services to existing and potential members and customers Financial Assure financial strength through sound business practice Take a proactive role in community development and become involved in efforts to grow and

diversify our communities’ economies Service Delivery Invest in technology as an early adopter to enable the system to compete for market share,

enhance service through interconnectivity, realize the benefits of economies of scale, and grow our communities beyond geographic boundaries

We will strive to meet and/or exceed all regulatory requirements (including federal legislation, provincial legislation, CUDGC, etc.)

Meeting the goal of our vision requires that Biggar and District Credit Union not only attract new members, but preserve existing memberships as well. We are pleased to show an increase of 111 memberships through the year. To support our objective of increased customer loyalty, and remaining relevant for our members, we continue training for all of our employees. Special emphasis was placed on product knowledge and “Value Add” cultural training. Our goal is to enhance service to our existing members, as well as those who are new to our community.

Key Performance Drivers Each year we set corporate level targets and Key Performance Indicators. These are set to advance our goals and drive our desired results throughout the organization, and in the spirit of growth & continuing improvement. These indicators of performance are regularly measured and monitored. The following are our corporate goals, targets and results:

Results Targets Actual

Asset Growth 3.08% 13.30% Deposit Growth 2.49% 13.75% Off-Balance Sheet Growth 5.00% -0.32% Loan Growth 4.69% 2.78% Loan / Asset Ratio 78.23% 71.61% Loan Delinquency (>90 days) less than 2% 0.62% Leverage Ratio 9.82% 9.89% Risk Weighted Capital 14.56% 14.53%

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Non-interest Revenue $2.710 million $2.917 million Profit (after tax) $ 947,332 $865,909 Overall, we have a financially strong organization. When we compare to our peers and the province, we find ourselves in the upper level of capital strength. In 2018, we experienced a larger than average growth. This growth came in the second half of the year. It shows mainly in the Ag sector and a result of the CIBC branch closure. Our regulatory body continues to raise the bar on expected capital, and liquidity levels. Our board of directors does have a Capital and Liquidity Plan in place. They are regularly monitoring the trigger points, and should our capital or liquidity be jeopardized, we will take steps to preserve our position of strength. Enterprise Risk Management Annually, our credit union spends significant resources measuring and assessing risks to ensure we are adequately prepared to serve our communities now and in the future. This process is enterprise risk management or ERM for short, and is a requirement of credit unions in Saskatchewan as laid out by Credit Union Deposit Guarantee Corporation. Management completes an annual process of identifying risks which is then reported to the Audit and Risk Committee. Through this process, the following risks have been identified according to their potential impact on Biggar and District Credit Union.

Strategic Risk Strategic risk is the risk that adverse decisions, ineffective or inappropriate business plans or failure to respond to changes in the competitive environment, customer preferences, product obsolescence or resource allocation will impact our ability to meet our objectives. This risk is a function of the compatibility of an organization’s strategic goals, the business strategies developed to achieve these goals, the resources deployed against these goals and the quality of implementation. Market Risk Market risk is the exposure to potential loss from changes in market prices or rates. Losses can occur when values of assets and liabilities or revenues are adversely affected by changes in market conditions, such as interest rate or foreign exchange movement. Liquidity Risk Liquidity risk is the potential inability to meet obligations, such as liability maturities, deposit withdrawals, or funding loans without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources.

Credit Risk Credit risk is the risk of loss arising from a borrower or counterparty’s inability to meet its obligations. Biggar and District Credit Union has a low delinquency level. We also maintain a rigorous quarterly review process of our portfolio to assess this risk. Legal and Regulatory Risk Legal and regulatory risk is the risk arising from potential violation of, or nonconformance with, laws, rules, regulations, prescribed practices, or ethical standards. Operational Risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or external events. Exposures to this risk arise from deficiencies in internal controls, technology failures, human error, employee integrity or natural disasters.

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Risks Summarized So, what are some risk challenges for Biggar and District Credit Union? Our Board of Directors reviews our strategic plan annually, in detail. It is a review of our community and organizational trends. Who is our future member, what products and services do they need, and how do we remain relevant in this fast paced changing environment. Our self-assessment of this would reveal that in the short term, 1-3 years, we are fine. The challenge comes beyond that. However, over the past year, we have made some great improvements in our strategy to deal with the longer term. Firstly, we have joined forces with Unity Credit Union and are working together on our technology road map. This has been beneficial in gaining efficiencies and capacity, in implementing programs and applications that fit with our strategy to improve our electronic relationships with our members allowing us to communicate with, and provide service to our members in the way they prefer to do business. A second strategy change has been to join forces with our neighboring credit union. As you are aware, in 2018 our membership voted in favor of amalgamation with Landis Credit Union. We are very excited for the new organization that has formed for 2019. This is a definite win win for both organizations. This leaves us with an increased trading area, increased services, increased limits, increased efficiencies, and increased financial strength overall. We are a profitable organization, with mitigation processes in place to allow us to be competitive in the marketplace without exposing us to any undue market risk. In several instances, we are the competition. To maintain this advantage, we cannot do it on our own. As a smaller Credit Union, we rely on other system players to work together to create and develop products, services and technologies, to meet your needs. We work with Concentra and Innovation credit union to assist us with our balance sheet simulation. We also work with other regional Credit Unions for ways to improve our back office efficiencies and information sharing. Our Liquidity level is well in line with the required standards for our organization. We are at 290.9%. We are within our Min. of 100% and Max of 300%. We are about 72% lent out and standards are 80%. Credit risk is our biggest potential loss area. We do have a very low delinquency as well as internal audit processes that are monitoring our underwriting practices. From an industry perspective, and under IFRS 9, we are required to establish a loan allowance of $552,919. For this allowance, and after prior year adjustments, the impact to our bottom line is a negative $143,441 for 2018. Even after this impact, we still have strong equity position as well as a good bottom line. It should be noted that this is a general allowance and does not mean we will have a loss of that amount. It is simply set aside for future date losses, should they occur. We are continually challenged in the legal and regulatory sector. With the continually increasing government regime, plus our regulator increasing operating standards, the impact to us is increased oversite, monitoring & reporting and thus, increasing our expenses. We continue to monitor these costs and look for efficiencies to enable affordability into the future. Some examples of the regulatory regimes that we must follow are; Money Laundering Legislation, Privacy Legislation, Cost of Credit Legislation, Incidental Insurance, Do Not Call List, Anti-spam Legislation, Foreign Account Tax Compliance Act, Records Management Framework, Multi Material Recycling Program, Complaint Handling and Market Practice Code. The increase to our administration duties as a result of this legislation is huge. Therefore, staffing costs to stay compliant

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will also increase into the future.

Corporate Structure and Governance The governance of Biggar and District Credit Union is anchored in the co-operative principle of democratic member control. Overall, our corporate structure is designed to hold accountable the areas of Member Service Delivery (Cash Services, Investments, Lending and Insurance Agency), Technology, Human Resources, Corporate Finance, Corporate Governance, Legislation Compliance. Board of Directors

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

The board of directors acknowledges its responsibilities as including: o Exercising the powers of the credit union directly, or indirectly through employees o Establishing and maintaining prudent policies for the operation of the credit union o Directing the management of the business affairs of the credit union o Acting honestly and in good faith with a view to the best interests of the credit union at the

exclusion of other interests o Exercising the care, diligence and skill of a prudent person in directing the credit union's

affairs. The board of directors is accountable to the members of the credit union for directing the affairs of the credit union and maintaining policies, which are responsive to their needs, and the needs of the credit union, for sound operations. Directors Board Composition The board is composed of 10 individuals elected by the membership. Terms are for three years and tenure is limited to two consecutive terms. Nominations are made by the membership. Voting is by paper ballot, in branch, and election results are announced at Biggar and District Credit Union’s annual general meeting. Committees The responsibilities of the board of a modern financial services organization involve an ever-growing list of duties. Biggar and District Credit Union maintains a number of committees comprised of directors. This partitioning of responsibilities enables a clear focus on specific areas of activity vital to the effective operation of our credit union.

• Audit and Risk Committee The Audit and Risk Committee oversees the enterprise risk management processes, financial reporting process, reviews financial statements, liaises with internal and external auditors and regulators, and reviews internal control procedures. The committee consists of at least three directors. The board determines the skills and abilities needed on the committee and chooses its members accordingly.

• Governance, Policy & Board Development Committee

The Governance, Policy & Board Development Committee establishes and maintains current and relevant policies, effective governance guidelines, ensures the education, performance and succession of senior leadership, and ensures compliance with governance policies and Biggar and District Credit Union bylaws. It consists of three directors. The board outlines their terms of reference, guidelines and requirements.

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• Building and Properties Committee The Building and Properties Committee oversees the review of major management plans for credit union service facilities. To develop and recommend to the board, policy relevant to service facilities. To consider special building and renovations projects and review related plans & budgets. To annually develop a budget for its activities during the upcoming year. Identification, understanding and management of risks that may affect Biggar and District Credit Union. It consists of at least three directors. The board determines the committee’s terms of reference, guidelines and requirements.

• Asset/Liability (ALCO) Committee The ALCO Committee ensures appropriate asset/liability management planning and risk monitoring. To ensure that asset/liability management complies with all regulatory requirements and sound business and financial practices. To establish and maintain a balance sheet structure that will protect and enhance the credit union's financial margin and the value of the credit union's capital during all phases of interest rate cycle and varying economic and market conditions. To specify, in general terms, prudent guidelines for the management of asset cash flows in relation to liability cash flows. Reviews the existing pricing strategies of Biggar and District Credit Union for the purpose of ensuring competitive and profitable products and services.

• Nominating Committee The Nominating Committee oversees the nomination and election processes for elections of credit union directors. The committee is chosen through the oversight of the Governance, Policy and Board Development Committee.

• Conduct Review Committee The Conduct Review Committee ensures that Biggar and District Credit Union acts with the full integrity and objectivity of its directors and employees, by having in place policies, processes and practices that protect people and the organization from claims and from the perception of unfair benefit or conflict of interest. The committee is chosen through a nomination process from the directors. The committee is comprised of 3 committee members and 2 alternative members.

Compensation and Attendance The director compensation and attendance is reported in the annual report. Director Training All directors are enrolled in the Credit Union Director Achievement (CUDA) program and registered with the CUSOURCE online program. Several directors are graduates of the program. The Governance, Policy and Director Development committee oversees the directors’ development. All directors are informed of the course offerings and given opportunities to attend. Outside training resources are also brought in when required, for director training. Evaluation The Board of Directors does a self-evaluation annually. This evaluation has 2 areas of focus. One is assessing their governance and their effectiveness as a whole board. The second focuses on their personal strengths and weaknesses and how to improve.

Executive Management The executive management consists of Bill Hammel, CEO/General Manager, Dean McCallum, VP of Service Delivery and Owen Nicklin, VP of Support Services. Owen has since retired and we now welcome Bryce Kramer to our team. Our executive team promotes professionalism, empowerment, and working as a team. Our executive team has a combined experience of 85 plus years in the financial services industry.

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Corporate Social Responsibility (CSR) Social responsibility and the well-being of our community is a high priority for Biggar and District Credit Union. Within our vision, mission and values we specifically mention our community development and community impact. We have a “Green Committee”, comprised of directors and staff volunteers, that specifically focuses on our impact to the community and our environment. Various campaigns/contests are held throughout the year to encourage contributing to a healthy environment, while at the same time, leading the community by our example (at home and at work), and enhancing our image as a socially responsible organization.

Capital Management Biggar and District Credit Union recognizes a need to sustain the credit union’s capital position in order to continue to meet regulatory and sound operational requirements. Adequate capital enables the credit union to sustain its liquidity requirements, to safely fund development initiatives, and provide leverage to effectively manage performance standards. In general, the purpose of the capital plan is to identify optimal capital ranges for Biggar Credit Union and the actions that Board and Management will employ to work towards those optimal ranges.

• Too little capital restricts the credit union’s ability to grow and generate good returns. It also increases the risk of having insufficient funds to cushion against unexpected losses or liquidity needs.

• To have too much capital could be perceived that the credit union is not generating sufficient return on its capital.

Biggar and District Credit Union’s capital plan is directly related to its service delivery strategies and risk philosophy. The credit union has traditionally held a moderate appetite for risk. It has focused on traditional financial services, managed a low level of risk in its loan and investment portfolio, along with the operation of an insurance agency with offices located in Biggar and Landis. Liquidity has been maintained within a very comfortable range. This has proven to be a very valuable strategy through past downturns in the economy. Biggar and District Credit Union is able to adjust, maintain profitability and continue to grow.

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CREDIT UNION QUICK FACTS

Quick Facts

(as of December 31, 2018, unless otherwise indicated)

• Today there are 40 credit unions in Saskatchewan serving 218 communities through 247 service outlets.

• Credit unions offer financial products and services to more than 481,000 members.

• Saskatchewan credit union assets reached close to $23.8 billion with revenue of over $1.07 billion.

• Credit union lending amounts were close to $19.2 billion.

• Over 380 board members are locally elected by members of each credit union to provide strategic direction to their management teams.

• As independent financial institutions owned and controlled by their members, credit unions are shaped by community needs. Saskatchewan credit unions range in asset size from $19 million to more than $6 billion.

• In 2018, Saskatchewan credit unions returned over $10.3 million to their members in the form of patronage equity contribution and dividends.

• Credit unions are a major contributor to Saskatchewan's economy, employing over 3,300 people.

• In 2017, Saskatchewan credit unions contributed more than $8.95 million to growing communities. Our fundraising efforts brought in more than $182,000 for causes like the Jim Pattison Children's Hospital Foundation of Saskatchewan, Red Cross Disaster Relief and Telemiracle. Our employees logged more than 86,000 hours of volunteer time for community organizations during paid work hours and non-paid time. In-kind donations were nearly $574,000. We awarded 311 scholarships/bursaries worth $231,950. (2018 numbers are not yet available.)

• Funds held on deposit in Saskatchewan credit unions are fully guaranteed through the Credit Union Deposit Guarantee Corporation. The full guarantee is made possible through a comprehensive deposit protection regime that is focused on prevention.

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CREDIT UNION DEPOSIT GUARANTEE CORPORATION ANNUAL REPORT MESSAGE 2018

January 2019

Deposits Fully Guaranteed Credit Union Deposit Guarantee Corporation (the Corporation) is the deposit guarantor for Saskatchewan credit unions, and the primary regulator for credit unions and Credit Union Central of Saskatchewan (SaskCentral) (together, Provincially Regulated Financial Institutions or “PRFIs”).

The Corporation is charged through provincial legislation, The Credit Union Act, 1998, with the main purpose of guaranteeing the full repayment of deposits held in Saskatchewan credit unions. The Corporation was the first deposit guarantor in Canada and has successfully guaranteed deposits since it was established in 1953. By guaranteeing deposits and promoting responsible governance, the Corporation contributes to confidence in Saskatchewan credit unions.

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

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