bank brighter.
2013 ANNUAL REPORT banking is just the beginning welcome to
exceed mission expectations with brighter,brainier, all around better banking experiences.
Introducing a better vision breed of banking. We will always be leaders, never followers; we will foster a culture employees are proud to call their own; and, we will ensure our members achieve their goals while continually wowing them with exceptional service experiences.
values innovative spirit genuine connections trusted happy smiles integrity feisty independence trailblazing success
ANNUAL REPORT SUNOVA CREDIT UNION 2 brighter branches
established
1955 1968 / 69 1986 1988 1996 1997 20002001 2009 2011 Managing Partner: Chad Willis STONEWALL Managing Partner: Darcy Jacobs TEULON / INWOOD Managing Partner: Zane Hunter BEAUSEJOUR Managing Partner: Rina Mysak PINE FALLS Managing Partner: Donna Tschetter LAC DU BONNET Managing Partner: Wayne Bacchus WHITEMOUTH Managing Partner: Grit McLean PINAWA Managing Partner: Cyndi Typliski SELKIRK Managing Partner: Brenda Brown OAKBANK Managing Partner: Derek Christian RIVERBEND Managing Partner: Debbie Cairns LEILA
membership number of employees
5000 4863 4567 4000 189 3296 3000 2778 2679 2487 2000 1533 1421 1388 1323 1354
1000 1064 Stonewall - 13 Whitemouth - 6 Oakbank - 15
Agricultural Services Commercial + Whitemouth Oakbank Pinawa Leila Riverbend Teulon / Inwood Pine Falls Selkirk Lac du Bonnet Stonewall Beausejour Pinawa - 5 Lac du Bonnet - 11 Riverbend - 13 Teulon / Inwood - 11 Pine Falls - 7 Selkirk - 12 Leila - 11 Commercial + Agricultural Services - 13 Beausejour - 15 Corporate Office - 57
ANNUAL REPORT SUNOVA CREDIT UNION 4 brighter leadership
Ed Bergen President & CEO years with sunova
Ed Bergen (33)
Jeff Erickson (1) Jeff Erickson Vice President & Chief Financial Officer Curtis Fines (20)
Dallas Kostna (5)
Curtis Fines Clarence Abrams (6) Vice President & Chief Operations Officer Vanessa Foster (13)
Bev Kiel (20)
Dallas Kostna Cheryl Mitchell (14) Vice President & Chief Information Officer Paul Olfert (5)
Clarence Abrams Director, Finance hometown
ARBORG Vanessa Foster Vanessa Foster Director, Marketing
Bev Kiel Director, Internal Bev Kiel Audit & Control TEULON
Cheryl Mitchell Jeff Erickson Director, Facilities SELKIRK & Business Development
STONEWALL Ed Bergen Paul Olfert Curtis Fines Director, Talent Integration Cheryl Mitchell Clarence Abrams
OAKBANK
WINNIPEG Paul Olfert Dallas Kostna
ANNUAL REPORT SUNOVA CREDIT UNION 5 In a nutshell, our board represents you (our members). Together, they work to provide guidance by approving policies and brighter monitoring organizational results by attending monthly board meetings and semi-annual planning sessions. Our board is committed to the highest standards of corporate governance and guidance our policies reflect that commitment.
Kevin Beresford board expenditures Past Chair Each year, the expenditures on behalf of each member of the Director since: 2008 Term expires: 2014 board are reported. Individual totals are included below while the total of board expenditures for 2013 was $125,277.00. Lesli Malegus $125,277 Chair Director since: 2009 Term expires: 2015
Ken Roy Vice Chair Director since: 1984 $4,041.44 $11,338.60 $9,817.00 $11,784.07 $10,027.98 $16,358.05 $17,677.21 $19,268.77 $18,353.16 $6,610.72 Term expires: 2016
Ken Roy Ken Nicole Forsyth Secretary Jim Skrabek Randy Bialek Lesli Malegus Lesli Karen Dudeck Karen
Nicole Forsyth Nicole Director since: 2011 Justin Evenden Justin Kevin Beresford Kevin Donna Warenko Term expires: 2014 Huguette Dandeneau Huguette
Randy Bialek Director since: 2011 residence Term expires: 2014
Nicole Forsyth Huguette Dandeneau Huguette Dandeneau Director since: 1991 LAC DU BONNET Term expires: 2015
Jim Skrabek
TEULON Karen Dudeck Director since: 2012 Donna Warenko Term expires: 2015 Lesli Malegus PINAWA
SELKIRK Justin Evenden Director since: 2013 STONEWALL BEAUSEJOUR Term expires: 2016
Kevin Beresford Randy Bialek Donna Warenko Ken Roy Karen Dudeck Director since: 2011 WINNIPEG Term expires: 2016
Justin Evenden Jim Skrabek Director since: 2010 Retired from board: 2013
ANNUAL REPORT SUNOVA CREDIT UNION 6 brighter jobs
We’re pretty proud of all that we’ve accomplished over the past year but we’re even prouder of our amazing employees who made it all possible. Our staff are industry experts and let’s face it, downright awesome individuals who want to help our members achieve their financial goals (and have a little fun while they are at it)!
We know that in order for Sunova to continue to thrive, our employees must be happy and healthy. So that’s why we’ve made sure working for Sunova definitely has its perks! Our employees have access to:
• Superior compensation • Ongoing education and training • Recognition programs and events • Health programs and initiatives
It all sounds good on paper but how do we know it’s working? Well, here are some concrete numbers that show, overall, our staff are pretty darn happy!
Employee satisfaction: 97% Employee turnover: 7.92%
And just in case you were wondering… our employees completed a total of 11,402 training hours in 2013!
ANNUAL REPORT SUNOVA CREDIT UNION 7 brighter dogs
meet Akira, Zeus and Gallagher! Sunova’s Directors of Greetings (or D.O.Gs for short) at our Leila, Pine Falls and Lac du Bonnet branches.
Gallagher Akira Zeus Age: 3 Age: 4 Age: 3 Height: 33” Height: 30” Height: 31.5” Weight: 170 lbs Weight: 135 lbs Weight: 175 lbs Branch: Lac du Bonnet Branch: Leila Branch: Pine Falls
Our D.O.Gs play a very important role in the branches that includes plenty of sleeping, eating and occasionally rolling over for a belly rub.
Our D.O.G program was introduced back in 2005 with Takoda at our Selkirk branch. Since then, our program has expanded to include as many as six dogs at one point. Many of our D.O.Gs are now retired and enjoying time at home with their caregivers and families.
Sunova D.O.Gs are considered service dogs and must complete a comprehensive training program before being allowed to work in the branch. Sunova works with trainers, veterinarians as well as caregivers and branch staff to ensure that all of our D.O.Gs are receiving consistent and regular training throughout the year.
As our Director of Greetings program continues to evolve, Sunova’s primary concern is and always will be making sure all of our D.O.Gs are well cared for. We are lucky to work with an awesome team of professionals that ensure that our dogs are well taken care of and their best interests are always our top priority.
ANNUAL REPORT SUNOVA CREDIT UNION 8 brighter communities
Investing in our communities and giving back is one of the main building blocks for our corporate culture. We don’t give back just to ‘look good’, we give back and donate our time because it feels good. By partnering with local organizations and charities, we ultimately hope to strengthen the communities we live and do business in.
This year we gave back well over $65,000 to a number of sports teams, charities and events within our communities. And our definition of ‘giving back’ doesn’t mean we simply hand over a cheque. Our employees also volunteer their time at countless parades, festivals, sports tournaments, fundraisers and charity events within our communities. Chances are you’ll see at least a few volunteers in orange at most major community events and fundraisers.
SUNOVA GOLF CLASSIC
Each year, we’re proud to plan and host our signature fundraising event, the Sunova Golf Classic. This unique tournament annually raises more than $20,000 to fund local sports initiatives. The tournament has an extremely loyal following of golfers and sponsors and we’ve sold out nearly every year since its inception.
The 2014 tournament, ‘Around the World in 18 Holes’ is scheduled for Friday, June 13 at the Granite Hills Golf Course. If you’re looking for a day filled with laughter and fun, all while supporting a great cause, this tournament is made for you. Register quickly to guarantee your spot as we often sell out by the beginning of May! Check out our website for registration details.
ANNUAL REPORT SUNOVA CREDIT UNION 9 brighter milestones
2013
February • we are the first credit union in Canada to offer Interac flash
• our Marketing department wins 12 Achievement in Marketing Awards from the May Marketing Association of Credit Unions including Best in Show
June • our annual Sunova Golf Classic raises $20,800 for Team Manitoba and KidSport
July • our new (and improved!) website launches
• Sunova surpasses $1 billion in assets for the very first time August • we host hundreds of members at our annual member appreciation event, Surf’s Up at Sunova
October • our annual Halloween decorating and costume contest once again exceeds all expectations!
November • we host the first annual Sunova Kids’ Christmas Party for all dog-gone-good-savers
Sunova doesn’t like to settle for status quo, which is why we are always on the lookout for new products and services we can offer that makes banking just a little bit easier (and a lot more fun) while helping us stand out from other financial institutions. Here are a couple projects we have in the works and are planning on introducing in 2014: • Sunova PLANit (launched in February 2014) • The Sunova Conference Centre (opened in March 2014) • Interac eTransfers • A new and improved mobile app • Sunova branded corporate apparel for all staff
ANNUAL REPORT SUNOVA CREDIT UNION 10 brighter divisions
Hi. I’m Hubert!
Hubert Financial, a division of Sunova Credit Union, was designed specifically for those individuals who prefer to do their banking 100% online in exchange for better rates.
Launched in November 2010, Hubert quickly became known for some of the best online savings rates around coupled with a very simple and easy-to-use site.
Want to get to know Hubert a little bit better? Here are some just some of his stats.
MEMBERSHIP: 2450 AVERAGE INTEREST RATE PAID ON HIGH INTEREST SAVINGS ACCOUNT: 1.87% TOTAL INTEREST PAID IN 2013: $4,012,649
In addition to high interest savings accounts and terms, Hubert Financial offers a high interest US savings account. Hubert is also planning on offering mortgages to his (Manitoba-based) members sometime in 2014.
ANNUAL REPORT SUNOVA CREDIT UNION 11 brighter business
IN 2013, SUNOVA CREDIT UNION HELPED THOUSANDS OF OUR MEMBERS REACH THEIR FINANCIAL GOALS.
We helped fund 1796 new mortgages. We distributed over $253 million in personal loans. We paid over $17 million in interest on members’ deposits.
We also shared our financial success with our members in the form of dividends. Our Board of Directors approved a dividend payment of up to 4.50% for both common and surplus shares in 2013.
In an effort to provide our board with the additional benefit of basing the dividend payment approval on audited statements at our annual general meeting, full dividend payments will take place in May each year moving forward. To accommodate this change, for 2013 only, we paid a partial dividend payment of 2.75% on December 30 with the remainder to follow in May pending membership approval of our audited financial statements.
2013 FINANCIAL HIGHLIGHTS
Asset growth 18.81%
Deposit growth 21.30%
Loans growth 19.37%
Membership growth 7.71%
Equity 6.42%
ANNUAL REPORT SUNOVA CREDIT UNION 12 auditors Report of the Independent Auditor on the Summary Consolidated Financial Statements report
March 27, 2014 To the Members of Sunova Credit Union Limited
The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at December 31, 2013 and the summary consolidated statements of net income and comprehensive income, changes in members’ equity and cash flows for the year then ended, are derived from the audited consolidated financial statements of Sunova Credit Union Limited for the year ended December 31, 2013. We expressed an unmodified audit opinion on those consolidated financial statements in our report dated March 27, 2014.
The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary consolidated financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of Sunova Credit Union Limited.
MANAGEMENT’S RESPONSIBILITY FOR THE SUMMARY CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the preparation of a summary of the audited consolidated financial statements on the basis described in Note 1.
AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with Canadian Auditing Standards (“CAS”) 810, “Engagements to Report on Summary Financial Statements”.
OPINION In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of Sunova Credit Union Limited for the year ended December 31, 2013 are a fair summary of those consolidated financial statements, on the basis described in Note 1.
Chartered Accountants Winnipeg, Manitoba
ANNUAL REPORT SUNOVA CREDIT UNION 13 summary consolidated financial statement of financial position statements AS AT DECEMBER 31, 2013
2013 2012 $ $
ASSETS Cash on hand 5,520,192 4,961,804 Investments and deposits 96,297,192 76,021,048 Members’ loans - net of allowance for doubtful loans 915,215,673 766,699,246 Other assets 4,281,720 1,373,792 Investments in associates 8,770,898 8,700,827 Investment property 12,210,000 12,001,961 Property and equipment 32,397,487 34,155,647 Intangible assets 1,089,157 1,216,157 Goodwill 2,333,144 2,333,144 1,078,115,463 907,463,626
LIABILITIES Members’ savings and deposits 997,615,411 822,439,136 Accounts payable and accrued liabilities 3,499,885 3,657,486 Income taxes payable 543,468 150,969 Loans payable 5,000,425 18,001,519 Deferred income tax liabilities 2,204,094 1,623,150 1,008,863,283 845,872,260
MEMBERS’ EQUITY Members’ shares 26,499,961 23,698,294 Retained surplus 42,752,219 37,893,072 69,252,180 61,591,366 1,078,115,463 907,463,626
A full set of the consolidated financial statements including significant accounting policies and other explanatory information is available from Sunova Credit Union Limited or at www.sunovacu.ca.
APPROVED BY THE BOARD OF DIRECTORS
Director Director
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT SUNOVA CREDIT UNION 14 Summary Consolidated Statement of financial Net Income and Comprehensive Income statements FOR THE YEAR ENDED DECEMBER 31, 2013
2013 2012 $ $ INCOME Interest from members’ loans 35,636,701 31,649,833 Investment income 1,821,139 2,006,169 37,457,840 33,656,002 COST OF FUNDS Interest paid to members 17,241,573 16,245,430 Interest on loans payable 182,476 5,447 17,424,049 16,250,877
Financial margin 20,033,791 17,405,125 Provision for doubtful loans (550,800) (1,289,040) Other income 7,219,333 6,491,103 Net gains on fair value adjustments of investment property 83,351 43,871 Net interest and other income after provision for doubtful loans 26,785,675 22,651,059
OPERATING EXPENSES Personnel 11,425,463 10,997,122 Administration 3,197,724 2,978,445 Occupancy 3,510,903 3,459,831 Organizational 421,073 374,983 Member security 943,143 802,615 19,498,306 18,612,996 INCOME BEFORE INCOME TAXES 7,287,369 4,038,063 PROVISION FOR INCOME TAXES 1,354,113 434,950 NET INCOME AND COMPREHENSIVE INCOME FOR THE YEAR 5,933,256 3,603,113
A full set of the consolidated financial statements including significant accounting policies and other explanatory information is available from Sunova Credit Union Limited or at www.sunovacu.ca.
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT SUNOVA CREDIT UNION 15 Summary Consolidated Statement of financial Changes in Members’ Equity statements FOR THE YEAR ENDED DECEMBER 31, 2013
Members’ shares Retained surplus Total members’ equity $ $ $
BALANCE AT JANUARY 1, 2013 23,698,294 37,893,072 61,591,366
Net income and comprehensive income for the year - 5,933,256 5,933,256 Share dividend on common shares 843,994 (843,994) - Share dividend on surplus shares 230,115 (230,115) - Common shares issued - net of redemptions 1,896,160 - 1,896,160 Surplus shares issued - net of redemptions (168,602) - (168,602)
BALANCE AT DECEMBER 31, 2013 26,499,961 42,752,219 69,252,180
BALANCE AT JANUARY 1, 2012 18,004,819 35,269,430 53,274,249
Net income and comprehensive income for the year - 3,603,113 3,603,113 Share dividend on common shares 773,875 (773,875) - Share dividend on surplus shares 205,596 (205,596) - Common shares issued - net of redemptions 4,946,310 - 4,946,310 Surplus shares issued - net of redemptions (232,306) - (232,306)
BALANCE AT DECEMBER 31, 2012 23,698,294 37,893,072 61,591,366
A full set of the consolidated financial statements including significant accounting policies and other explanatory information is available from Sunova Credit Union Limited or at www.sunovacu.ca.
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT SUNOVA CREDIT UNION 16 Summary Consolidated Statement financial of Cash Flows statements FOR THE YEAR ENDED DECEMBER 31, 2013
2013 2012
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ $ Net income and comprehensive income for the year 5,933,256 3,603,113 Items not affecting cash Depreciation and amortization expense Property and equipment 2,064,418 2,161,709 Intangible assets 174,460 173,669 Investment property valuation adjustment (83,351) (43,871) Deferred income taxes 580,944 (97,350) Loss (gain) on sale of property and equipment 30,328 (30,328) Provision for (recovery of) doubtful loans 550,800 1,289,040 Equity loss (earnings) from associates (70,071) 108 9,180,784 7,056,090 Net change in non-cash working capital items 3,159,874 (27,328,086) 12,340,658 (20,271,996)
INVESTING ACTIVITIES Property and equipment, intangible assets and investment (508,734) (772,680) property additions Proceeds from property and equipment disposals - 87,350 Investment in associates - (1,644,887) (508,734) (2,330,217)
FINANCING ACTIVITIES Issuance of members’ shares - net of redemptions 1,896,160 4,946,310 Redemption of surplus shares (168,602) (232,306) Change in loans payable (13,001,094) 18,001,519 (11,273,536) 22,715,523
INCREASE IN CASH ON HAND 558,388 113,310 CASH ON HAND - BEGINNING OF YEAR 4,961,804 4,848,494 CASH ON HAND - END OF YEAR 5,520,192 4,961,804
SUPPLEMENTAL INFORMATION Interest received 37,260,003 33,419,890 Interest paid 17,679,640 16,718,130 Income taxes paid 380,670 514,396
A full set of the consolidated financial statements including significant accounting policies and other explanatory information is available from Sunova Credit Union Limited or at www.sunovacu.ca.
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT SUNOVA CREDIT UNION 17 Summary Consolidated financial Financial Statements statements DECEMBER 31, 2013
1. BASIS OF PRESENTATION
These summary consolidated financial statements have been derived from the audited consolidated financial statements of Sunova Credit Union Limited (the “Credit Union”) for the year ended December 31, 2013.
The criteria developed by management for the preparation of the summary consolidated financial statements is as follows: that the information included in the summarized consolidated financial statements is in agreement with the related information in the complete consolidated financial statements, and that the summarized consolidated financial statements contain the information necessary to avoid distorting or obscuring matters disclosed in the related complete consolidated financial statements, including the notes thereto, in all material respects.
A full set of the consolidated financial statements including significant accounting policies and other explanatory information is available from the Credit Union or at www.sunovacu.ca
2. COMPLIANCE WITH MINIMUM CAPITAL AND LIQUIDITY REQUIREMENTS
The Credit Union is in compliance with the capital and liquidity reserve requirements at December 31, 2013 established by the Regulations to The Credit Unions and Caisses Populaires Act of Manitoba.
Readers of the summary consolidated financial statements are advised that in order to appropriately interpret the Credit Union’s capital and liquidity, the reader must refer to the audited consolidated financial statements and notes for the year ended December 31, 2013, which contain the information detailing the calculation.
ANNUAL REPORT SUNOVA CREDIT UNION 18 sunovacu.ca | bank brighter.
ANNUAL REPORT SUNOVA CREDIT UNION 19