Financial Highlights

2022 marked the first year of Affinity’s 3-year Hitting our Stride strategic plan. This plan continues to leverage our member-owned financial co-operative values to position Affinity as a competitive and sustainable differentiator within the financial services sector. The strategies outlined in the plan informed the 2022 annual plan objectives supported by a refreshed capital plan.

Our capital plan emphasized the need for strong financial performance to maintain capital strength and build resilience to weather the uncertainty in the economy resulting from rising interest rates and the inflationary environment.

Focused on sound financial advice to members through highly proficient Advisory team members, complemented with market competitive rates for both loans and deposits, we were well positioned to provide value directly to members in 2022.

At the system level, the sale of Concentra Bank to Equitable Bank resulted in a capital injection for Affinity due to the credit union’s share ownership in Concentra Bank through SaskCentral. This was paid out as a dividend which had a one-time impact on our financial results. Hence, some of the explanations and results that follow will be expressed as total and normalized amounts. The normalized amounts exclude the impact of the Concentra-related dividend and therefore offer comparative results to previous years.

The credit union achieved a $427 million (or 6.2%) growth in assets for 2022 reporting on book assets of $7.23 billion and total managed assets of $8.98 billion. This level of growth supports Affinity’s ability to grow its membership base and market share while maintaining a strong capital position.

At the end of 2022, Affinity was the largest credit union in Saskatchewan based on asset size, and 10th largest credit union in Canada as of December 31, 2022.

Affinity achieved a 16.9% overall Return on Equity (ROE) in 2022 resulting in an increasing ROE in each of the past three years. The 2022 normalized ROE of 7.6% was lower than 2021 but above 2020 results. 2021 included one-time gains from venture capital investments and recoveries from provisions for credit losses that contributed to a 10.4% ROE.

Return on Member Equity

Reported after tax net income for the credit union was comprised of the consolidated results from its wholly owned subsidiary operations including wealth and insurance as well as the Concentra-related dividend. Consolidated net income after tax was $119.5 million or $51.2 million normalized. This level of earnings provided capital strength to support a member focused strategy.

Efficiency ratio is a measure used to assess the effectiveness of a financial institution’s ability to employ its resources, such as its assets and capital, to generate income. It shows how much is being spent on operating expenses relative to the revenue generated. Affinity achieved a strong efficiency ratio of 48.9% overall (65.4% normalized). The increase in this ratio on a normalized basis is attributed to one-time items in 2021 (gains from venture capital investments and recoveries from provisions for credit losses) as well as the impact of inflationary pressure on operating costs and margin compression pressures resulting from deposits repricing sooner than loans due to rising interest rates.

With well managed growth and strong earnings, Affinity continued to build the capital required to support strategic objectives, strengthened its capacity to withstand economic downturns or extraordinary events, and empowered the credit union to pursue opportunities focused on value for members.

Affinity continued its upward year over year trajectory in enhancing its capital position, finishing the year achieving 16.7% or 15.6% normalized total capital to risk weighted assets ratio.