annual report 2010 - quinte first package 2010...ron harrison, president and ... we continue to look...
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Agenda 57th Annual General Meeting
1. WELCOME Alex Shatford
2. REPORT ON REGISTRATION Kiersten Hutchinson
3. REMEMBRANCE OF DECEASED MEMBER/OWNERS Alex Shatford
4. APPROVAL OF AGENDA Alex Shatford
5. APPROVAL OF 2010 AGM MINUTES Alex Shatford
6. REPORT OF THE BOARD OF DIRECTORS Alex Shatford
7. REPORT OF THE NOMINATING COMMITTEE Bill Headon
8. BOARD ELECTIONS Bill Headon
9. REPORT OF THE CHIEF EXECUTIVE OFFICER Ron Harrison
10. REPORT OF THE LENDING SERVICES MANAGER Lori Hegadorn
11. REPORT OF THE SOCIAL RESPONSIBILITY COMMITTEE Jodi Whyte
12. REPORT OF THE CHIEF FINANCIAL OFFICER Carrie Clarke
13. REPORT OF THE AUDITOR Jeff Lay
14. REPORT OF THE AUDIT COMMITTEE David Clarke
15. APPOINTMENT OF AUDITOR David Clarke
16. BOARD & STAFF RECOGNITION Alex Shatford/Ron Harrison
17. ELECTION RESULTS Bill Headon
18. DRAWS Joe Aitchison
19. ADJOURNMENT Alex Shatford
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QuintEssential Credit Union Limited
Minutes of Annual General Meeting
March 23, 2010
The 56th Annual General Meeting of QuintEssential Credit Union Limited was held at the Bay of Quinte Country Club, Highway # 2 West, Belleville, Ontario on Tuesday March 23, 2010. The Chair, Joe Aitchison called the meeting to order at 7.00 pm The Registration Report was given and showed that 49 members and 2 guests were in attendance. Chair Joe Aitchison declared that there was a quorum and the meeting could proceed. Joe Aitchison welcomed all members and guests and thanked them for their interest and support of the Credit Union. Joe Aitchison asked all members to observe a moment of silence to honour those members who had passed away in 2009 Approval of Agenda:
Joe Aitchison asked for approval of the agenda as printed in the Document Package provided to each member in attendance.
Moved by Jodi Whyte and seconded by Bill Headon
All in favour Motion Carried
Previous Minutes from 2009 AGM:
Joe Aitchison asked for a motion to approve the Minutes of the 2009 AGM, held at the Bay of Quinte Country Club, March 24, 2008
Moved by Leona Risto and seconded by Attila Kostya
All in favour Motion Carried
Board of Directors Report:
Joe Aitchison, chair of the Board of Directors presented his report. Joe commented on the positive financial results for the year resulting in the strong financial position for the credit union. He also noted that the Board had decided that rather than pay a dividend to the members the credit union will pay the cost of the Central 1 membership dues. See complete report on page 11 of the 2009 Annual Report.
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Nominating Committee Report:
David Clarke presented the nominating committee report. Dave indicated there were 5 positions available and that we had 3 nominations. Positions open were: 3 for 3 years, 1 for 2 years and 1 for 1 year. Nominees are: Kiersten Hutchinson, Keith Lumley, and Alex Shatford. As we had 3 applicants for 5 positions, all applicants were declared elected by acclamation. The two remaining board vacancies will be filled by board appointment at a later date. See complete report on page 12 of the 2009 Annual Report.
Report of the President and CEO:
Ron Harrison, President and CEO presented his report and highlighted our current strong reserve position. Ron commented that Jim Coolen is now available to provide free financial planning for credit union members and we now have Bob Berry on staff as a small business & commercial lending specialist. Solar panels were installed on the Sidney Street location and went into service in February 2010. See complete report on page 13 of the 2009 Annual Report.
Report from Lending Services Manager:
Lori Hegadorn, Lending Services Manager, presented her report and highlighted several items. Lori reported on the continuing decline in personal loan requests. However, with low mortgage rates demand is growing for mortgage loans. See complete report on page 14 of the 2009 Annual Report.
Report of Social Responsibility Committee:
Jodi Whyte presented her report to the membership. Jodi highlighted the activities of the Social Responsibility committee and their work during 2009. Jodi thanked Susan White for her past work on the committee. On page 16 of the annual report is a list of all of the various community projects that are associated with the Social Responsibility Committee. See complete report on page 15 of the 2009 Annual Report.
Report from the Chief Financial Officer:
Carrie Clarke, Chief Financial Officer, reviewed the financial results for 2009. Her review included the Balance Sheet and Statement of Earnings for 2009. The credit union performed well above average considering the economic factors during 2009. See Balance Sheet on page 17 and the Statement of Earnings on page 18 of the 2009 Annual Report.
Motion to accept Committee reports:
Joe Aitchison asked for a motion to accept, the Report of the Board of Directors, the Report of the Nominating Committee, the Report of the Chief Executive Officer, the Report of the Lending Services Manager, the Report of the Social Responsibility Committee and the Report of the Chief Financial Officer.
Moved by Tom Gavin and seconded by Douglas Beatty.
All in favour Motion Carried
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Report from the External Auditor:
Jeff Lay, our external auditor representing Wilkinson and Company LLP, highlighted several items on their report. Our external Auditor is pleased with the growth and overall operation of the Credit Union and explained why the credit union was successful in 2009. See complete report in the 2009 Document handout.
Motion to accept the Auditors report was moved by Attila Kostya and seconded by David Clarke.
All in favour Motion Carried
Report of the Audit Committee:
Erika Fraser presented the Audit Committee Report and highlighted the activities of this committee during the 2009 year. The committee reviewed all external and internal audit documents and is pleased to report that all proposed recommendations to the board were implemented, or are currently in the process of implementation. See complete report on page 19 of the Annual Report.
Motion to accept the Audit Committee report was moved by Bill Headon and seconded by Susan White.
All in favour Motion Carried
Appointment of Auditors:
Erika Fraser reported that the Board of Directors approved and recommended the firm of Wilkinson and Company LLP be retained as External Auditor for 2010.
Motion to retain Wilkinson and Company LLP as External Auditor for 2010 moved by Erika Fraser and seconded by Jodi Whyte.
All in favour Motion Carried
Recognition of Directors and Staff:
Director recognition by Joe Atchison
• Susan White was recognized for her 6 years of service as a Director • Erika Fraser was recognized for her 16 years of service as a Director • Alex Shatford was presented with a lapel pin and certificate for completion of the Credit
Union Director Achievement Program Staff Recognition by Ron Harrison
• Margaret Chabassol for 5 years of service • Alana Maracle for 15 years of service • Leona Risto for 20 years of service
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New Business:
Bylaw Amendments:
Motion to adopt the new Credit Union’s By‐laws to comply with changes in the Credit Union and Caisse Populaires Act 1994 that were proclaimed October 1, 2009 moved by Doug Beatty and seconded by Leona Risto.
All in favour Motion Carried
Door prizes:
Alex Shatford conducted the draw for the many door prizes. Prizes were provided by Concentra Financial, CUETS MasterCard, CUMIS Creditor’s Life & Disability, CUMIS Home & Auto, Open Solutions Banking System, Stanley Security System, D & H Cheque Printing, Matrix IT and Peter Spanyi.
Open Time:
Joe Aitchison declared that all business was concluded and thanked all members for attending this meeting. Joe invited all attendees to visit with the staff and directors and to enjoy the refreshments provided.
Adjournment:
Motion by Debbie Baldasaro to adjourn the meeting was made at 8:00 pm.
All in favour Motion Carried _________________________ _____________________ Board Chair Secretary Recorder: Alex Shatford
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REPORT OF THE BOARD OF DIRECTORS
It is my pleasure to present the 2010 Annual Report to the membership on behalf of the Board of Directors. This past year has been very challenging for QuintEssential Credit Union as our member/owners struggled to recover from the faltering economy and to continue to move forward with their financial goals. The other challenge member/owners and staff alike had to wrestle with was the data conversion. The cancellation of the first proposed date, of April 30th, was a situation beyond the control of both management and staff. The next available date, September 30th, allowed for additional training and preparation which lead to a very successful conversion. Conversions are never an easy process and the Board congratulates member/owners, staff and management for a job well done.
Another challenge the board had to deal with in 2010 was not having a full slate of directors. We continue to look for qualified individuals and hope to have our numbers up to par following the Annual General Meeting. On a positive note, we did generate a profit in 2010 and we are continuing to reduce membership shares to reach the level of $20. Capital Reserves remain well above regulatory requirements ensuring that we sustain a strong, viable Credit Union. Our financial results are particularly gratifying this year as it reinforced the principle that “people helping people” through financial partnerships was the best way to achieve success for us all. In July the credit union’s operations received a good rating from our deposit insurer, the Deposit Insurance Corporation of Ontario (DICO) following the completion of an On Site Verification (OSV) inspection which examined every facet of our operations. In August Central Risk & Insurance Management Services (CRIMS) conducted a review of the credit union’s operations which also generated a good report on the credit union’s operations. Board and management held our annual planning session to prepare for 2011 and beyond. We also used the time to update our Enterprise Risk Management (ERM) templates and thus ensure we are meeting all regulatory requirements. I am pleased to say QuintEssential is a leader amongst our peers when it comes to the implementation of ERM. The first half of 2011 will be used to streamline the use of our new data system with the latter half being used to expand our service delivery channels for our member/owners. I would like to extend a thank you to our member/owners for your continued support and to our dedicated Board, Management and Staff, for their hard work and committed service. Sincerely, Alex Shatford, Chair
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REPORT OF THE NOMINATING COMMITTEE
There were 5 director positions available in 2010. David Clarke, Eric Hovinga and Jodi Whyte’s term of office have expired. Keith Lumley resigned as of March 21, 2011, for personal reasons, after serving on the board since November 2009. One position remained vacant in 2010. The term lengths of the positions available are as follows: three of the positions are for 3 years, one for 2 years and one for 1 year. The by‐laws of the Credit Union permit that any member/owner in good standing may stand for election to the Board of Directors subject to restrictions imposed by the Credit Unions and Caisse Populaires Act and the by‐laws of the credit union. The credit union by‐laws further require that member/owners who wish to be considered as candidates for election must submit a written application to be received by the Nominating Committee 30 days prior to the Annual General Meeting. Nominations from the floor will not be accepted. The Notice of Elections was posted at both offices 60 days prior to the AGM in accordance with QCU by‐law 7.12. The notice was also posted on the QuintEssential website and on the member/owner statements. Board information packages for candidates were available at both offices and on our web site. Six member/owners submitted completed packages. The applications were reviewed by the Nominating Committee and have satisfied the requirements under the Credit Unions and Caisse Populaires Act and the by‐laws of the credit union. The candidates are as follows: David Clarke Jeffrey Clarke Diane Hadley Eric Hovinga Keith Jennings Jodi Whyte Bill Headon Chair of the Nominating Committee
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REPORT OF THE CHIEF EXECUTIVE OFFICER
Financial Results: Total membership is 8,426 with Belleville branch at 6,079 and Trenton branch at 2,347. Assets grew $1.56 million to $84.1 million with deposits increasing by $1.22 million and loans increasing by $1.39 million. In addition, we also provide our member/owners financial services supplied by our co‐operative partners. As of year end, we have “off book” assets totaling $12.9 million comprised of mortgages, deposits and mutual funds. Net income was $483,242 which was invested in our retained earnings. Retained earnings and share capital as percentage of assets are now at 9.08%. With the mandatory minimum regulatory capital set at 4.00 %, your credit union is in a very strong financial position to meet our member/owners’ needs and the economic challenges that may be in our future. People: That’s what the credit union is all about. Based on our member/owners’ loyalty and continued support, fostered by our employee’s dedication to provide excellent service and with the board’s guidance to plan for the future, we will continually make changes to build a stronger organization to meet the needs of our member/owners and our community. In 2010, we have completed the following initiatives:
• Banking and electronic switching conversion • Member/owners received $20 refund on their shares and we waived the $5.00 annual
dues levy for a total of over $137,000 benefit to our member/owners. • In partnership with The CUMIS Group, we continue to offer our member/owners
preferred pricing for their home and auto insurance. Over 120 member/owners are enjoying this coverage currently
What’s Ahead? In 2011, we are planning the following:
• Our Member Cards and our ATM’s will have the chip card technology and we will launch a new log in process to our internet banking resulting in increased security
• eTransfer, also known as email money transfer, will be launched I would like to thank the member/owners for their continued support. Thank you to our management team comprising of Carrie Clarke – Chief Financial Officer, Lori Hegadorn ‐ Lending Services Manager, Jan Heffernan – Member investment Manager and Teresa MacIntyre – Branch Manager – Trenton, the staff and Board of Directors for their efforts and commitment in serving our member/owners and our communities. Respectfully submitted Ron Harrison, President & CEO
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REPORT OF THE LENDING SERVICES MANAGER
Throughout 2010 we continued to see a decline in our personal loan demand, while the mortgage, line of credit, and commercial products continued to be utilized by our member/owners. The record low mortgage rates over the past year kept mortgage products very popular and an affordable financing option. Whether purchasing your first home, or increasing your existing mortgage for home improvements, the credit union has a variety of options to choose from depending on our member/owners’ needs and circumstances. We are excited to be launching a new credit product this year called CreditMaster. This product will allow our member/owners great flexibility when it comes to their mortgage/lending needs. With the continued volatility in the U.S. housing market, we experienced more restrictive mortgage guidelines again in our own mortgage industry on this side of the border with the reduction of refinancing option from 95% just a year ago to 85% today. The minimum 5% down payment for home purchasers is still available, and the maximum mortgage amortizations have been reduced from 35 years to 30 years. A recap of our lending activity over the past year is as follows:
Loans Approved # $ Commercial Loans 15 1,485,947Residential Mortgage Loans 98 10,592,796Personal Loans 565 7,131,790Bridge Loans 2 128,600
Total applications received for consumer/commercial credit for 2010 were 870. Total declined applications for consumer/commercial credit for 2010 were 190. During 2010 our affiliate The CUMIS Group paid out $266,108 in life, disability, and mortgage insurance claims to support our member/owners and their families through difficult times such as loss of employment, accidents, critical illnesses and death. Written Off Loans Total for Belleville/Trenton branches consolidated: $85,649 Respectfully Submitted Lori Hegadorn Lending Services Manager
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REPORT OF SOCIAL RESPONSIBILITY COMMITTEE
Last year, we initiated a program to encourage staff to participate in community initiatives. SRC will donate a total of $1,000 to the organizations chosen by its three volunteers with the highest number of volunteer hours. The recipients will be announced at this AGM. The Committee continued to contribute to a number of organizations and projects in the community. In keeping with our mandate we concentrated on community, education and the environment. Donations were made to BGH Foundation, Habitat for Humanity, and a number of special projects sponsored by our local schools. We also approved $3000.00 in funding to Gleaners Food Bank for their patio garden project. The funds QCU provided were used to purchase the raw items necessary to develop patio gardens in our community for families in need. The Breakfast Club continued until the end of the school year in 2010 and recommenced in the fall of 2010. Unfortunately, due to the number of volunteers we were only able to participate in providing breakfast two days a week at Prince Charles School. Nevertheless, this is time spent that the volunteers truly enjoy. In addition, board, staff and member/owners participated by collecting bags of trash at the region’s annual Trash Bash and volunteered at a checkpoint for the Junior Diabetes Research Foundation. The Quintessential Clowns participated in the Canadian Cancer Society’s Relay for Life and raised a total of $24,700 making them the top corporate team. They have raised over $100,000.00 in the last five years. In 2010 your SRC selected two recipients to share the $2,500 QuintEssential Credit Union Ron Koppmann Memorial Bursary. In addition, 5 students received $1000 bursary each to assist with their education. Please consult our website and encourage member/owners, their children or grandchildren, who are entering or already in a post‐secondary program to apply. Since 2006, QCU has donated almost $40,000 in educational bursaries to our youth community. Since 2006, QuintEssential Credit Union has donated over $150,000. Applying for a donation is a simple process, explained on our website. We review requests twice a year, at the end of March and September. We encourage you, our member/owners, to join us. If you would like to volunteer as part of the QCU team, please email Ron Harrison at [email protected]. Jodi Whyte, Social Responsibility Committee Chair,
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2010 Y/E Community Involvement Disbursements
Quinte Bay Gymnastics $ 1,000 Quinte Bay Gymnastics $ 1,000 QuintEssential Clowns – Canadian Cancer Relay for Life $ 5,000 Gleaners Food Bank – Patio Garden Project $ 3,000 Quinte Children’s Water Festival $ 500 Breadner Elementary School – Trenton $ 500 Sir John A. MacDonald Public School – Library Project $ 500 Habitat for Humanity $ 2,000 Junior Diabetes Research Foundation – Belleville Walk $ 350 Post Secondary Bursary Awards $ 5,000 Belleville General Hospital Foundation $ 500 Ron Koppmann Memorial Bursary Award (Loyalist College) $ 2,121 Gleaners Food Bank $ 1,000 Ontario Credit Union Charitable Foundation $ 832 Total $ 22,303
Disbursements made by Ontario Credit Union Charitable Foundation to local recipients: QuintEssential Clowns – Canadian Cancer Relay for Life $ 5,000Gleaners Food Bank $ 1,000 Grand Total $ 28,303
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QuintEssential Credit Union Limited Balance Sheet - December 31, 2010
2010 2009 $ $
ASSETS
Cash and Short Term Deposits 5,984,940 6,651,743
Loans to Members 67,376,511 65,987,948
Property, Plant & Equipment 3,437,201 2,898,091
Other Assets and Investments 7,347,266 7,037,266
Future Income Tax Asset - 9,100 84,145,918 82,584,148
LIABILITIES Demand Deposits 36,768,494 35,456,310
Registered Savings Plans held in trust 12,210,086 12,519,341
Term Deposits 19,903,389 19,443,219
Registered Income Funds held in trust 6,837,400 7,044,444
75,719,369 74,463,314
Accounts Payable and Accrued Liabilities 938,247 1,036,174
Future Income Tax Liability 63,000 -
LIABILITIES QUALIFYING AS REGULATORY CAPITAL
Share Capital 683,737 826,340
Member's Equity
Retained Earnings 6,741,565 6,258,320
84,145,918 82,584,148
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QuintEssential Credit Union Limited Statement of Earnings - December 31, 2010
2010 2009 $ $ REVENUE Interest on Loans 4,011,217 3,926,597Investment Income 115,856 180,225 4,127,073 4,106,822 INTEREST EXPENSES Demand Deposits 200,930 220,248Term Deposits 598,298 741,736Registered Income Funds 158,965 183,213Registered Savings Plans 304,117 367,535 1,262,310 1,512,732GROSS FINANCIAL MARGIN 2,864,763 2,594,090OTHER INCOME 1,274,226 1,229,379 EXPENSES Administrative 1,599,656 1,296,626Amortization of property, plant and equipment 262,944 259,644Bad debts 84,647 64,891Deposit Insurance Corporations of Ontario 60,039 64,025Salaries and employee benefits 1,612,347 1,566,007 3,619,633 3,251,193EARNINGS FROM OPERATIONS 519,356 572,276 OTHER EXPENSES Write-down of ABCP LP (67,570) (51,468) (67,570) (51,468) EARNINGS BEFORE INCOME TAXES 586,926 623,744 INCOME TAX EXPENSE Current 31,581 134,934Future 72,100 3,400 103,681 138,334NET EARNINGS FOR YEAR 483,245 485,410
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REPORT OF THE AUDIT COMMITTEE
Audit Committee Members: David Clarke, Chair; Kiersten Hutchinson, Secretary; Joe Aitchison, Member. The Audit Committee is a Committee of the Board of Directors and is formed in accordance with the Credit Union and Caisse Populaires Act. The Audit Committee confirms that it is conducting its affairs in accordance with the Act and the regulations. During 2010, the Committee met 6 times. The Committee arranged its agenda to ensure all required responsibilities were completed in a timely manner. One of many duties of the Audit Committee is to review Credit Union Policies. Due to legislative changes to the Credit Union Act, these reviews required more extensive changes than normally would occur. The Committee also reviewed and updated many of the Human Resources policies. The Committee met with the External Auditor as well as the Internal Auditor. In the case of the latter, we appointed Wilkinson and Company, LLP as the new Internal Auditor. The Committee reviewed their reports and was responsible for reviewing and approving the appropriate replies. Based on its findings, the Committee issued reports and makes recommendations to the Board. All recommendations made by the Committee have either been implemented or are in the process of being implemented. In addition, the Audit Committee continues the ongoing process of Enterprise Risk Management that was initiated in 2008. Effective ERM is critical to the credit union’s ability to remain strong and profitable. The Committee wishes to report to the membership that, in its opinion, the current financial position of QuintEssential Credit Union is very strong. This is a reflection of the professionalism & dedication of our management & staff and the responsible manner in which it has conducted the affairs of your Credit Union. We wish to thank senior management for their assistance and expert guidance as we completed our duties. Respectfully submitted on behalf of the Audit Committee, David Clarke, Chair
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Board of Directors
DIRECTOR TERM EXPIRY
2011
David Clarke Eric Hovinga Jodi Whyte
2012 Joseph Aitchison
Bill Headon Vacant
2013 Kiersten Hutchison
Alex Shatford Vacant
Staff (as of December 31, 2010)
Under Five Years Service Brittany Bailey Robert Berry Bonnie Boyd Shelley Chaput Carrie Clarke Christine Colangelo Jeff Flower Michele Gavin Laurie Golden Tim Hiuser Kim Lee Crystal Magee Jessica Ogden Meagan Reid*
Five Years of Service Debbie Armstrong Margaret Chabassol Ron Harrison* Kim Johnson Linda Normand Tammy Uens‐McCambridge Ten Years of Service Cindy Grills Teresa MacIntyre* Barb MaGee* Fifteen Years of Service Alana Delong
Twenty Years of Service Angela Dominie Lovon Telford Leona Risto Twenty Five Years of Service Valerie Hamilton Lori Hegadorn* Thirty Years of Service Jan Heffernan
* New to this service level
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