2018 ANNUAL REPORT
1 TABLE OF CONTENTS
CEO and Board of Directors Update 8 Community Investment Report 13 Executive and Leadership Teams 14 Board of Directors 15 Governance Reports 16 Board of Directors Disclosures 18 CEO Disclosure 20 5 Years at a Glance 21 2018 Business Highlights 22 Financial Statements 25
2 TABLE OF CONTENTS
3 VALUES MISSION
4 With our roots planted firmly in our communities, we pledge to continue to build a strong and healthy credit union that is rich with history, and dedicated to serving all of our loyal members.
Vision Building lifelong relationships founded on trust and confidence, one member at a time. Mission Dedicated to providing personal, professional, financial services to our members and our communities. Values Accountability: Committed, trusted, reliable, fair
Community: People focused, member owned, socially responsive, responsible
Understanding: Cooperating, caring, personable, delivering common sense simple solutions
Fun: Every day, everybody!
5 Who we are Aldergrove Credit Union is a financial service cooperative located in the heart of the Fraser Valley. We believe you deserve access to financial products that offer it all—great service, fair pricing and flexible terms.
When you choose to become an Aldergrove Credit Union member, you also choose to make a positive impact on your community, to have a voice and to make a difference.
We offer personal and commercial banking, financial planning and insurance solutions to our members and clients in the communities of Langley, Aldergrove, Abbotsford and Mission.
6 7 CEO & BOARD OF DIRECTORS UPDATE
Introducing our Strategic Direction At Aldergrove Credit Union, our members and our communities are at the centre of everything we do. To ensure we never waiver from this commitment, we introduced Strategic Direction — a tactical plan developed to measure success and drive decision making in 2018 and beyond.
The plan, introduced in 2016, has revolutionized the way we assess, prioritize and achieve the high-impact initiatives that we focus on each year. As a part of this report, we’re pleased to share updates on the initiatives we are working on to accomplish our four Strategic Objectives and key areas of focus:
• Financial Sustainment & Independence We will achieve financial results required to remain independent through line of business improvements and collaboration.
• Member Experience & Delivery We strive to create the best experience for every member, by optimizing our distribution network and transforming branches to better serve our members.
• Building People & Culture Our people are responsive to members, committed to teamwork, knowledgeable and accountable to deliver financial solutions to our members.
• Community Awareness & Presence We will make a positive impact in our communities through brand and community awareness and creating an enhanced branching strategy.
Financial Sustainment & Independence GROWTH AND THE ECONOMY The financial services industry is a critical part of the national and global economic system and Aldergrove Credit Union’s continued success relies heavily upon our ability to remain strong during healthy economic conditions, or when it’s faced with challenges.
In 2018, we experienced one of the strongest years of income growth in history – this growth was largely influenced by the three Bank of Canada interest rate increases. As anticipated in 2017, the residential mortgage market cooled as a result of federal government changes to mortgage underwriting policy. To strengthen and solidify our liquidity position, we put a strong focus on deposit growth, which resulted in a 10.2% increase ($68M growth). To effectively manage our liquidity position, loan growth lowered and reported a 3.4% increase ($23M growth) over last year. Assets grew by 7.1% ($53M growth).
8 FINANCIAL PLANNING DIVISION SOARS IN SERVICE AND GROWTH More Aldergrove Credit Union members are choosing to work with our Financial Planners within Aldergrove Credit Union’s Financial Planning Division. As a result, the division experienced a 9% growth increase ($10M), despite market volatility in the fourth quarter.
Members receive great service from our team of Financial Planners. In 2018, Steven Brar, Jennifer Flentge and Karen Fox were awarded QTrade Financial Group’s Top Advisors of 2017 for their outstanding achievements in many areas of the business, including: delivering a great member experience ensuring relevant financial planning advice, leadership and collaboration, sound business practices, responsive to regulations and more.
CO-OPERATORS PARTNERSHIP CONTINUES TO PREVAIL It’s been nearly 18 months since we announced our strategic alliance with the Co-operators, and we’re pleased to report our continued growth in Insurance. The partnership’s success proves that it was the right decision for our members, and to sustain the business into the future. Being a part of a large national organization, who shares our common cooperative principles and values, has given our members access to products and services that we wouldn’t have been able to provide previously, such as a 24/7 call centre and more.
MATSQUI CLOSURE Upon opening the new Mission Community Branch, our Matsqui Community Branch will close, leaving a footprint in our history and a legacy that will continue to be written as a part of our future. We are committed to providing the same great service members have come to expect at all our locations. Members will not be impacted during the transition – account numbers, debit cards, and any preauthorized debits and credits will remain the same. We welcome all feedback and the opportunity to address any questions you may have.
Member Experience & Delivery NEW MISSION BRANCH, NEW SERVICE DELIVERY MODEL Since the announcement last Spring, new building construction has been underway at 7871 Stave Lake Street in Mission. Our teams have been working together to ensure the new Mission Community Branch is more than just a great place to do your banking.
The new branch is scheduled to open in the Summer of 2019 and when it does, we will also introduce a new service delivery model. The new model will provide members with access to a team of Financial Service Advisors who provide high-level advice across multiple areas of the business including investments and lending, as well as day-to-day banking services.
The new team was assembled in 2018 and is currently serving members in Matsqui until the new Mission Community Branch opens.
Bringing people together is a part of who we are, and the new branch is designed to inspire innovation and collaboration inside our doors. The space features design elements from our agricultural heritage and includes a centralized community meeting space. 9 EXPANSION OF OUR DIGITAL BANKING SOLUTIONS OFFERING Imagine an online banking experience that gives you access to the same great products and services you can expect from walking through our doors at our bricks and mortar branches. Imagine the ability to open an account online or apply for a loan from the comfort of your own home – that’s the future of banking with Aldergrove Credit Union.
Designed for members who are looking for an enhanced digital banking experience, we will be working to introduce new technologies that will offer modern ways to bank in early 2020. Stay tuned for more exciting updates on this initiative in 2019. memberSHARE LOYALTY PROGRAM ENHANCEMENTS As a result of the enhancements we introduced to the memberSHARE Loyalty Program in 2018, the number of members who received a loyalty program payout increased by 27%, and the total amount we shared with members increased by 36% to $1.56M. We’re pleased to report that we achieved our goal to reward more members with more cash, bonuses, dividends and rebates. memberSHARE is unlike any other loyalty program offered by a credit union across Canada, and we’re proud that the program continues to put profits back where they belong – in our members’ pockets and back into the community.
Community Awareness & Presence ACUCC GRAND OPENING We celebrated the opening of the Aldergrove Credit Union Community Centre (ACUCC) in the summer of 2018 — a well- deserved win for Aldergrove residents and surrounding communities.
The new facility garnered a lot of positive attention in Langley and neighbouring communities in 2018, bringing thousands of people together to enjoy the ice rink, pools, waterpark and fitness facilities. ACUCC was honoured with an award from the BC Economic Development Association, recognizing the public project for making the most significant economic impact in a community.
PARTNERED WITH CREDIT UNIONS OF LANGLEY TO BRING THE INAUGURAL RIBFEST LANGLEY In partnership with Envision Financial, G&F Financial Group and Prospera Credit Union, the “Credit Unions of Langley” title sponsored the first ever Ribfest Langley. Hosted by the four Rotary Clubs of Langley, RibFest Langley was one of the best fun-filled family friendly summer events in the Fraser Valley! Families from all over the Lower Mainland brought their lawn chairs to enjoy a weekend full of live music and entertainment, local craft beer and award-winning ribs, made fresh by world famous ribbers from across the country.
Building People & Culture ACU YOUNG LEADERS THRIVE INSIDE OUR DOORS Our ACU Young Leaders continue to make a powerful and positive impact on our teams, strategic partnerships and the community. In 2018, the group hosted a series of networking events with members of the BC Young Leaders group, and launched a Mentorship Program, which matches mentees and mentors within the organization to build core leadership competencies and support personal and professional growth.
10 INTRODUCED THE 2018 ACU SPIRIT AWARDS As a part of celebrations at our annual staff appreciation event, we recognized a group of shining stars who were nominated by their peers to receive a 2018 ACU Spirit Award, along with a new Leadership Award. Shining stars are mentors and colleagues who continually go above and beyond – and do so with a thoughtful and thorough approach to their work. Congratulations to our 2018 Award Recipients!
LOOKING AHEAD TO 2019 Reimagine the possibilities while staying true to our values and roots in the community – that’s the theme as we head into 2019. The year will bring new and exciting initiatives in all areas of the business, with focus on enhancing our member experience both in branch and online.
Thank you for your loyalty – the future of Aldergrove Credit Union is a bright one and we look forward to helping you make informed decisions that will make a positive impact on your financial well-being.
Gus K. Hartl Eric Popma Chief Executive Officer Board Chair Aldergrove Credit Union Aldergrove Credit Union
11 12 COMMUNITY AWARENESS & PRESENCE
Giving back to our members and the community is at the centre of everything we do. Over the past 10 years, Aldergrove Credit Union has given back nearly $14 million in loyalty program payouts, education bursaries, donations, sponsorships, and funds raised.
500 STAFF VOLUNTEER HOURS
$223,000 BACK TO THE COMMUNITY
Our communities in the Fraser Valley are thriving, and as they continue to grow in population, so does the need for funding high impact projects, programs and facilities.
In 2018, over 254 charitable organizations, students, community groups, health and long-term care facilities, sports associations and individuals benefited from over $223,000 in donations, sponsorships, staff initiated fundraising, educational and in-kind support throughout the year.
Our staff play an important role in supporting their communities too. In 2018, Aldergrove Credit Union staff donated 500 volunteer hours, and raised $25,000 for BC Children’s Hospital and $12,500 for the United Way of the Lower Mainland.
Thank you to our staff and members for working together to help build strong and healthy communities.
13 EXECUTIVE & LEADERSHIP TEAMS
EXECUTIVE TEAM
Gus K. Hartl Bob Eilers Val Mackey Thom Meyer Tracy Yolland CEO Vice President, Vice President, Vice President, Vice President, Credit Risk & Business Human Resources & Finance & Sales & Service Solutions Marketing Risk Management
LEADERSHIP TEAM
Michelle Burrows Barb Colnar Stewart Greaves Carol Herschmiller Barbara McKeown Branch Manager Branch Manager Branch Manager Branch Manager Branch Manager
Teresa Wiber Lara Clayton Mary Lynn Baker Emily Ingram Anita Jensen Branch Manager Manager, Commercial Business Solutions Manager Marketing & Corporate Affairs & Credit Communications Manager Governance Manager
14 BOARD OF DIRECTORS
Eric Popma Bev Dornan Sylvia Allenby Chair Vice Chair Director
Lindsay Babineau Trudi Campen Ken Forcier Director Director Director
Terry Metcalfe Robert Van Belle Doug Sweeting Director Director Director
15 GOVERNANCE REPORTS
16 BOARD COMMITTEES
AUDIT COMMITTEE Meets directly with the internal and external auditors, both with and without management. The committee has oversight of audit-related functions, financial reporting, internal controls, enterprise risk management, information technology needs and objectives and carries out other duties as may be prescribed by statute or delegated by the board.
CONDUCT REVIEW COMMITTEE Responsible for monitoring compliance with credit union policies with respect to conflict of interest, related parties and confidentiality and such other duties as may be prescribed by statute or delegated by the board.
PLANNING & GOVERNANCE COMMITTEE Assists the Board of Directors in setting the strategic direction, define key objectives for the credit union and ensure that the board provides for effective governance that evolves with the needs of the credit union. The committee also oversees the board evaluation process, in addition to periodic review of Aldergrove Credit Union’s rules and ensures that regulatory requirements are being fulfilled.
INVESTMENT & LOAN COMMITTEE Has oversite responsibility for lending and investment activities in accordance with Aldergrove Credit Union’s policies, which include annually reviewing and recommending changes to the Investment and Lending Policy. The committee also ensures appropriate procedures are followed, reviews asset quality, approve loans that exceed management limits and carries out such other duties as may be prescribed by statute or delegated by the board.
NOMINATIONS COMMITTEE Ensures the election process is conducted and carried out as required by the rules of the credit union and within regulatory and legislative requirements. The committee actively seeks out eligible candidates, having regard for the competencies and skills required, who will positively contribute to the credit union and Board of Directors.
COMPENSATION & HUMAN RESOURCES COMMITTEE Ensures the credit union has appropriate human resources policies and procedures in place that provides a positive and fair work environment for its employees. The committee also assesses the performance of the Chief Executive Officer and determines his or her compensation.
17 BOARD OF DIRECTORS DISCLOSURES
EDUCATION / TRAINING Aldergrove Credit Union recognizes the importance of education and training for directors to ensure effective oversight of the credit union and ensure its directors understand the financial industry and the issues that credit unions face.
Given this responsibility, all new directors are required to complete Level A of the Credit Union Directors Achievement (CUDA®) Program within one year of becoming a director. In addition to this, Aldergrove Credit Union provides other opportunities for education and training, including access to industry information, publications, educational seminars and other events and conferences within the credit union system.
REMUNERATION / MEETING ATTENDANCE Changes in governance practices have placed a greater onus on directors and considerably increased their time commitment to credit union business. In addition to the added commitment, it is equally important to have director remuneration set at a reasonable level in order to attract and retain competent directors.
Directors receive a monetary sum annually for each year they serve on the board to recognize the time commitment asked of each director to prepare for and attend board and committee meetings, as well as community functions as a representative of Aldergrove Credit Union.
COMPENSATION By way of ordinary resolution at the Annual General Meeting held on May 3, 2017, the members of Aldergrove Credit Union approved $100,000 as an aggregate amount available for the compensation of directors. The total remuneration paid to the directors in 2018 was $95,330, which is an accumulation of their annual retainer, as outlined in the table below, and per meeting fees paid for their attendance.
DIRECTORS REMUNERATION
Annual Board Chair Annual Vice Board Annual Director $15,000 Retainer $12,500 Chair Retainer $10,000 Retainer
BOARD ATTENDANCE
DIRECTOR / CURRENT COMMITTEES/ ATTENDANCE TOTAL 1 BOARD SERVICE MEETINGS JAN-APR MAY-DEC REMUNERATION Board 3 or 4 7 of 7
ERIC POPMA2 Audit 1 of 1 1 of 2 (BOARD CHAIR) Compensation & Human Resources 1 of 1 0 of 0 JOINED IN 1990 $14,330 CURRENT TERM Conduct Review — 1 of 1 EXPIRES 2020 Investment & Loan — 1 of 1 Nominations 1 of 1 1 of 1 Planning & Governance 1 of 1 1 of 1 System / Other 3 5 Board 3 of 4 7 of 7 BEV DORNAN Audit 1 of 1 2 of 2 (VICE CHAIR) JOINED IN 2015 Conduct Review 1 of 1 — CURRENT TERM Investment & Loan (Chair) 1 of 1 1 of 1 $11,175 EXPIRES 2021 Planning & Governance (Chair) 1 of 1 1 of 1 System / Other 2 3
18 DIRECTOR / CURRENT COMMITTEES/ ATTENDANCE TOTAL 1 BOARD SERVICE MEETINGS JAN-APR MAY-DEC REMUNERATION Board 3 of 4 5 of 7 Audit 1 of 1 1 of 2 TERRY METCALFE JOINED IN 1994 Compensation & Human Resources 1 of 1 0 of 0 $9,225 CURRENT TERM Conduct Review — 1 of 1 EXPIRES 2019 Nominations 1 of 1 — System / Other — 4 Board 3 of 4 7 of 7 Audit 1 of 1 2 of 2 KEN FORCIER Compensation & Human Resources 1 of 1 — JOINED IN 2005 Conduct Review — 1 of 1 $9,725 CURRENT TERM EXPIRES 2018 Nominations — 1 of 1 Planning & Governance 1 of 1 — System / Other 1 4 Board 4 of 4 — TIM WILLIAMS Audit 1 of 1 — JOINED IN 2012 Conduct Review 1 of 1 — $2,575 RETIRED FROM BOARD IN 2018 Investment & Loan 1 of 1 — System / Other — 1 Board 4 of 4 7 of 7 TRUDI CAMPEN Compensation & Human Resources 1 of 1 0 of 0 JOINED IN 2013 Conduct Review — 1 of 1 $9,725 CURRENT TERM EXPIRES 2019 Nominations 1 of 1 — Planning & Governance 1 of 1 1 of 1 System / Other 1 4 Board 4 of 4 6 of 7 Compensation & Human Resources 1 of 1 — SYLVIA ALLENBY JOINED IN 2014 Conduct Review 1 of 1 1 of 1 $9,575 CURRENT TERM Investment & Loan — 1 of 1 EXPIRES 2020 Nominations 1 of 1 1 of 1 System / Other 1 4 Board 4 of 4 7 of 7 Conduct Review 1 of 1 — LINDSAY BABINEAU JOINED IN 2017 Investment & Loan 1 of 1 1 of 1 $11,825 CURRENT TERM Nominations — 1 of 1 EXPIRES 2018 Planning & Governance 1 of 1 1 of 1 System / Other 2 5 Board 4 of 4 5 of 7
ROB VAN BELLE Audit 1 of 1 2 of 2 JOINED IN 2017 Compensation & Human Resources — 0 of 0 CURRENT TERM $9,225 EXPIRES 2020 Conduct Review 1 of 1 — Investment & Loan 1 of 1 1 of 1 System / Other — 3 Board — 7 of 7 DOUG SWEETING Audit — 2 of 2 JOINED IN 2018 Conduct Review — 0 of 1 $7,950 CURRENT TERM EXPIRES 2019 Planning & Governance — 1 of 1 System / Other 1 4
1 Per our credit union rules, all directors are elected for a three year term and may serve up to five consecutive terms effective April 30, 2012 per credit union rule 4.21 2 May attend all committee meetings as an ex officio member 19 UPDATED >
CEO DISCLOSURE
COMPENSATION OVERVIEW – BASE SALARY Aldergrove Credit Union compensation philosophy for all employees, including the CEO and Executives, is to provide a total compensation package (in the form of cash and non-cash benefits) that attracts, retains and motivates highly competent staff. Aldergrove targets base salaries at the 50th percentile (median) job rate which is established through third party compensation surveys of comparable organizations.
On an annual basis, a committee of the Board of Directors reviews the CEO’s compensation package. Based on the CEO and organizational performance; marketplace information; and data provided by third party consultants the committee approves compensation package adjustments for the CEO. For the 2018 fiscal year, the CEO’s base salary was $275,100.
STRATEGIC REWARDS PROGRAM (SHORT TERM INCENTIVE) The Strategic Rewards Program sets out pre-defined goals and weightings, based on the strategic business priorities of the credit union and is approved annually by the Board of Directors. A minimum level of profit must be achieved and incentive pay-outs are not guaranteed.
All credit union employees participate in the same Strategic Rewards Program (STI). The target payout for the CEO is 15% of base salary to a maximum of 25% for the achievement of stretched goals. For 2018 results, the CEO received $49,472 representing 18% of base salary.
BENEFITS, PENSION AND PERQUISITES The CEO participates in the same benefit plan as all employees in the organization. Coverage includes medical, extended health care, dental care, life insurance, accidental death and dismemberment, short-term disability, long-term disability and an employee assistant program.
The CEO participates in a Money Purchase Pension Plan, which is the same structure for grandfathered employees.
The CEO receives additional perquisites and expense reimbursement which include a vehicle allowance of $9,000 and recreational allowance of $2,000.
Total Benefit, Pension and Perquisites represent approximately 18% of the CEO’s base salary.
Year Salary Short-Term Incentive Total Cash Compensation CEO 2018 $275,100 $49,472 $324,572
**Based on fiscal year end of December 31, 2018
20 UPDATED >
5 YEARS AT A GLANCE
ASSET GROWTH $807,414,414 $754,168,196
$696,586,735 $574,915,101 $619,140,698
2014 2015 2016 2017 2018
RETAINED EARNINGS $47,622,860 $43,055,080
$37,770,532 $35,296,038 $36,421,140
2014 2015 2016 2017 2018
MEMBERSHARE LOYALTY PROGRAM PAYOUTS*
2014 2015 2016 2017 2018
Product Bundles – – $146,000 $150,500 $431,800 Rebate on $359,500 $268,500 $283,000 $303,500 $348,878 Loan Interest Bonus on $123,500 $149,500 $104,000 $172,000 $151,716 Deposit Interest Dividend on $530,000 $492,500 $451,000 $550,500 $634,906 Equity Shares
*Figures represent approximate gross payout amounts.
21 2018 BUSINESS HIGHLIGHTS
22 $1,567,300 MEMBERSHARE LOYALTY PROGRAM PAYOUT 1,029 17,625 NEW MEMBERS TOTAL MEMBERS
$807M $738M $703M TOTAL ASSETS TOTAL DEPOSITS TOTAL LOANS
GREW BY $53M GREW BY $68M GREW BY $23M 7.1% INCREASE 10.2% INCREASE 3.4% INCREASE
FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ALDERGROVE CREDIT UNION The summary consolidated financial statements of Aldergrove Credit Union, which comprise: • The summary consolidated statement of financial position as at December 31, 2018 • The summary consolidated statement of income and comprehensive income for the year then ended • The summary consolidated statement of changes in members’ equity for the year then ended • The summary consolidated statement of cash flows for the year then ended and related note
are derived from the audited consolidated financial statements of Aldergrove Credit Union for the year ended December 31, 2018. In our opinion, the accompanying summary consolidated financial statements are consistent in all material respects, with the audited consolidated financial statements, in accordance with the criteria disclosed in Note 1 in the summary consolidated financial statements. SUMMARY CONSOLIDATED FINANCIAL STATEMENTS The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary consolidated financial statements and the auditor’s report thereon, therefore is not a substitute for reading the audited consolidated financial statements of Aldergrove Credit Union. The summary consolidated financial statements and the audited consolidated financial statements do not reflect the effects of events that occurred subsequent to the date out our report on the audited consolidated financial statements.
THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND OUR REPORT THEREON On our report dated February 28, 2019: We expressed an unmodified audit opinion on those audited consolidated financial statements. MANAGEMENT’S RESPONSIBILITY FOR THE SUMMARY CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the preparation of the summary consolidated financial statements in accordance with the criteria disclosed in note 1 in the summary consolidated financial statements.
AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on whether the summary consolidated financial statements are consistent, in all material respects, with the audited consolidated financial statements based on our procedures, which were conducted in accordance with Canadian Auditing Standards 810, Engagements to Report on Summary Financial Statements.
Chartered Professional Accountants February 28, 2018 Vancouver, Canada
KPMG LLP 777 Dunsmuir Street Vancouver V7Y 1K3 Canada Telephone 604-691-3000 Fax 604-691-3031
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.
26 ALDERGROVE CREDIT UNION SUMMARY CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2018, WITH COMPARATIVE INFORMATION FOR 2017 BOARD ATTENDANCE 2018 2017 ASSETS
Cash and cash equivalents $ 22,238,921 $ 8,504,156
Term deposits 65,207,744 50,122,969
Loans and advances to members 703,270,777 679,861,771
Premises and equipment 8,969,181 9,737,451
Investment property 1,172,250 1,222,950
Investment in CU Agencies Alliance Ltd. 600,000 250,000
Central 1 shares 3,296,197 3,058,105
Deferred income tax assets 984,940 654,092
Other assets 1,674,404 756,702
$ 807,414,414 $ 754,168,196
LIABILITIES
Central 1 call loans $ — $ 21,000,000
Accounts payable and accrued liabilities 3,546,560 1,933,774
Deposits from members 738,768,540 670,495,995
Membership equity shares 2,376,271 1,871,831
744,691,371 695,301,600
MEMBERS’ EQUITY
Investment equity shares 15,100,183 15,390,997
Retained earnings 47,622,860 43,055,080 Accumulated other comprehensive income: — 420,519 Unrealized gains on revaluation of Central 1 shares 62,723,043 58,866,596
$ 807,414,414 $ 754,168,196
Approved by the Board of Directors:
Director Director
See accompanying note to the summary consolidated financial statements.
27 ALDERGROVE CREDIT UNION SUMMARY CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
YEAR ENDED DECEMBER 31, 2018, WITH COMPARATIVE INFORMATION FOR 2017 BOARD ATTENDANCE 2018 2017 Financial income:
Loans $ 24,152,193 $ 20,273,900
Cash resources and investments 1,033,622 705,941
25,185,815 20,979,841
Financial expense - deposits and borrowed funds 9,594,478 7,336,408
Financial margin 15,591,337 13,643,433
Loan impairment expense (282,175) (203,436)
Other income 3,315,712 4,682,684
Gain on sale of assets 956,781 4,113,283
Net financial and other income 19,581,655 22,235,964
Operating expenses 13,904,078 15,099,467
Income from operations 5,677,577 7,136,497
Patronage rebates (785,447) (502,258)
Net income before income taxes 4,892,130 6,634,239
Income taxes:
Current 864,613 894,627
Deferred (330,848) 143,936
533,765 1,038,563
Net income 4,358,365 5,595,676
Other comprehensive income (loss), net of tax expense or recovery:
Net change in unrealized gains on available for sale assets — 407,870
Total other comprehensive income (loss) — 407,870
Total comprehensive income $ 4,358,365 $ 6,003,546
See accompanying note to the summary consolidated financial statements.
28 ALDERGROVE CREDIT UNION SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ EQUITY
YEAR ENDED DECEMBER 31, 2018, WITH COMPARATIVE INFORMATION FOR 2017 2018 2017
Investment equity shares:
Balance, beginning of year $ 15,390,997 $ 14,790,563
Shares issued in the year:
For cash, net of redemptions (1,027,997) 225,023
Reinvested dividends 737,183 375,411
Balance, end of year $ 15,100,183 $ 15,390,997
Retained earnings:
Balance, beginning of year $ 43,055,080 $ 37,770,532
Prior period adjustment, IFRS 9 adoption 862,000 —
Net income 4,358,365 5,595,676
Dividends on investment equity shares, net of tax (652,585) (311,128)
Balance, end of year $ 47,622,860 $ 43,055,080
Accumulated other comprehensive income, net of tax:
Unrealized gains on available for sale assets
Balance, beginning of year $ 420,519 $ 12,649
Prior period adjustment, IFRS 9 adoption (420,519) —
Net change in unrealized gains — 407,870
Balance, end of year — 420,519
Balance, end of year $ — $ 420,519
See accompanying note to the summary consolidated financial statements.
29 ALDERGROVE CREDIT UNION SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2018, WITH COMPARATIVE INFORMATION FOR 2017 2018 2017 Cash resources provided by (used in):
Operating activities: Net income $ 4,358,365 $ 5,595,676 Adjustments: Depreciation 932,907 902,142 Loan impairment expense 282,175 203,436 Net financial income (15,591,337) (13,643,433) Gain on sale of assets (956,781) (4,113,283) Provision for income taxes - current 864,613 894,627 Recovery on income taxes - deferred (330,848) 143,936
(10,440,906) (10,016,899)
Change in non-cash operating working capital 755,533 267,462
Interest received from loans 23,966,221 20,247,980 Interest received from cash resources and investments 1,033,622 705,941 Interest paid on deposits and borrowed funds (7,905,736) (7,880,956) Net increase in loans and advances to members (23,042,426) (84,830,703) Net increase in deposits from members 66,583,843 29,902,583 Income taxes paid (609,928) (284,302)
50,340,223 (51,888,894)
Investing activities: Net (increase) decrease in investments (15,672,867) 9,160,169 Purchase of premises and equipment (592,595) (565,896) Proceeds on sale of insurance assets — 4,000,000 Proceeds on sale of investment property — 1,565,151 Proceeds on sale of premises and equipment 1,183,561 4,556
(15,081,901) 14,163,980
Financing activities: Proceeds from (repayments of) Central 1 call loans 21,000,000 21,000,000 Net increase (decrease) in membership and investment 213,626 679,765 equity shares Dividends paid on investment equity shares (737,183) (375,411) (21,523,557) 21,304,354
Increase (decrease) in cash and cash equivalents 13,734,765 (16,420,560)
Cash and cash equivalents, beginning of year 8,504,156 24,924,716
Cash and cash equivalents, end of year $ 22,238,921 $ 8,504,156
See accompanying note to the summary consolidated financial statements.
30 YEAR ENDED DECEMBER 31, 2018
NOTE 1: BASIS OF PRESENTATION The summary consolidated financial statements have been prepared in accordance with section 128(4) of the Financial Institutions Act and are derived from the audited consolidated financial statements, prepared in accordance with International Financial Reporting Standards, as at and for the year ended December 31, 2018. Those audited consolidated financial statements were approved by the Credit Union’s Board of Directors on February 27, 2019 and can be obtained at any of our branches or online at www.aldergrovecu.ca.
31 LOCATIONS
Abbotsford Community Matsqui Community Murrayville Community 100 - 2600 Gladys Avenue 5824 Riverside Street 22242 48 Avenue Abbotsford BC Abbotsford BC Langley BC
Credit Union: 604 870 9990 Credit Union: 604 826 1201 Credit Union: 604 534 9477 Financial Planning: 604 857 6479 Financial Planning: 604 857 6479 Financial Planning: 604 857 6479 Insurance: 604 870 9944
Aldergrove Community Mt. Lehman Centre Otter Community 2941 272 Street 100 - 3224 Mt. Lehman Road 3661 248 Street Aldergrove BC Abbotsford BC Aldergrove BC
Credit Union: 604 856 7724 Credit Union: 604 857 0654 Credit Union: 604 856 2558 Financial Planning: 604 857 6479 Financial Planning: 604 857 6479 Financial Planning: 604 857 6479 Insurance: 604 856 1881 Insurance: 604 856 9733
32