CREDIT UNION DEPOSIT GUARANTEE CORPORATION ANNUAL REPORT MESSAGE 2014

January 2015

Deposits Fully Guaranteed

Credit Union Deposit Guarantee Corporation is the primary regulator for credit unions. The Corporation is given its mandate through provincial legislation, The Credit Union Act, 1998, for the main purpose of guaranteeing the full repayment of deposits held in Saskatchewan credit unions. The Corporation has successfully guaranteed the repayment of deposits held in Saskatchewan credit unions for over 60 years. By guaranteeing deposits and promoting responsible governance, the Corporation contributes to confidence in Saskatchewan credit unions.

The Corporation will continue research and development to respond to regulatory changes at the international and federal levels such as those for liquidity and capital requirements, and accounting standards changes. We will engage with stakeholders and inter-jurisdictional regulators to promote and advocate for common approaches to liquidity in support of a strong and stable provincial credit union system.

In 2014 the Corporation completed a multi-year project to revise its supervisory framework. The revised framework aligns with industry best practices and regulatory expectations, including methodology to assess a credit union’s risks, risk management practices and corporate governance. In 2015 credit unions will see the Supervisory Framework implemented along with re-designed tools that correspond with the revised framework and methodology.

The Corporation acknowledges that Saskatchewan credit unions have a long history of holding themselves to high standards, and have demonstrated their willingness to adopt credible, industry-based standards. This helps to ensure Saskatchewan credit unions can successfully meet the challenges of a rapidly changing financial services industry and increasing regulatory requirements.

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

Table of Contents

1. President and CEO Message Page 1

2. Order of Merit Page 2

3. Board of Director Service Award Page 3

4. Vision, Mission, Values, and Principles Page 4

5. Corporate Governance and Structure Page 6

6. Credit Union Staff Page 12

7. Community Involvement Page 14

8. Credit Union Market Code Page 15

9. Minutes of 70th WCU Annual Meeting Page 16

10. Management Discussion and Analysis Page 21

11. Auditors Report and Financial Statements Page 31

President and CEO Message

The year 2014 was once again a successful and challenging year for Weyburn Credit Union (WCU). As the 8th largest credit union in Saskatchewan, your Credit Union experienced strong financial results. WCU’s assets increased by over 10% and wealth management assets under management increased by over 12%. At the end of the year, total assets under administration were over $671 million. Capital levels increased, high efficiency levels were maintained, and loan delinquency remained low. Total comprehensive income increased to $3.42 million from $2.43 million in 2013.

The main challenges faced by WCU were in the areas of growing non-traditional competition, increasing consumer expectations, rising regulation requirements, and increasing operating and technology costs.

We faced these challenges by ensuring that you continue to receive extraordinary service, convenient and innovative products, and access to local employees who are competent and caring. We hired a firm to conduct focus group research and a survey of your perceptions of WCU. We wanted to know what people expect from a financial services provider. The findings were valuable to us as they provided an overview of your needs and expectations, as well as an idea of how we are perceived. These findings were presented to the Board, management, and staff. The findings will be incorporated into future corporate plans to ensure we are providing you the best service and financial solutions possible.

In 2014 we continued to invest heavily in technology to meet increasing consumer expectations. The demand for online and mobile access continues to grow. We launched Interac e-Transfer, a mobile banking app, and Deposit Anywhere which were all very well-received. There will be more to come in this area.

As always, the staff at Weyburn Credit Union is the key to our members’ satisfaction and to our success. We continue to train our staff in our high performance sales and service culture. This ensures that our employees continue to grow and provide top quality advice and service.

We want to thank the management and staff of Weyburn Credit Union for the contributions, dedication, and support they provide. As well, we want to acknowledge the leadership and guidance provided by the Board of Directors. All of these people work hard to make your Credit Union strong.

Most importantly, thank you to the members for your continued support and trust in Weyburn Credit Union. We appreciate your business very much and will continue to work hard to be your first choice for all your financial needs.

Respectfully,

Glenn Ziegler Don Shumlich Board President Chief Executive Officer

1 Order of Merit

The Saskatchewan Credit Union Director Recognition Program recognizes elected officials who have demonstrated a significant contribution to the Saskatchewan credit union system. A Saskatchewan credit union may induct one Board member, past or present, annually to the Saskatchewan Credit union Director Book of Honour and present them with a Saskatchewan Credit Union Order of Merit.

The recipient is determined based on the award program criteria as follows:

• A record of exemplary service to a Saskatchewan credit union • Demonstrated leadership and an understanding of and commitment to co- operative principles • A positive public profile that reflects favourably on the credit union and the local community.

Weyburn Credit Union is honored to posthumously induct Robert Williamson of the area to the Saskatchewan Credit Union Director Book of Honor and to present his family with the 2014 Order of Merit.

Bob was on Weyburn Credit Union’s Board of Directors for 29 years from 1947 to 1976. The award will be presented at the Weyburn Credit Union Annual Meeting on April 15, 2015.

Robert Williamson

Past Recipients of the Order of Merit 2012 – Quinton O. Patrick 2011 – Ron Milleker 2010 – Lloyd Soroka 2009 – Eliford Mott (posthumously) 2008 – Mel Eggum

2 Board of Director Service Award

Glenn Ziegler – 9 Years - Retirement

Glenn is currently self-employed as a public accountant in Weyburn where he resides with his wife Brenda. They have two children - Adam and Ashley. Adam earned his Bachelor of Environmental Science Degree in 2011 from the University of Lethbridge. He has since moved back to Weyburn and is employed locally with NAL Resources. Ashley has obtained her Business Degree from the University of Regina and is now employed in the family accounting business.

Glenn has 35 years of experience as a public accountant, all of which took place within the City of Weyburn.

Glenn has been involved with numerous organizations over the years in a volunteer capacity, many of which were related to his children’s sports activities and his church. His community involvement also includes his position on the Board of Directors for the Weyburn Credit Union for the past nine years.

Glenn has contributed greatly to Weyburn Credit Union. He brought a lot of knowledge and commitment to his role as a Director. He has been a collaborative and engaged member of the Board. His ideas and direction will be missed.

Glenn is grateful for the opportunity to have served the Weyburn Credit Union on the Board of Directors.

3 Vision, Mission, Values, and Principles

Our Vision

Weyburn Credit Union’s vision is to be the financial institution of choice. Enhancing lives … Enriching communities.

Our Mission

Weyburn Credit Union will:

• Provide distinctive financial solutions at competitive rates. • Create delighted, profitable, lifetime relationships, where the people of our community choose our credit union as their primary financial institution. • Remain a strong, profitable, progressive organization. • Provide employees with an environment and opportunities that enrich their personal and professional lives. • Commit to making a positive impact on our community, socially, economically, and environmentally.

Our Values

Honesty and Integrity Recognizing the importance of transparency in our business practices, we are open and upfront in our communication. We are trustworthy and accountable, and adhere to the highest standards of professionalism and confidentiality. Everyone is treated with dignity and respect.

Excellence We are committed to providing the highest quality of service, products, and advice. We do this by creating an innovative and inspiring environment that supports continuous learning. We hire people who display a desire for professional growth and excellence in their daily work.

Sharing When fiscally prudent, we share our profits with our members, our employees, and our community. Teamwork allows us to share our ideas, enthusiasm, and positive attitudes with members, coworkers and system partners, ensuring an organization that is truly collaborative. We share our time as an organization and as individuals, contributing to a wide range of community projects and activities.

Cooperation We are guided by the cooperative principles of voluntary and open membership, democracy, economic participation, independence, continuous education, cooperation among cooperatives, and concern for community. These principles set us apart in the financial industry.

4 Leadership Strong leadership is provided at all levels of this organization. We are committed to the sound business practices that reflect our core values. Financially responsible decisions ensure a successful, stable credit union.

Co-operative Principles

As a true co-operative financial institution, Weyburn 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.

Autonomy and Independence Co-operatives are autonomous, self-help organizations controlled by their members. If they enter to 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.

5 Corporate Governance and Structure

The governance of Weyburn Credit Union is anchored in the co-operative principle of democratic member control. The Board of Directors is ultimately responsible for ensuring that the Credit Union is managed and operated in a sound and prudent manner. Management is responsible to oversee the operation of the Credit Union through Board-approved plans and polices.

Board of Directors

Mandate and Responsibilities The Board is responsible for the strategic oversight, business direction, and supervision of management of Weyburn 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 duties and responsibilities of the Board are outlined in detail in Credit Union policy. The following is a summary of these responsibilities:

• Establish and update the vision, mission, values, objectives and policies of the Credit Union • Select and employ the Chief Executive Officer (CEO) as well as determine his/her responsibilities, duties, and compensation • Maintain good public and member relations • Establish and approve plans • Ensure that services of the Credit Union are adequately serving the needs of the members and non-members • Review and appraise results • Be accountable to the membership for directing the affairs of the Credit Union through the establishment of objectives and policies that will provide for the needs of the members and safeguard the assets of the Credit Union. • Authorize budgets and expenditures • Perform responsibilities required by legislation • Attend all Board meetings • Maintain a favourable Credit Union image (confidentiality) • Review the performance of the Chief Executive Officer • Review and approve the strategic plan, annual business plan, and budgets

Board Composition The Board is comprised of nine directors, all of whom are independent. Directors are elected by the membership for three-year terms. There is no limit to director tenure. The Nominating Committee has oversight responsibility for director nominations and the election of directors is in accordance with bylaws and policies. Voting is by paper ballot during in-branch elections and election results are announced at the Credit Union’s Annual General Meeting.

6

Back: Joleen Tuchscherer, Rod Nieviadomy, Jeff Richards, Randy Vopni, Rob Ror, Lynn Colquhoun Seated: Gary Beck, Norman Wall, Glenn Zeigler

Directors and Attendance The Board holds eleven regular board meetings and one strategic planning session each year. In addition to regular board meetings, directors attend special board meetings, the annual general meeting, and directors serve on one or more of the five standing board committees. As well, directors may be asked to participate in other Credit Union committees.

Board members are expected to attend all board and committee meetings. Directors who miss three consecutive meetings of the board or one third of the total annual regular meetings without just cause will be removed from the board.

The following chart lists the Credit Union’s directors, their occupation, their board position, their years on the board at Weyburn Credit Union and at other credit unions, their attendance, and the year in which their term expires. The President, 1st Vice President, and 2nd Vice President are on the Executive Committee.

7 ATTENDANCE Years Term Name Occupation Board Committee of Meetings/ Expires Meetings Service Planning Session Gary Beck /Livestock 14/15 Executive 10/10 44.00 2nd Vice President Producer Human Resource 1/1 WCU-16.25 Planning Session 1/1 Lang-27.75 Rob Ror Retired - 14/15 Audit & Risk 4/4 6.00 SaskTel Human Resource 1/1 2015 Scholarship 1/1 Planning Session 1/1 Glenn Ziegler Accountant 14/15 Executive 10/10 9.00 President Community Fund 3/3 Planning Session 1/1

Lynn Colquhoun Teacher/RCSSD 15/15 Conduct Review 3/3 2.00 Coordinator Nominating 3/3 Scholarship 1/1 Planning Session 1/1 Rod Nieviadomy Journeyman 14/15 Community Fund 3/3 6.00 Welder and Conduct Review 3/3 Planning Session 1/1 2016 Machinist / Teacher Joleen Tuchscherer HR Manager 12/15 Audit & Risk 3/4 2.00 Human Resource 1/1 Planning Session 1/1

Randy Vopni Retired – Ag 14/15 Audit & Risk 3/4 24.00 Services Human Resource 1/1 Nominating 3/3 Planning Session 1/1 Norman Wall Ag Services 15/15 Executive 10/10 10.50 1st Vice President Audit & Risk 4/4 Conduct Review 2/3 2017 Planning Session 1/1 Jeff Richards Management – 14/15 Conduct Review 2/3 1.00 Education Nominating 3/3 Scholarship 1/1 Planning Session 1/1

Committees The responsibilities of the board of a modern financial services organization involve an ever-growing list of duties. Weyburn 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 the Credit Union.

The Board has established five standing board committees to assist in carrying out board responsibilities. Each committee has a board-approved profile outlining its purpose and responsibilities. Each committee is comprised of directors appointed by the Board for a one-year term. Committees meet throughout the year and provide meeting minutes and reports to the board. The board is also involved in the Credit Union’s Community Fund Committee. Board members also volunteer to be on the Scholarship Committee.

8 Executive Committee is comprised of three directors and is responsible for acting on behalf of the Board on matters that are required to be dealt with between board meetings as may be required on matters that can be delegated by the Board. The other duties of the Committee are to provide orientation and mentorship to new directors, provide governance oversight, and review and recommend policy changes to the Board. The Committee members are:

• Glenn Ziegler, President (Chair) • Norman Wall, 1st Vice President • Gary Beck, 2nd Vice President

Audit and Risk Committee is comprised of four directors and is responsible for overseeing the financial reporting process, financial statements, internal and external auditors, and risk management. Committee members are:

• Norman Wall (Chair) • Rob Ror • Joleen Tuchscherer • Randy Vopni

Nominating Committee is comprised of four directors and is responsible for overseeing the nomination and election processes for directors. Committee members are:

• Randy Vopni (Chair) • Lynn Colquhoun • Jeff Richards • Joleen Tuchscherer

Conduct Review Committee is comprised of four directors, none of which may be the chair of the Board. The Committee ensures Weyburn 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. Committee members are:

• Lynn Colquhoun (Chair) • Rod Nieviadomy • Jeff Richards • Norman Wall

Human Resources Committee is comprised of four members of the Board and is responsible for overseeing management and staff compensation and benefits, as well as recommending the human resource budget to the Board. Committee members are:

• Joleen Tuchscherer (Chair) • Gary Beck • Rob Ror • Randy Vopni

9 Community Fund Committee is comprised of two members of the Board, two members of management, and two members of staff. A fund is established to help sponsor local events or projects in the communities that Weyburn Credit Union serves. The goal of the fund is to focus on strategic sponsorship opportunities that align with our goals, vision, mission, and core values.

Committee members are:

• Rod Nieviadomy (Chair – Board Member) • Glenn Ziegler (Board Member) • Lois Adam (Staff) • Don Baillie (Staff) • Jeff Hayward (Management) • Pam Stables (Management) • Mel Hoffman (Committee Resource)

Scholarship Committee is comprised of three volunteer members of the Board. The Committee is responsible for reviewing and scoring scholarship applications from the high schools within the communities we serve. The scoring is based on three areas: community involvement, academic grades, and school involvement. Committee members are:

• Rob Ror • Lynn Colquhoun • Jeff Richards

Board Evaluation The Board completes individual director, Board, and president appraisals twice a year. The data is consolidated and presented to the Executive Committee for review and discussion. The information is then shared with the entire Board. Performance evaluations enable the Board to formally review its effectiveness and establish goals for improvement, as well as identify development opportunities.

Board Compensation The Executive Committee annually reviews directors’ compensation and makes recommendations to the Board of Directors to ensure it remains competitive with other similar asset sized provincial credit unions. In 2014, the aggregate remuneration paid to all Directors for their services for the year was $56,500 ( 2013 - $47,843). Travel expenses for 2014 paid by the Credit Union on behalf of Directors were $28,384 (2013 - $23,886). WCU covers Board out-of-pocket travel expenses.

Director Training Weyburn Credit Union has a Director Development Policy in place. The policy covers the training, education, and development of Directors so that they are better able to fulfill their responsibilities. Director development may be obtained by attending meetings, conferences, and education sessions. The Credit Union Director Achievement program through CUSource is the Credit Union’s main source of education for directors. In 2014, the aggregate cost for director professional development for the year was $7,735 (2013 - $7,121).

10 Executive Management

Executive Management is responsible for managing, monitoring, and controlling Weyburn Credit Union operations in accordance with legislation, the Standards of Sound Business Practice, and Board policy. Weyburn Credit Union has an experienced executive management team. The executive management team and structure is as follows:

CEO - Don Shumlich

VP of Finance - Krista Hayward

VP of Lending - Randy Geisler

VP of Wealth Management - Vacant

VP of Retail - Jeff Hayward

VP of Development - Mel Hoffman

VP of Compliance and Risk - Ryan Tebbutt

11 Weyburn Credit Union Staff (at March 1, 2015)

ADMINISTRATION Don Shumlich Kim Klassen Elise Haines Tara Kaip

COMPLIANCE & RISK Ryan Tebbutt Shelley Hippe

DEVELOPMENT Valerie Ness Karen Becker Bikram Sandhu Rhonda Fradette Don Baillie Wally Cameron

FINANCE Krista Hayward Juliet Ostrea Amy Furgason Lois Adam Ashley Kaip Marnel Spencer Brooke Charlton Pamela Anderson Haley Bousfield Stacey Cameron Jodie Schneider

LOANS Randy Geisler Koreana Bjarnason Andrea Stepp Marcy Heimlick Charles Ries Marie Ballenas Cheryl Krowicki Marliss Gilchrist Colleen Roettger Nicole Siwy Debbie Chessall Rachel King Greg Happ Rena Chicoine Jim Paul Stephanie Lang Karen Umpherville Tamara Murray Kay Appelquist Virginia Kelln Kelly Johnson

12 RETAIL Jeff Hayward Kelly Prochinsky Amanda Leibel (On Leave) Krista Reinfelds Brittney Delanoy Laura Pelechaty Carrie Gulash Lauren Garven Cassandra Schuette Leah Duthie Chantel Aronson Marilou Mowchenko Fran Long Megan Paxman Jenna Kater Melissa Eberts Jennifer Isaak Michelle Ferris Jennifer Thompson Pam Stables Jessica Bonneau Ryan Bader Joanne Paulhus Simone Everett Kaitlyn Harrison (On Leave) Tanisha Quintyn Katrina Guest Vanessa Lanktree (On Leave) Kelley Neiszner

LANG BRANCH YELLOW GRASS BRANCH

Donna Rooney (Lang/Yellow Grass Branch) Cynthia Beck (Lang/Yellow Grass Branch) Tina Ward (Lang/Yellow Grass Branch) Amanda Kopec Christine Taylor Meagan Eberts Marla Ehr

WEALTH MANAGEMENT Brenna Bourassa Sara Lawrence Darla Brenholen Sean Purdue Heidi Fowler (On Leave) Sharon Szilagyi Karilynn Nikolejsin Susan Lawrence Marj Wanner Teresa Sherman Niki Johnston Tony Gill Pauline Vatamaniuck Ron Swan

13 Community Involvement

As a community-based and member-owned financial institution, Weyburn Credit Union takes its community involvement very seriously because we believe our success is a direct result of the growth and development of the communities we serve. The Credit Union’s Board and staff are committed to making a positive impact in our community; socially, economically, and environmentally.

Weyburn Credit Union (WCU) provides support to the communities we serve in many ways. A few of them are outlined below:

Staff Community Involvement Bonus Objective The Board of Directors has identified that community involvement is an important role for staff and want to encourage all employees to be involved in the community. To recognize and reward the personal time commitment that our employees have made throughout the year to various organizations, employees will be eligible to receive bonus points on their performance reviews. Bonus points are given for being a community participant, taking on leadership roles, and volunteer hours.

Corporate Donations and Event Sponsorships WCU makes corporate donations to organizations that provide a community benefit. Sponsorships and donations involve financial and/or in-kind contributions (staff time, donation of equipment, provision of office space, etc.) to local events and organizations. Preference is given to charitable and non-profit events and organizations.

Scholarships WCU awards scholarships to individuals furthering their education. The Credit Union offers the R. S. Williamson and Eliford Mott Memorial Scholarships and the Q. O. (Quint) Patrick and C. H. (Chuck) Hodgson Scholarships.

The 2014 recipients were: • Williamson/Mott Scholarships – Jane Kish, Joanne Stewart, Rhett Williams • Patrick/Hodgson Scholarships – Naté-Marie Aspen, Kimberley Potuer, Carissa Ruckaber, and Aaron Tytlandsvik

Weyburn Credit Union Community Fund The Weyburn Credit Union Community Fund was established to help sponsor local events or projects over $10,000 and/or lasting longer than three years. The funding comes from the Credit Union’s end of the year profits. The fund will focus on strategic sponsorship opportunities that align with the Credit Union’s goals, priorities, and core values by contributing in a meaningful way to the communities we serve. Weyburn Credit Union invites applications to be submitted.

In 2014, the following projects/organizations received funding: • Weyburn Airport Board - $10,000 • Pioneer Woman Sculpture - $20,000 • Tommy Douglas Centre - $10,000 • Haig Elementary School playground sponsorship - $5,000

14 Credit Union Market Code

Weyburn 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 Weyburn Credit Union.

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

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

• Privacy to protect the interests of those who do business with Weyburn 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 the 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 Weyburn Credit Union.

• Risk management to ensure all risks are measured and managed in an acceptable fashion.

15

Minutes of the 70th Annual Meeting

WEYBURN CREDIT UNION LIMITED HELD MARCH 26, 2014

Weyburn Credit Union President Glenn Ziegler called the meeting to order at 7:32 p.m. Mr. Ziegler welcomed the 36 members and two guests in attendance.

A moment of silence was held in memory of credit union and co-operators officials who have passed on.

AGENDA

President Ziegler presented the agenda for the meeting, requesting amendments, and additions. There were none.

Moved By Norman Wall

Seconded By Rob Ror Motion To accept the agenda for the 70th annual meeting as presented. MOTION CARRIED

INTRODUCTIONS

President Ziegler introduced the Weyburn Credit Union Board of Directors in attendance – Gary Beck, Ror Ror, Joleen Tuchscherer, Randy Vopni, Norman Wall, and outgoing Board member Jody Holzmiller. Directors Rod Nieviadomy and Lynn Colquhoun extended their regrets.

CEO Shumlich welcomed and introduced the guests attending the meeting.

Past Weyburn Credit Union Board of Directors: ♦ Del Flaten ♦ Ron Wormsbecker

Representing other credit unions and credit union system associates: ♦ Clint Neuls, CEO, Stoughton Credit Union ♦ Ken Nadiger, SaskCentral Client Relations Manager ♦ David Prost, Virtus Group

Representing the media: ♦ Greg Nikkel, Weyburn Review ♦ Myrna Jewel, AM 1190

PROOF OF MEETING NOTICE AND ANNUAL REPORT AVAILABLE

To comply with the Credit Union Act, 1998, regulations, proof must be provided that:

(a) Notice of the annual meeting was advertised at least twenty-one days prior to the meeting date. (b) The annual report was available to the membership at least ten days prior to the meeting date.

16 As such, CEO Shumlich referred to two separate affidavits that evidenced compliance with the requirements. The affidavits were sworn by President Glenn Ziegler and Vice President of Retail Jeff Hayward.

VERIFICATION OF QUORUM

Pursuant to credit union regulations, a certain number of members must be in attendance to hold a meeting and quorum. The quorum at an annual meeting of members is 15 members entitled to vote. A proper quorum is in attendance with 36 members registered.

MINUTES OF THE 69th ANNUAL MEETING

First Vice President Rob Ror reviewed the minutes of the 69th annual meeting. He invited comments, questions, errors, or omissions arising out of the minutes of the regular annual meeting. There were none.

Moved By Rob Ror

Seconded By Randy Vopni Motion To accept the minutes of the 69th annual meeting as presented. MOTION CARRIED

President Ziegler inquired if there was business arising out of the minutes of the 69th annual meeting. There were none.

QUESTION CARDS

President Ziegler invited members to use the question cards provided. Questions would be addressed at appropriate times throughout the meeting.

MESSAGE FROM THE BOARD

President Ziegler presented a message from the Board of Directors for the 2013 year-end. Some of the points touched on during the presentation are as follows:

♦ President Ziegler stated that Weyburn Credit Union has a strong team with the dedication, commitment, and vision that will ensure a sustainable community-minded credit union for many years to come. ♦ On behalf of the Board of Directors of Weyburn Credit Union, management and staff were congratulated for their contribution in achieving the financial and strategic goals of the organization. ♦ President Ziegler thanked the membership for their support, which has made our credit union successful for many years, not just in 2013. ♦ The membership can be assured that the Board, the executive management team, and the entire credit union system are working diligently and cooperatively to prepare for current and future challenges such as increasing competition, anticipated low interest rates and tight margins, and the ever-evolving technology innovations. ♦ With these challenges come many opportunities that Weyburn Credit Union Ltd. is meeting proactively to ensure continued success.

17 NOMINATING COMMITTEE REPORT AND ELECTION RESULTS

♦ Nominating Committee Chair Gary Beck provided an overview of the Nominating Committee's duties. ♦ There were three vacancies on the Board of Directors, with two incumbents (Randy Vopni and Norman Wall) and one nominee (Jeff Richards) running for election. With three vacancies and three nominees, no election was necessary. ♦ Each of the three Directors will hold a place on the Board for a 3-year term. ♦ Due to prior commitments, newly-elected Board member Jeff Richards was unable to attend the meeting. ♦ Gary Beck read a biography of each Director and congratulated them on their acclamation to the Board of Directors.

AUDITOR'S REPORT

♦ Mr. David Prost of Virtus Group reviewed the Auditor's Report as presented in the 2013 Annual Report. ♦ Weyburn Credit Union is a very prudently managed and profitable institution and is strategically positioned to meet upcoming challenges in the financial services industry. ♦ Mr. Prost stated that the summarized financials included in the 2013 Annual Report is a fair representation of the full financial statements available on the Weyburn Credit Union website and in hardcopy at the meeting. ♦ He thanked the Board, management, and staff for their continued dedication to accountability this is second to none at Weyburn Credit Union.

Moved By Norman Wall

Seconded By Joleen Tuchscherer To accept the 2013 Auditor’s Report provided by the Virtus Group as Motion presented. MOTION CARRIED

PRESENTATION OF 2013 FINANCIAL STATEMENTS

♦ Vice President of Finance Krista Hayward provided an overview of the financial position for the year ending December 31, 2013 through a PowerPoint presentation. ♦ Vice President K. Hayward referred meeting attendees to the summarized financial statements that could be found in the 2013 Annual Report. ♦ A copy of the complete financial statements and notes are available on the Weyburn Credit Union’s website. As well, a number of paper copies of the full financial statements were printed and made available for distribution at the annual meeting. ♦ At the conclusion of the presentation, VP K. Hayward asked if there were any comments or questions arising from the overview. Virtus Group’s David Prost inquired about the recent provincial budget announcement. VP K. Hayward was pleased to let the membership know that their fair taxation advocacy efforts paid off. The government has chosen to maintain the current provincial tax provisions for credit unions, including the special income tax reduction, and the exemption from paying the provincial capital tax, recognizing the restraints credit unions face related to raising capital as well as their important place in the economy of Saskatchewan.

Moved By Jody Holzmiller

Seconded By Rob Ror To accept the financial statements for the year ending December 31, Motion 2013 as presented. MOTION CARRIED

18

APPOINTMENT OF AUDITORS

President Ziegler read the requirements for the appointment of auditor. Pursuant to Section 270, Subsection (1) of the Credit Union Act, 1998, the Board of Directors recommends to the membership that the firm of Virtus Group, Chartered Accountants and Business Advisors LLP, be appointed as the auditor for Weyburn Credit Union Limited for 2014.

Moved By Randy Vopni

Seconded By Norman Wall To accept the Weyburn Credit Union Board of Director’s recommendation that the firm of Virtus Group, Chartered Accountants Motion and Business Advisors LLP, be appointed as the auditor for Weyburn Credit Union Limited for 2014. MOTION CARRIED

MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

The Message from the Chief Executive Officer was presented by Don Shumlich. CEO Shumlich’s presentation is summarized below:

♦ The economy in Saskatchewan and specifically this part of the province continued to be strong in spite of economic struggles in the rest of the world. Weyburn and region experienced population growth and continued investment. Our total assets under administration increased to over $605 million. ♦ A $668,520 rebate and bonus package was paid to members. ♦ Weyburn Credit Union remains strong, stable, and growing. We are well positioned for more success in the future. The year 2013 was successful. ♦ The Credit Union continued to make numerous corporate donations, sponsorships and provide scholarships. As well, our staff continued to volunteer their time and skill to many community events and organizations. We continue to make a very positive impact in the communities we serve. ♦ The five strategic goals that are being focused on in 2014 are: o Financially Strong o Member Growth and Community Support o Efficient Operations, and o Best People ♦ CEO Shumlich expressed his gratitude to staff and management for their skill, hard work, dedication, and efforts to ensure members always receive excellent service. ♦ He thanked the Board of Directors for their hard work in ensuring that members’ needs are met and that Weyburn Credit Union remains a strong relevant successful organization. The responsibilities of a credit union director have become more demanding over the years. Changes in regulatory requirements and governance practices and technology have meant more demands on board members. He thanked them for their time, support, and direction over the past year. Their contributions are very much appreciated. ♦ This year will also bring changes in our Board of Directors. Jody Holzmiller is retiring from the Board after three years of service. She was thanked for her contribution. Also, our newest director, Jeff Richards, was welcomed to the Board. ♦ CEO Shumlich also thanked the members for their business and continued support. They have made Weyburn Credit Union a strong and thriving organization and the Credit Union will continue to work hard to earn their business.

19

RETIREMENT AND SERVICE AWARD PRESENTATIONS

♦ Board member Randy Vopni presented long-term service awards to the following Directors: o Gary Beck – 15 years o Rod Nieviadomy – 5 years o Rob Ror – 5 years o Norman Wall – 10 years ♦ He also presented a retirement service award to Jody Holzmiller for her commitment to the Board of Weyburn Credit Union. She has sat on the Board for the past three years. ♦ Directors provided a brief response acknowledging the guidance of WCU management, staff, and fellow Board members.

OTHER BUSINESS

President Ziegler asked the membership if there was any further business arising from the meeting. There was none.

Weyburn Credit Union’s Executive Assistant, Kim Klassen, said grace prior to lunch.

All monies collected for the luncheon were matched by Weyburn Credit Union and donated to the Weyburn Humane Society. The amount collected was $103.

Meeting adjourned at 8:25 p.m.

20 Management Discussion and Analysis

The Management Discussion & Analysis (MD&A) is presented to enable readers to assess material changes in the financial condition and operating results of Weyburn Credit Union (the Credit Union) for the year ended December 31, 2014 compared with prior years. This MD&A is prepared in conjunction with the Condensed Summarized Financial Statements for the year ended December 31, 2014 and should be read together. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have been primarily derived from the Credit Union’s annual Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS).

This MD&A may contain future-looking statements concerning Weyburn Credit Union’s future strategies. These statements involve uncertainties in relation to prevailing economic, legislative, and regulatory conditions at the time of writing. Therefore, actual results may differ from the future-looking statements contained in this discussion.

Corporate Profile

Weyburn Credit Union is an independent Saskatchewan credit union owned by its members. The Credit Union’s head office is located in Weyburn, Saskatchewan. The Credit Union has assets under administration of over $671 million.

Under the current credit union legislation, Weyburn Credit Union is able to provide financial services to members and non-members. As at December 31, 2014, Weyburn Credit Union had 7,799 members and 1,039 non-members. Non-members do not participate in the democratic processes of the Credit Union nor the patronage program.

The Credit Union serves the communities of Weyburn, Lang, Yellow Grass, and surrounding areas through these three branches. In these communities we provide a full range of financial services including retail and commercial deposit services, consumer/agricultural/commercial lending, wealth management services, card products, electronic, mobile banking, etc.

The Credit Union is regulated by The Credit Union Act, 1998 and The Credit Union Regulations, 1999. The Credit Union must comply with the Credit Union Deposit Guarantee Corporation’s (CUDGC) Standards of Sound Business Practices and with Credit Union articles, bylaws, and policies. Other provincial and federal regulations and common law create additional legal rights and obligations.

21 Organization-Wide Strategy

The vision of Weyburn Credit Union is to be the financial institution of choice. In order to achieve this vision last year, we focused on providing an extraordinary member service experience.

The following is what we worked on:

• Achieving an in-depth understanding of members’ problems, needs, and opportunities • Striving to provide the best total financial solution by delivering exactly what the member needs • Cultivating full service relationships with members, not just pursuing transactions • Developing member loyalty and long-term profitable relationships • Providing high quality products and exceptional service • Developing an engaged workforce that is competent, courteous, and concerned

The Credit Union uses a modified balanced scorecard approach to develop strategic plans and measure progress against the corporate strategy. The 2014 scorecard included the following strategic goals: Financially Strong, Member Growth and Community Support, Efficient Operations, and Best People.

Strategy development starts with defining the desired outcomes by examining Weyburn Credit Union’s vision, mission, values, and strategic position. These are used to develop the desired critical outcomes or the Credit Union’s four strategic goals. Then one-year corporate objectives, measures, and targets are established. These define how the Credit Union will measure achievement of the goals set out in our strategic plan.

22 Our 2014 strategic goals and intents were as follows:

Strategic Intents Strategic Goals (Desired State)

• Achieve or exceed profit targets Financially Strong • Grow capital levels to support growth, operations, and risks

• Prudently management growth Member Growth and • Provide an extraordinary member service experience Community Support • Be a strong support of community

• Comply with regulatory, compliance, and good governance requirements Efficient Operations • Improve operational consistency, efficiencies, and effectiveness

• Attract, retain, and develop high quality engaged Best People people who provide excellent service and leadership

23 Financial Performance Review

Asset Growth Weyburn Credit Union ended December 31, 2014 with on-book assets of $491 million compared to $445 million at the end of 2013, representing growth of 10.27%. Off- book assets under management through our Wealth Management Department at year end were $180 million as compared to $159 million at the end of last year, representing an increase of 12.86%. The Credit Union’s total assets under administration are approximately $671 million. This is a 10.90% increase from prior year results.

Loan Growth The Credit Union’s loan portfolio at December 31, 2014 was $352 million. Loans increased by $5.27 million or 1.50% in 2014. The majority of the growth was in commercial and agricultural lending. Local business confidence in our economy was strong and businesses expanded. The growth in agricultural mortgage lending in 2014 was also very strong. At December 31, 2014 loans represented 72% of total on-book assets. This is a decrease from 2013 which was 78%.

24 Deposit Growth The Credit Union’s liabilities consist mainly of member deposits from both personal and commercial members. At December 31, 2014 deposits were $450 million, up from the previous year’s balance of $407 million. This is an increase of 10.47%. These deposits are 100% guaranteed by the Credit Union Deposit Guarantee Corporation (CUDGC) which is the regulator of Saskatchewan credit unions.

In 2014, strong deposit growth was experienced in consumer and business chequing accounts. The strong local economy continued to provide for high levels of consumer and commercial cash flow. Consumers also increased their holdings in high interest savings accounts. With the prolonged low rate environment, consumers continue to look for a safe and short term places to invest and are not as interested in long term investments.

Credit Quality The overall credit quality of our loan portfolio remains very favorable. Delinquency greater than 90 days was 0.03% for 2014, up from 0.01% at the end of 2013. The quality of the loan portfolio remains high. In 2015 the Credit Union will take a more aggressive approach to consumer loan growth which may impact these results.

The Credit Union was holding one foreclosed property with a net book value of $70,619 at December 31, 2014. The Credit Union was not holding any repossessed property at year end.

25 Profitability Total interest revenue for 2014 was $16.8 million which is up $693,112 from 2013 due to an increase in loan revenue and investment revenue. The Credit Union experienced tremendous deposit growth in 2014 and less than moderate loan growth which increased our internal investment portfolio by over $29 million. Interest expense on member deposits increased to $5.1 million from $4.7 million in 2013.

Other income includes revenue from sources like commissions and charges, service fees, loan administration fees and fixed asset income. Other income in 2014 was $3.1 million up from $2.7 million in 2013.

Total operating expenses (non-interest expenses) include expenses such as general business, occupancy, organizational, personnel, and security. Operating expenses for 2014 increased $620,935 or 6.07% from 2013. All operating expenses have increased for 2014. The two largest dollar increases are in personnel ($345,511) and general business ($231,198).

Despite near historical low interest rates and increasing operating costs, the Credit Union experienced another profitable year. Total comprehensive income for the year was $3.41 million up from $2.42 million in 2013. For 2014, our return on assets (ROA) before patronage and income tax was 0.82% compared to 0.86% in 2013.

In 2014, the Credit Union’s provision for credit losses was ($30,964) as compared to $164,767 in 2013. In 2013 a provision was established for a commercial loan because of potential delinquency issues. However, this issue did not materialize and we were able to recover the original provision.

Capital Management One of the main measures of financial strength of any financial institution is its capital levels. The Credit Union’s capital consists of equity accounts and retained earnings. Each year the Credit Union retains a portion of its annual earnings in order to build capital. The regulator of Saskatchewan credit unions, Credit Union Deposit Guarantee Corporation (CUDGC), prescribes capital adequacy measures and minimum capital requirements. CUDGC made changes to these requirements in July 2013 and further changes will be effective January 1, 2016.

26 Credit Unions are required to use four measures to determine credit union capital adequacy. The measures include: common equity tier 1 capital to risk weighted assets, total tier 1 capital to risk weighted assets, total eligible capital to risk weighted assets, and a leverage ratio. The risk weighted assets to capital ratios measure the adequacy of the institution’s capital in relation to the risk of its balance sheet and off balance sheet holdings. The leverage ratio provides a measure of the quality of an institution’s capital and now includes certain off balance sheet exposures in the calculation.

CUDGC requires credit unions to maintain minimums for each of these ratios, but has strongly emphasized the need for credit unions to establish stricter-than-regulatory limits in policy, consistent with the notion of operating within a prudential model. CUDGC expects credit unions to set internal targets for each of these measures. This will help to ensure that Saskatchewan credit unions are able to weather unexpected events and remain financially strong. Credit unions with capital levels below these expected levels will be subject to increased regulatory monitoring by CUDGC.

The following table compares CUDGC regulatory standards to the Credit Union’s Board policy tolerances for 2014:

CUDGC RISK TOLERANCES TARGET LIMIT Minimum Maximum Leverage Ratio 5.00% 7.00% 14.00% 9.00% Common Equity Tier 1 RWC 7.00% 7.25% 16.00% 11.50% Total Tier 1 RWC 8.50% 8.75% 16.00% 11.50% Total Eligible RWC 10.50% 10.75% 16.00% 13.20%

One of the Credit Union’s strategic goals is to remain financially strong. Annually a capital plan is prepared and presented to the Board to ensure there is adequate capital to support regulatory compliance, operational needs, growth, and offset risks, including unexpected losses and prolonged periods of stress. The Credit Union’s long-term capital target is to have common equity tier 1 capital of at least 11.5%, total tier 1 capital of at least 11.5%, eligible capital to risk-weighted assets of at least 13.20%, and a leverage ratio of at least 9%.

The Credit Union relies on profitability to grow its capital. The majority of the Credit Union’s total capital is in retained earnings. Capital ratios are affected by balance sheet growth, risk-weighting of growth, and profitability. The Credit Union retains a portion of its annual earnings in order to satisfy its capital plans. Once these capital objectives are satisfied, additional earnings could be allocated to members through the Credit Union’s patronage program.

For the year ending December 31, 2014 common equity tier 1 capital and total tier 1 capital was 10.49%. Total eligible capital ended 2014 at 11.95%. The leverage ratio was 7.50%. The Credit Union was in compliance with all capital requirements at year-end. As mentioned previously, our capital adequacy assessment process continues to signal the need to grow our capital levels. In 2014, a temporary change was made to our Distribution of Profit Policy in order to direct more funds to capital and work towards reaching our capital targets.

27 Capital Adequacy 14%

13% Total Tier 1 12% Capital Total Eligible 11% Capital 10% Capital Target

9%

8% 2013 2014

Patronage The economic recession of 2008 resulted in significant changes to the way financial institutions classify capital and increased the amount of capital financial institutions are expected to hold. These changes have impacted our patronage program in the last number of years. Emerging regulations and capital expectations imposed on all banks and credit unions continue to drive the urgent need for financial institutions to build equity at an expedited rate.

In order to meet capital requirements, Weyburn Credit Union did not make a rebate and bonus payments for the 2014 fiscal year. This allowed us to build our capital to an even healthier level and work towards meeting our capital adequacy target.

We continue to support our members and the communities we serve through numerous corporate programs, sponsorships, events, and donations. We are committed to making a positive impact in the communities we serve and this will not change.

It is intended that this change to rebate and bonus payments is only temporary. Our patronage program is expected to resume once the Board determines it is once again prudent to do so.

Enterprise Risk Management

Each year Weyburn Credit Union spends significant resources measuring and assessing risks and ensuring we are adequately prepared to serve our communities now and in the future. This process is called 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 (CUDGC).

Risk management is a comprehensive, disciplined, and continuous process where risks and opportunities are identified, analyzed, and treated within approved risk tolerances and aligned with the risk appetite of the Credit Union.

As a financial institution, Weyburn Credit Union is exposed to many types of risk and potential opportunities. Risk represents the potential negative impact to the Credit

28 Union’s ability to achieve important goals. Risk can also cause harm to the Credit Union’s reputation and result in a financial loss. Opportunities represent the potential positive outcome from the achievement of these goals. We accept risk and opportunities as part of our normal operations. We use risk management and capital to manage the risks and opportunities we are exposed to daily.

Weyburn Credit Union has developed a risk appetite statement and an enterprise risk management framework. The risk appetite statement articulates the degree of risk Weyburn Credit Union is willing to accept in order to optimize the value to the organization and ultimately, our members. The risk appetite statement identifies the risk tolerances for the Credit Union to operate within based on the capacity the institution can endure. The risk management framework outlines the continual flow of ERM within the Credit Union. Risks and potential opportunities are identified based on the achievement of the corporate goals. The potential risk and opportunity areas identified for Weyburn Credit Union are listed below.

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.

Weyburn Credit Union has an annual strategic planning process that produces a strategic plan and a business plan. The Credit Union has extensive reporting processes to monitor performance relative to plans.

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 and expenses are adversely affected by changes in market conditions, such as interest rate or foreign exchange movement.

The Credit Union utilizes comprehensive management processes to manage market risk. We have specific policy that clearly defines our risk limits in this area. An Asset and Liability Committee has been established to regularly monitor and manage this risk. A third party resource is used by the Asset and Liability Committee to assist in static and dynamic modeling, income simulations, and derivative planning. The Asset and Liability Committee reports regularly to the Board of Directors.

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.

Weyburn Credit Union has developed a liquidity plan in addition to specific policies and regulatory limits that manage this risk. The Asset and Liability Committee and the Finance Department oversee liquidity risk exposure and management. The Credit Union seeks to maintain sufficient liquid resources to continually fund our balance sheet commitments and to ensure we can meet the cash requirements of our members. There is constant communication between different business units so

29 that inflows and outflows of funds can be properly managed. The Credit Union holds a portfolio of liquid assets and maintains a line of credit with SaskCentral.

Credit and Concentration Risk Credit risk is the risk of loss arising from a borrower or counterparty’s inability to meet its obligations. Credit risk comes mainly from our direct lending activities and participation loans (loans purchased, but not administered by the Credit Union) and to a lesser extent our holdings in our investment portfolio.

Credit risk management is managed through approved policies, procedures, standards, regulations, and controls.

Concentration risk is the risk posed to a financial institution by any single or group of exposures which have the potential to produce losses large enough to threaten the ability of the institution to continue operating as a going concern. In other words, it's the opposite of a diversified portfolio.

The Credit Union has established risk concentration limits that reflect our risk tolerances. Surplus liquidity is invested within our established policy limits and regulator approved investment criteria. The credit portfolio and lending practices are regularly reviewed and assessed by internal and external auditors. The results of these audits are communicated to the Board of Directors through the Audit and Risk Committee.

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.

Financial institutions must comply with many different compliance requirements. The Credit Union has implemented policies and processes to ensure compliance expectations are met. Regular internal and external compliance audits occur and the findings of these audits are reported to the Board of Directors through the Audit and Risk Committee.

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.

Weyburn Credit Union uses policies, procedures, controls, and monitoring to manage operational risk. The risk is mitigated through internal audit reviews, insurance, business continuity planning, and secure technology solutions.

30 31 32 33 34 35 36 37