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2 1 2 0 1 2 0 1 2 0 2012 ANNUAL REPORT

A Year in Review


CONTENTS

MISSION STATEMENT We are a financial cooperative committed to providing programs and services which enhance the economic and social well

President’s Report........................................... 2

being of our members and our community. Board of Directors.. ......................................... 5

VISION STATEMENT

Chief Executive Officer’s Report..................... 6

To be a leading, community focused, cooperative financial institution.

Management.................................................. 9 Patronage Rebate.......................................... 10

CORE VALUES • Trust

Staff.. ............................................................ 12

• Service Excellence • Community

Part of Our Community. . .............................. 14

• Collaborative Relationships

Cape Breton Cares Radiothon.................. 14

• CSR and Sustainability

Fat Cat School Program .......................... 14

• Cooperative Principles

Sydney Credit Union Kidspree . . .............. 15

Sydney Credit Union’s commitment to Cooperative Social Responsibility defines its recognition of stakeholders, while in the pursuit of sustainable solutions, that involve and balance the interests of our organization, our members, our staff, our community, our cooperative sector and our environment.

The Right Direction for Autism............... 16

2012 ANNUAL REPORT

CSR VALUE STATEMENT

Walk the Walk: Stepping In Christmas Parade .. .................................. 16 Sydney Credit Union’s Breakfast For Learning Golf Tournament ............... 17 Island Skatepark Clean Up. . ..................... 18 CBU Frosh Week. . .................................... 18 Share, Support and Recovery .................. 19 IYC Flag Raising Ceremony .................... 20 High School Outreach ............................ 21 Atlantic Business Ethics Award .................... 22 Sydney Credit Union Charitable Foundation. . ................................................. 24 Applied Wealth Strategies............................. 25 Independent Auditors’ Report . . ..................... 26 Statement of Financial Position............... 27 Statement of Comprehensive Income...... 28 Statement of Changes in Members’ Equity..................................... 29 Statement of Cash Flows......................... 30 Schedule of Expenses . . ............................. 31 Printed on 100% post-consumer product.


78th ANNUAL MEETING April 24, 2013 AGENDA • Registration • Call to order – establish quorum • Period of silence in honour of deceased members • Welcome visiting dignitaries • Approval of agenda • Approval of annual meeting minutes of April 25, 2012 • Business arising from the minutes • Report of the Board of Directors • Report of the Nominating Committee • Report of the Auditors • Report of the Chief Executive Officer • New business: • Appointment of Auditors for 2013 • Special Guest – Mr. Bernie O’Neil, former CEO of Atlantic Central • Drawing for door prizes • Adjournment • Refreshments

1


PRESIDENT’S REPORT On behalf of the Board of Directors of Sydney Credit Union, I am pleased to report on the activities of your credit union for 2012. As Chair of the Board, I am happy to report that we enjoyed another very good year in terms of overall growth in business. We strengthened our balance sheet and our relationships with members, the community, and the cooperative

direction in order to enjoy the full benefit of

family, in spite of 2012 being another year of

these strategies.

numerous local, regional and global economic challenges.

Your Board is responsible for practicing strong

2012 ANNUAL REPORT

corporate governance while ensuring that the Your Board continues to be very active by

Board and senior management comply with

contributing to the strategic direction of Sydney

legislative and fiduciary obligations and exercise

Credit Union, while ensuring a conservative

the leadership required by our organization. We

level of risk is maintained. Your Board

strongly believe the strength of our governance

supervises management’s execution of the

practices is a key factor in the success of Sydney

strategy and ensures metrics are in place to

Credit Union. These strong governance

effectively measure performance of the credit

processes direct the Board and Management

union. With that in mind, the Board has spent

in fulfilling their obligations to you, the

the last three years on an aggressive strategic

membership.

plan that focused on five main themes: The mandate of the recently established Sydney 1) Strengthening and advancing our approaches in the areas of member relations; 2) Advancing strategies to help us become a leading sustainable organization; 3) Strengthening our human resource training and development systems; 4) Attracting and retaining youth and strengthening those youth relationships; and 5) Solidifying the effective use of IT services.

Credit Union Charitable Foundation is to support initiatives that enhance the quality of life through the advancement of community health, financial literacy and environmental protection. Through our Foundation, we are pleased to have made a strong commitment to the community this past year. In September 2012, the Cape Breton District Health Authority partnered with New Dawn Enterprises and our Foundation to create a new community

In October 2012, your Board met for the

organization. This organization, temporarily

purposes of updating the three-year strategic

called Share, Support and Recovery, was created

plan. At that meeting it was decided to extend

to provide an integrated and coordinated range

the strategic plan for one additional year. Many

of services and support to address the multiple

great things were accomplished in the three

needs of individuals with mental health and

years and it was decided to continue in the same

social challenges.

2


2 1 2 0 1 2 0 1 2 0 The partnership includes a $250,000

Building, Cooperative Social Responsibility,

commitment from the Sydney Credit Union

Credit, CEO Performance Management and a

Charitable Foundation, along with a $20,000

new Governance committee. There were thirty-

commitment and $30,000 of in-kind services

nine various committee meetings throughout

from New Dawn Enterprises. Also, as financial

2012. Other Directors, in their capacity as

literacy is considered to be a key component

voting delegates, have attended four District

in the management of the daily lives of those

meetings, and two Atlantic Central meetings in

living with mental health disorders and

Atlantic Canada. Your Chair, who also attends

addictions, we are pleased to offer our expertise

other meetings, was present at two additional

in financial literacy to those individuals

meetings out of town in 2012.

involved in the program.

We strongly believe the strength of our governance practices is a key factor in the success of Sydney Credit Union.

The purpose of the partnership and new community organization is to develop

opportunities for independence, education,

housing, employment and social engagement for this group of vulnerable individuals in

From an educational perspective, your current

Cape Breton. It makes perfect sense that these

Board of Directors have taken 189 credit union

three organizations, who all share similar

related courses and attended 72 educational

visions for our community, and similar views

webinars in addition to the meetings they

of how to effect change, should come together

have attended. You can see, a great deal of

in partnership, to create something new and

personal time and effort has been committed

unique for the betterment of our community.

by your Directors and I thank them for that commitment.

Sydney Credit Union’s Board of Directors have been very active over the past year, meeting

Your management team and staff are focused

eight times to conduct regular business and once

on serving the membership and running the

to conduct special business. One membership

day-to-day operations. Your Board of Directors

meeting was held during the year to conduct the

acts as stewards for you, the membership, in

annual meeting for 2011. In addition to these

setting the strategic plans and ensuring the co-

meetings, the Directors sat on various other

operative principles are maintained. We expect

committees such as Executive, Audit, Policy,

the current economic climate to continue for

2012

2011

2010

2009

2008

2007

2006

2005

2012

2011

2010

2009

2008

2007

2006

2005

0

2004

0

2003

0

2002

100,000

2012

3.75

2011

0.3

2010

200,000

2009

7.50

2008

0.6

2007

300,000

2006

11.25

2005

0.9

2004

400,000

2003

15.00

2002

1.2

2004

PATRONAGE REBATE 2002-2012 ($)

2003

EQUITY 2002-2012 ($ Millions)

2002

SURPLUS 2002-2012 ($ Millions)

3


at least another year. For Sydney Credit Union,

and guidance for the benefit of the Board in its

that may translate into slower growth, lower

decision-making. He often asked the pertinent

returns and more national regulatory restrictions

questions that assisted the processes of the

being put in place, similar to the changes in

Board’s work.

the mortgage market last year. With our strong equity position and our proven track record,

Jim MacLean has completed nine years on the

we are confident we have the resources, both

Board. He has served on various committees

monetary and human, to weather the storm

throughout this time and was Secretary on the

of economic uncertainty that all financial

Executive Committee over the past year. Jim

institutions find themselves in today.

has told us many “true” stories over the years and through his sense of humor has lightened

We are proud of the accomplishments of our

the mood of many of the Board gatherings.

credit union and the commitment of our Board,

Jim’s wealth of knowledge and experience has

management and staff. It is evident from their

been a tremendous asset to the Board.

teamwork, leadership and confidence, that they believe in the co-operative values of self-help,

Lawrence MacDonald is also completing nine

self-responsibility, democracy, equality, equity

years, three of which were as Chair of the

and solidarity.

Board. His organizational skills, writing skills

2012 ANNUAL REPORT

and attention to detail have been noteworthy. I am very proud to report that during the 2012

Lawrence has spent a tremendous amount

year Sydney Credit Union was awarded the

of time becoming knowledgeable of Board

prestigious 2012 Atlantic Business Ethics Award

procedures, protocols and governance issues,

in the 16-50 employee category. The award is

and has left behind several written guidelines

granted by the Better Business Bureau of the

for future reference. He has also been the

Atlantic Provinces in recognition of businesses

driving force behind District One meetings this

that go beyond the average in maintaining high

past year. To me especially, Lawrence has been

standards of ethical behavior. Businesses are

helpful as a mentor and a source of information

evaluated in the areas of responsibility, ethical

and inspiration.

decision making, ethical initiatives, ethical leadership and environmental sustainability.

Finally, I would simply like to state on behalf of

We interpret this as an accreditation to the

the Board, gentlemen, you will be missed.

excellent work we do with our members, our stakeholders and the community we serve.

In closing, on behalf of the Board of Directors, I would like to recognize management, staff and

I would like to take this opportunity to

of course, you the members, for your continued

acknowledge three Board members who are

commitment and support throughout these

completing their involvement with the Board of

current economic times.

Directors of Sydney Credit Union. Respectfully submitted, John MacEachern is completing twelve years of service, three of which were as Chair of the Board. Over the past twelve years John has proven to be an inspiration and a true leader who has freely shared his time, knowledge

Doreen Burke, Chair

2


2 1 2 0 1 2 0 1 2 0 BOARD OF DIRECTORS

Top Row: (From left to right) Doreen Burke, Chair Joe Legge, Vice Chair Jim MacLean, Secretary John MacEachern Middle Row: (From left to right) Lawrence MacDonald

Donna Arseneau Dan MacDonald

Bottom Row: (From left to right) Blaise MacLean Hugh MacKinnon

Jeanette Thompson

Board of Directors - Directors’ Attendance Report DIRECTOR

BOARD EXECUTIVE AUDIT

BUILDING

CREDIT

CSR

GOVERNANCE

1/1

3/4

6/7

1/1

1/2

1/1

3/3

Doreen Burke

8/8

10/10

Joe Legge

8/8

10/10

Jim MacLean

8/8

6/6

John MacEachern

8/8

Lawrence MacDonald

8/8

Donna Arseneau

8/8

4/4

1/1

Dan MacDonald

8/8

2/4

1/1

Blaise MacLean

8/8

1/1

1/1

Hugh MacKinnon

8/8

4/4

Jeanette Thompson

7/8

4/4

4/4

NOMINATING POLICY

1/1

0/1

3/4

3/4

0/1

7/7

1/1

5/7

1/1

1/1

3/3

0/1 1/3

2/3

1/3

3/4 4/4

3/4

2/4

5/7

1/1

As of May 22, 2012 Lawrence MacDonald placed on Audit Committee, John MacEachern removed from Building Committee Jim MacLean placed on Executive Committee, Hugh MacKinnon removed from CSR Committee Blaise MacLean removed from Audit Committee, Lawrence MacDonald and Dan MacDonald placed on CSR Committee Lawrence MacDonald, Jim MacLean, John MacEachern and Jeanette Thompson placed on Governance Committee

3/3

5


CHIEF EXECUTIVE OFFICER’S REPORT The economy was once again front and centre in 2012 and, it was inevitable

2012 ANNUAL REPORT

that the economic uncertainty would eventually have an impact on Sydney Credit

growth that took place. Our loan portfolio

Union. While the Canadian economy

increased $11,278,896 or 11.2%. All areas

performed relatively well, the performance

of our lending portfolio showed very good

of our economy is still contingent on

increases throughout the year. Contributing

the performance of the economies of

to the loan growth was a decision to start

other countries. Unemployment levels

offering dealer financing for automobiles

continued to creep up, consumer debt levels

and recreational vehicles. We started the

remain at an all-time high and our federal

dealer finance program in September and we

government has placed restrictions on

were pleasantly surprised by the business we

mortgage borrowing. The current interest

did in such a short time. We are expecting

rates continue to remain low, for some

great results in 2013. Despite all the factors

5 years now, supposedly in an effort to

at play in 2012, Sydney Credit Union

stimulate the economy. As you know, the

continued to maintain a high quality loan

bulk of the financial industry’s profitability

portfolio.

is the difference between what they earn on loan and investment income and what

The deposit portfolio grew by $8,725,364

they pay out in interest to depositors.

or 7.3% in 2012. Good growth was

With interest rates being so low for such

achieved in all areas with the exception of

a long period of time, our ability to

Term Deposits which decreased by some

generate consistent returns is increasingly

$835,059. The largest increases were felt

challenging.

in Chequing, Savings and Tax Free Savings Accounts. Members are favouring the

Despite what’s been taking place in our

safety offered by Savings and Chequing

industry, I am pleased to report that

accounts rather than investing in Term

Sydney Credit Union continued to enjoy

Deposits at such low rates.

strong asset growth and profitability, while increasing equity levels. We ended 2012

Sydney Credit Union’s net income totaled

with assets totaling $144,923,345. This

$840,973, a decrease of $15,655 or 1.8%.

represents an increase of $9,432,923 or 7.0%

The profitability results reflect the extremely

over the prior year. Asset growth was driven

low interest rates, despite the exceptionally

by strong increases in our loan portfolio

strong loan growth we had in 2012. To put

which helped offset the $8,725,364 deposit

this in perspective, while our loans grew by

2


2 1 2 0 1 2 0 1 2 0 $11,278,896 or 11.2% the interest earned

our balance sheet, the substantial reserves

on loans for the same period only grew

and our conservative risk appetite. As a

by $130,150 or 2.3%. With that limited

result we are once again paying a patronage

revenue growth, we focused on managing

rebate based on strong financial results for

operating expenses, introducing new lending

2012.

products that would help offset the declining margins and finding ways of increasing our

Our success is made possible by the fantastic

other income from partner organizations.

teamwork between Board, management and

As a result, operating expenses totaled

staff. Without the cooperation of everyone

$5,584,342, a decrease of $178,742 or 3.1%

at all levels of the organization, we would

lower than the prior year. Other income also

not have been able to grow our balance

increased $287,799 or 18.4% over the prior

sheet, return a patronage rebate to our

year. Other income comes from our system

members and support our community in

partners such as CUWEALTH & INSURANCE

the ways we do. Our success is underpinned

(which is transitioning to Applied Wealth

by the strong leadership position we take.

Strategies), Credit Union Insurance Services,

We strive to provide the best possible

Concentra Financial and League Savings

experience when delivering our financial

and Mortgage Company. In summary, we

services. This expertise has enabled us to

completed the year with total equity of

continue to grow and increase market share

$14,453,819 or 10.0% of assets, an increase

year after year. With a competent, trained

of $841,408 or 6.2%.

staff, they have the confidence to be able to address all your financial concerns. We call

As at December 31, 2012 our membership

these three attributes “TLC� and that stands

stood at 12,982 compared to 12,979 for the

for Teamwork, Leadership and Confidence.

prior year-end. The youth component of our membership is 4,602 or 35.5% of our

To remain successful, we as a credit union

membership.

and as part of the greater credit union system, have to continually deal with

Sydney Credit Union remains one of

the challenges ahead. Interest rates are

the strongest and safest credit unions in

expected to remain low, putting continuing

Atlantic Canada, thanks to the strength of

pressure on margins to produce surpluses

ASSETS 2002-2012 ($ Millions)

DEPOSITS 2002-2012 ($ Millions)

150

130

120

104

90

78

60

52

30

26

0

0

LOANS 2002-2012 ($ Millions)

120

90

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

2002

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

30

2002

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

60

7


at a level that were enjoyed by many

reduce costs, create efficiencies, become

financial institutions prior to the recession

more competitive and instill confidence

of 2008. The emergence of aggressive

in the rest of the credit union system that

market penetration programs by financial

change is possible. The practices and

institutions, new competition from other

processes will then be modeled for the rest

commercial interests such as grocery store

of the Atlantic Credit Union system to

chains and big box store chains and the

avail of. In keeping with the co-operative

emergence of social media as a service

principles, Sydney Credit Union feels it is

delivery practice are changing the culture of

their responsibility to live the principles

managing finances. The high debt load of

of Cooperation Among Cooperatives and

Canadian households is continuing to rise

Concern for Our Community. We feel

causing regulatory changes to be considered

that our influence in directing solutions

by government and regulators as a means to

in the early stages will have a significant

correct this disturbing trend.

positive impact to Sydney Credit Union, its

2012 ANNUAL REPORT

Most importantly, we will make every effort to continue to build those relationships with our members and key stakeholders in the community.

membership and the credit union system in general and will secure the sustainability of the credit union system for the long term. This unsettled economic climate will be with us for quite some time to come. Who knows what will happen half way around

Credit Unions are viewed by the public

the world and how it will impact the way

as a financial institution that is guided by

we do business here in Canada. With the

cooperative principles to help its members

support of the Board, the skills of our staff,

with wealth management. Sydney Credit

the strength of our balance sheet, and our

Union views itself to be a progressive

participation in the Early Adopters group,

community-minded credit union serving

we will have the ability to change and

the needs of its membership and further

adjust our approach and strategy as the

recognizes it must adapt to the emerging

circumstances demand it.

trends and become more aggressive in seeking like-minded credit unions to

We will be working closer with our partners

take advantage of new opportunities and

to build stronger, more meaningful

economies of scale. This is why the Board

relationships that will result in increased

of Directors of Sydney Credit Union and

product offerings for you, the membership.

management agreed to become involved in

We will look to find new revenue sources,

a process which will see five like-minded

improve productivity and hopefully reduce

credit unions form a group, committed to

operating expenses even further. We will

moving forward on initiatives to improve

cooperate and work with others effectively

financial, operational and leadership

to achieve work related objectives.

effectiveness within the credit union system in Atlantic Canada. This group,

Most importantly, we will make every effort

referred to as the “Early Adopters� group,

to continue to build those relationships

will be instrumental in developing and

with our members and key stakeholders in

recommending practices and processes to

the community.

2


2 1 2 0 1 2 0 1 2 0 I would like to take this opportunity to

loyalty and support of the membership of

thank all staff, board members, committee

Sydney Credit Union. Thank you members,

members and the management team

for your loyalty and commitment to your

for the support that you have all shown

credit union.

me this past year. I thank the Board for

their commitment and confidence in our

Co-operatively yours,

management team when recommending new directions and strategies. And of

course, the ability to change and serve could not be accomplished without the continued

R.A. (Bob) Coffin, Chief Executive Officer

MANAGEMENT

Above Photo

(Front row from left to right)

(Back row from left to right)

Carol Ripley, Manager of Operations

Denise Dezagiacomo, Branch Manager, Sydney River

R.A. (Bob) Coffin, Chief Executive Officer

Shane LeBlanc, Branch Manager, Sydney

Leanne Boutilier, Marketing Manager

Todd Day, Manager of Premises and Collections Chris Parsons, IT Manager

(Middle row from left to right)

Nancy Burke, Human Resources Associate

Mary Wilson, Branch Supervisor

Jane Graham, Executive Assistant

Art Risk, Manager, Community Economic Development Karen MacNeil, Accountant

Frances MacDonald, Commercial Lending Consultant

9


PATRONAGE REBATE

r Ou ation aniz Org

r Ou bers m Me

r Ou f f Sta

r Ou unity m Com

r Ou rative pe Coo ctor Se

Sydney Credit Union’s Five Star Success™ is a profit sharing program which is unique to Sydney Credit Union. As a cooperative financial institution, each year we share our profits with our five key stakeholders; our credit union, our members, our staff, our community and our cooperative sector. We like to call our stakeholders “our five stars”! At the end of each fiscal year, we apply a formula to our bottom line which calculates the distribution of profit to each stakeholder group. Since 1997, Sydney Credit Union has given over $5 million dollars back to its members alone, which is just one stakeholder group in our Five Star Success™ program! Sydney Credit Union recognizes the importance and value of its stakeholders and is guided by the grassroots cooperative philosophy of ‘people before profits’. Sydney Credit Union members just received their profit share on April 15th for the 2012 business year. On your profit sharing statement you will see the products and services that earned you a rebate. If you’re not using all eligible products/services, talk to us….we can get you set up to earn more profit share for 2013! At Sydney Credit Union, our members are our top priority. When it comes to banking and

2012 ANNUAL REPORT

managing your money, we are Focused On You and your financial well-being, and that means you can always expect sound advice from our financial experts, with no obligations and no strings.

HOW DO WE CALCULATE YOUR SHARE OF THE PROFITS

YOUR PRODUCTS AND SERVICES

PROFIT SHARE CALCULATION

Deposit Interest - Bonus Interest

Bonus calculated from interest earned on your accounts for the year.

Savings & Chequing

3.40%

Term Deposits

3.40%

RRSPs & RRIFs

3.40%

TFSAs

3.40%

Loan Interest - Interest Rebate

Rebate calculated from interest you paid for the year.

Lines of Credit

3.40%

Loans

4.40%

Mortgages

2.45%

Other - Electronic Service Charges Rebate (per transaction)

Rebate calculated from each electronic transaction you complete.

Direct Deposit

$0.05

ATM & Interac® Direct Payment

$0.05

TeleService® & MemberDirect®

$0.05

Preauthorized Payment

$0.05

GLOBAL PAYMENT™ MasterCard®

$0.05

It pays to do business with Sydney Credit Union.

2


2 1 2 0 1 2 0 1 2 0 April 15, 2013

Mark Twain 123 Main Street Sydney NS B1S 2D 3

Dear Mark Twain,

Thanks to you, w e did it!

Over the last sixtee n years, we’ve shar ed more than $5 million of our profi ts with members ju st like you throug our Five Star Su h ccess Program™ . On April 15, 201 3, the RRSP/RRIF/ TFSA bonus was deposited into your registered account(s ) and the balance was deposit ed into your 1234 5-12-3 account. Your profit sharin Your 2012 Profit g statement shows how your payout reflects the busines Sh aring Statement s you did with us throughout 2012. Your Some quick facts ab out our 2012 Five Your Star Success Payout Products are: Reward Deposit Interest

Savings & Chequin • Total payout - $3 g ..................... $1 33,000 .14 Te rm Deposits............ • Average membe ................... $3.48 r payout - $60 RRSPs and RRIFs .... ...................... $15.5 • Total members 8 receiving rewards TFSAs.................... - 5,553 ........................ $2 .49 Once again this ye Loan Interest ar, you have the op tion of contributin Lines of Credit your 2012 Five Star ............................ g Success™ payout, $23.48 or a portion thereo Loans ............................ to the Sydney Cred f, .............. $47.24 it Union Charitabl Mo rtgages .................... e Foundation, in support of the m ............ $123.32 any community giv Account Services ing projects we provide assistance to. You will receiv Direct Deposit ........ e a tax deductible receipt for your co ...................... $2.38 ntribution. To mak AT M & Interac® Direc e a contribution t Payment ... $3.54 or for more inform TeleService® & Me ation, please call 56 mberDirect® .... $2 7-6532 or visit www.sydneycreditu .84 Preauthorized Paym nion.com ent ................. $1.23

Because we want to be your first and only choice in financial institutio ns, the more busin ess you conduct with us, the greater your share of our Five Star Success™ Ask us how! Call . 562-5593 for our To wnsend Street branch or 539-1684 for our Kings Road branch.

Doreen Burke President, Board of Di

rectors

R.A. (Bob) Coffin Chief Executive Offic er

GLOBAL PAYMENT™ MasterCard® ........ ........

................ $1.89

Your 2012 Total Share................ ....

.... $228.61

The more business you have with us, the larger your share of our profits for 2013

11


2012 ANNUAL REPORT STAFF

2


2 1 2 0 1 2 0 1 2 0 Top Photo (Front row from left to right)

(Back row from left to right)

Crista Currie, MSR

Muriel Jackson, MSR

Lori Jessome, MSR

Andrew Livingstone, MSR

Lindsay MacNeil, ATM Clerk

Connie MacNeil, MSO

Sarah MacIntosh, Administrative Assistant

Kyle Peterson, MSR

Michelle Mugford, ATM Clerk

Holly Johnston, MSR

Steven Rolls, Social Media Coordinator Courtney Phillipo, MSR Laurie Walker, MSR

Middle Photo (Front row from left to right)

(Back row from left to right)

Bobbi-Ann Lanceleve, MSR

Annette Coakley, Chequing Clerk

Stephen LeBlanc, Dealer Finance Representative

Sharon Harnish, MSO

Cynthia MacLellan, MSR

Shelley Murrant, MSR

Ashley Hillier, MSR

Denise Mullins, MSR

Tracy MacKinnon, MSR

Lisa Antinello-LeBlanc, Central Teller

Jaclyn Smithers , MSR

Chris Larade, Financial Services Clerk Carol Lee Carrigan, Teller Supervisor Bob Gill, General Office Worker

Bottom Photo (From left to right)

Absent from Photos

Chris MacPherson, FSO

Adrienne Collins, MSR

Barb Miller, FSO

April Boutilier, Receptionist

Patsy Cantwell-Underhill, FSO

Dana Tynski, Receptionist

Jackie Young, FSO

Jennifer Griffin, Receptionist Joline Vassallo, FSO Krista Hooper, MSR

Laura Rykunyk, MSR

Laura Lee Arsenault, MSR

Legend: Member Service Officer - MSO, Member Service Representative - MSR, Financial Services Officer - FSO

13


2012 ANNUAL REPORT

PART OF OUR COMMUNITY

CAPE BRETON CARES RADIOTHON

FAT CAT SCHOOL PROGRAM

Sydney Credit Union is proud of its long

The Sydney Credit Union FAT CAT School

history of support for the Cape Breton

Program was launched in 1997 and now

Regional Hospital Foundation (CBRHF),

includes seven elementary schools in our

having donated over $250,000 to date! It is

community. Each year we welcome students

critically important to Sydney Credit Union

from our participating schools to visit Sydney

that members of our community obtain

Credit Union to open a FAT CAT account.

professional medical services here at home. In 2012, Sydney Credit Union continued with

A staff person from Sydney Credit Union

its financial support as well as volunteering of

visits the schools every second week, meets

our time for fundraising initiatives in support

with the students and collects their deposits.

of our hospital.

The program encourages children to develop regular savings habits by providing a

The 5th Annual Cape Breton Cares Radiothon

convenient place for regular deposits, while

was again a huge success, raising over

introducing the values and principles of

$571,000 in support of specialized services at

cooperation.

the Cape Breton Regional Hospital. Pledges for the Radiothon were collected at both

The schools involved in the Sydney Credit

branches of Sydney Credit Union and staff

Union FAT CAT School Program are:

volunteered their time at the event.

• Brookland

• Cusack

• Sydney River

• Mira Road

• Marion Bridge

• Coxheath

• Harbourview Montessori

2


2 1 2 0 1 2 0 1 2 0 SYDNEY CREDIT UNION KIDSPREE

Our 3rd annual Kidspree event took place in August 2012, as part of the CBRM’s Action

Week Festivities. This is an enormous event,

filled with fun for the entire family. The event offers free admission and lots of activities,

with hundreds of families enjoying the daylong celebration. Watch for Kidspree 2013 and come out and join us as we celebrate family fun in our community!

15


2012 ANNUAL REPORT

2

WALK THE WALK: STEPPING IN THE RIGHT DIRECTION FOR AUTISM Sydney Credit Union was the Ambassador sponsor of the Walk the Walk for Autism, held in June 2012. The event included approximately 1,600 walk participants province wide. Sydney Credit Union staff volunteered their time, both walking and tallying donations, to help make the Cape Breton event a huge success with $30,000 raised for Autism!

CHRISTMAS PARADE Spreading joy and season’s greetings is the Sydney Credit Union Eco-Dasher, all decked out for the holidays!


2 1 2 0 1 2 0 1 2 0 SYDNEY CREDIT UNION’S BREAKFAST FOR LEARNING GOLF TOURNAMENT Our 3rd annual golf tournament, in

partnership with the Cape Breton Victoria

Regional School Board, raised an incredible $30,000 for the breakfast program in 2012!

The importance of feeding young hearts and

minds through our schools’ breakfast program continues to be the winning force behind our fun filled tournament.

17


2012 ANNUAL REPORT

ISLAND SKATEPARK CLEAN UP

CBU FROSH WEEK

In 2004 Sydney Credit Union had the

This year during Frosh Week, CBU extended

privilege to donate $15,000 to Island

the offer for local businesses to visit and

Skatepark (Coxheath) during their fundraising

introduce themselves to the incoming

efforts. In August 2012, some of the Sydney

students and their families! Sydney Credit

Credit Union staff headed over to Coxheath

Union jumped at the opportunity to meet

to show our continued support for the project

everyone, joined in this exciting time of new

and help with their seasonal clean-up. It

beginnings, and set up an information table

was great to see so many families and young

to share some of our products and services

people out to help with making their park

geared specifically at youth.

clean and safe.

2


2 1 2 0 1 2 0 1 2 0 SHARE, SUPPORT AND RECOVERY

In 2011, Sydney Credit Union had discussions with the Director of Mental Health Services

for the Cape Breton District Health Authority. Patients of Mental Health Services often are subjected to sub-standard housing, food insecurity, minimal access to education,

virtually no access to employment, social/ geographical isolation, and exclusion and marginalization. During discussions, the

need for an organization that would provide all of the services necessary to improve the quality of life for those in our community

with mental health and social challenges was clearly identified.

Sydney Credit Union responded to the need

in partnership with the Cape Breton District

Health Authority and New Dawn Enterprises for the creation of a new community

organization temporarily referred to as Share,

Support and Recovery. The purpose of which is to create opportunities for independence,

education, housing, employment and social engagement for this group of vulnerable individuals in Cape Breton.

The partnership includes a $20,000

commitment and $30,000 of in-kind services from New Dawn Enterprises and a $250,000

commitment from the Sydney Credit Union Charitable Foundation. Share, Support

and Recovery will provide a broad range

of interconnected services for individuals recovering from mental health disorders

and addictions. In addition to our financial commitment, Sydney Credit Union will

facilitate its Financial Literacy program on an

on-going basis to the clients of Share, Support and Recovery.

19


IYC Flag Raising Ceremony The United Nations General Assembly declared 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration. On Thursday, July 5th at 12:00 pm, we were delighted to be joined by Mayor John Morgan, CBRM councillors and a great representation of co-operative and credit union staff, members, and supporters for an International Year of Cooperatives flag-raising ceremony at the CBRM Civic Centre in Sydney. “Co-operative organizations help build and sustain healthy communities in the Cape Breton Regional Municipality; promote jobs, stem the outflow of capital, and enhance the quality of life for those

2012 ANNUAL REPORT

in our province, throughout the country and the world” – excerpt from the proclamation passed by CBRM council in support of the IYC.

2


2 1 2 0 1 2 0 1 2 0 HIGH SCHOOL OUTREACH

This year, we continued out outreach to Sydney’s High Schools with continued

support to Safe Grad, Riverview Red Cup, and Juniour Achievement’s Pitch It event

where students got to pitch their JA business ideas in front of a panel of local business professionals. The schools have been so

appreciative of our support and especially our efforts to participate where we can in their events and celebrations.

For more community photos, follow us on Facebook. /SydneyCreditUnion

21


ATLANTIC BUSINESS ETHICS AWARD On November 7, 2012, Sydney Credit Union was awarded the prestigious 2012 Atlantic Business Ethics Award in the 16-50 employee category. The award is granted by the Better Business Bureau of the Atlantic Provinces in recognition of businesses that go beyond the average in maintaining high standards of ethical behavior. Businesses are evaluated in the areas of responsibility, ethical decision making, ethical leadership, ethical initiatives and environmental

2012 ANNUAL REPORT

sustainability.

Above Photo (center) R.A. (Bob) Coffin, CEO, Sydney Credit Union and Doreen Burke, President, Board of Directors, Sydney Credit Union, accept the 2012 Atlantic Business Ethics Award from (left) Paul Dewolfe, ScotiaBank District VP, SWNS District and (right) Don MacKinnon, BBB President and CEO.

Sydney Credit Union is honored to have been nominated by one of our members for this esteemed award and are further honored to have been granted the award. Highlights from our award submission are provided below. Responsibility:

our members (patronage rebate/profit

Sydney Credit Union’s award winning

share program), our staff (profit share

Five Star Success™ program. As a

program), our community (philanthropy)

cooperative financial institution

and our cooperative sector (cooperative

guided by the grassroots cooperative

development initiatives).

philosophy of ‘people before profits’, we share our profits annually with our

Sydney Credit Union’s Customer

five key stakeholders; our credit union

Relationship Management strategy which

(reinvested back into the organization

governs our commitment to service

to fund growth and development),

excellence and member satisfaction.

2


2 1 2 0 1 2 0 1 2 0 •

Our long standing and ongoing support

community organization, Share, Support

of our Cape Breton Regional Hospital

and Recovery, in partnership with the

Foundation, having contributed over

Cape Breton District Health Authority and

$250,000 to date.

New Dawn Enterprises.

Continued sponsorship of the Cape Breton

Ethical Initiatives:

Fiddlers Run to promote physical fitness

Sydney Credit Union promotes ethical

and healthy living for people of all ages in

behavior at all times and is part of a

our community.

national service, Integrity In Action, which provides a means for staff to anonymously

Continued sponsorship of JA’s Pitch It!

report employee dishonesty.

An event which fosters entrepreneurship

and financial literacy skills for high school

students.

The creation of our Sydney Credit Union Charitable Foundation whose mission is “to be a catalyst for positive change by

Sydney Credit Union’s Breakfast For

supporting initiatives that enhance the

Learning annual golf tournament, having

quality of life through the advancement

raised $56,000 for the Cape Breton Victoria

of Community Health, Financial Literacy,

Regional School Board’s breakfast program

and Environmental Protection”.

over the past two years.

Sydney Credit Union’s purchase of an Argo

Ethical Decision Making:

for the Cape Breton Search and Rescue

Sydney Credit Union’s Purchasing Policy

team after a tragedy in our community

which governs our corporate purchases,

raised awareness of the importance and

with preference given to member suppliers,

need for sophisticated equipment in

local suppliers, recycled materials and so

emergency situations.

on.

Sponsorship of a Cooperative

Sydney Credit Union’s Financial Literacy

Development Research Project, facilitated

program exemplifies our ethical and social

through CBU. The project results will be

responsibility to educate and empower

used by Sydney Credit Union to create

people within our community to make

a Cooperative Development Initiative

wise financial decisions for their financial

within the CBRM for the benefit of local

future.

cooperatives.

Ethical Leadership:

Environmental Sustainability:

Sydney Credit Union’s Microfinance

Sydney Credit Union’s Carbon Footprint

program supports small business

and Office Greening Program. As a result

entrepreneurs who require access to

of our Carbon Footprint Study in 2011,

credit to finance their innovative business

we have developed an Office Greening

ventures.

Strategy which includes upgrades to energy efficiency lighting, green certified cleaning

Sydney Credit Union’s commitment

products, and strategies to reduce water

of $250,000 for the creation of a new

and paper consumption.

23


Sydney Credit Union is a strong promoter

Both branches of Sydney Credit Union

of the benefits of physical activity,

are designated Idle Free Zones with

particularly when combined with the

signage displayed in both parking lots to

beauty of our natural surroundings.

encourage drivers to not idle their vehicles

Sydney Credit Union has financially

while on Sydney Credit Union property.

supported our community’s three local nature trails; the Baille Ard Trail, Coxheath

Mountain Trail and the East Bay Trail.

Sydney Credit Union is pleased to support the New Dawn Cold Climate Greenhouse Project. New Dawn Enterprises, in

Sydney Credit Union’s Like Your Bike

collaboration with the Eskasoni First

program has seen the distribution of

Nation community, has designed and

custom made bike racks at various

constructed an innovative 1800 square

locations throughout our community,

foot Cold Climate Greenhouse facility in

promoting alternative means of

Sydney River.

2012 ANNUAL REPORT

transportation.

The Sydney Credit Union Charitable Foundation was incorporated and subsequently launched on November 16, 2010 as part of Sydney Credit Union’s 75th anniversary celebrations. After years of development, the Foundation has been established as a means for members, nonmembers and the community at large to be able to leverage contributions to the Foundation with the contributions of others, in support of programs that aim to better the lives of those within our community. The Foundation also allows Sydney Credit Union the ability to accumulate funds for specific community projects year over year, as well as the ability to provide tax deductible receipts to members who contribute to the Foundation. In addition to the support the Foundation receives from Sydney Credit Union, the Foundation has also received numerous contributions from Sydney Credit Union members. We thank you, our members, for supporting the Sydney Credit Union Charitable Foundation and for believing that together we can enhance the economic and social well being of our members and our community! To make a contribution, please visit one of our branches, ask anyone of our staff or call 567-6532.

MISSION

VALUES

MANDATE To support initiatives that

Integrity

enhance the quality of life

To be a catalyst for positive

Empowerment

through the advancement of

change.

Community Health

Community Health, Financial

Collaboration

Literacy, and Environmental Protection.

2


2 1 2 0 1 2 0 1 2 0 APPLIED WEALTH STRATEGIES

Above Photo (From left to right)

Kim Neville, Licensed Assistant, Denise Gallant, Certified Financial Planner, and Judy MacPhee, Marketing Assistant

Applied Wealth Strategies (formerly

values and community focus. You will receive

CUWEALTH & INSURANCE) is an

outstanding personal service and advice

independent insurance agency offering

tailored to your own situation. Managed by

financial planning, investments including

Denise Gallant, Applied Wealth Strategies

GIC’s and mutual funds, and insurance

provides professional wealth management

planning to members of Sydney Credit

services, access to financial planning

Union and our community. At Applied

expertise, asset management services

Wealth Strategies, we provide a broad range

including mutual funds*, segregated funds,

of services, products and plans to meet the

annuities, and personal insurance products.

diverse needs of our clients and credit union members.

To speak with someone about your financial future, simply contact Sydney Credit Union

Although the Applied Wealth Strategies office

to arrange a referral or contact Applied

operates as a separate entity from Sydney

Wealth Strategies directly.

Credit Union, it operates with the same

Applied Wealth Strategies 336 Kings Road (Medical Arts Building) Suite 204, Sydney, Nova Scotia Phone: 567-2533 Email: clientassistant@appliedwealth.ca www.appliedwealth.ca

*Mutual funds provided through FundEX Investments Inc.

25


MGM & Associates Chartered Accountants Commerce Tower 15 Dorchester Street, Suite 500 PO Box 1 Sydney NS B1P 6G9

Telephone Fax Internet

(902) 539-3900 (902) 564-6062 www.mgm.ca

INDEPENDENT AUDITORS’ REPORT ON THE SUMMARY FINANCIAL STATEMENTS To The Members of Sydney Credit Union Limited The accompanying summary financial statements, which comprise the statement of financial position as at December 31, 2012, and the statements of comprehensive income, changes in members’ equity and cash flows and the schedule of expenses for the year then ended, are derived from the audited financial statements of Sydney Credit Union Limited for the year ended December 31, 2012. We expressed an unmodified audit opinion on those financial statements in our report dated March 19, 2013. Those financial statements, and the summary financial statements, do not reflect the effects of events that occurred subsequent to the date of our report on those financial statements.

2012 ANNUAL REPORT

The summary financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Sydney Credit Union Limited. Management's Responsibility for the Summary Financial Statements Management is responsible for the preparation of a summary of the audited financial statements in accordance with International Financial Reporting Standards. Auditors' Responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with Canadian Auditing Standard (CAS) 810, “Engagements to Report on Summary Financial Statements”. Opinion In our opinion, the summary financial statements derived from the audited financial statements of Sydney Credit Union Limited for the year ended December 31, 2012 are a fair summary, in all material respects, of those financial statements, in accordance with International Financial Reporting Standards.

Chartered Accountants Sydney, Canada March 27, 2013

2


2 1 2 0 1 2 0 1 2 0 SYDNEY CREDIT UNION LIMITED Statement of Financial Position

December 31, 2012, with comparative figures for 2011

2012

2011

ASSETS

Cash and cash equivalents Investments and deposits Loans to members Income taxes receivable Other assets Property, buildings and equipments

$

6,869,409 21,631,777 112,443,694 762,558 3,215,907

$

10,646,070 19,582,956 101,164,798 111,380 679,307 3,305,911

$ 144,923,345

$ 135,490,422

$ 128,954,470 257,641 335,236 129,547,347

$ 120,229,106 293,895 364,880 120,887,881

640,101 150,000 118,600 13,478 922,179

617,180 250,000 122,950 740,130

130,469,526

121,628,011

75,820 14,377,999 14,453,819

75,385 13,537,026 13,612,411

$ 144,923,345

$ 135,490,422

LIABILITIES

Liabilities to members Deposits Accrued interest on deposits Accrued patronage rebate

Liabilities to non-members Accounts payable and accrued liabilities Provision for funding commitment Deferred income tax liability Income taxes payable

MEMBERS' EQUITY

Equity shares Retained earnings Accumulated other comprehensive income

1

27


SYDNEY CREDIT UNION LIMITED Statement of Comprehensive Income

Year ended December 31, 2012, with comparative figures for 2011 2012 INCOME Interest on loans Investment income

$

2012 ANNUAL REPORT

INTEREST EXPENSE Interest on members' deposits Loan interest and referral fees

5,748,644 380,333 6,128,977

2011 $

5,618,494 942,718 6,561,212

1,241,985 56,025 1,298,010

1,223,776 327 1,224,103

Financial margin

4,830,967

5,337,109

Other income

1,853,084 6,684,051

1,565,285 6,902,394

2,608,313 129,632 1,940,036 398,309 311,124 196,928 5,584,342

2,501,301 120,149 2,274,877 399,828 278,420 188,509 5,763,084

1,099,709

1,139,310

263,086 (4,350) 258,736

263,032 19,650 282,682

840,973

856,628

-

-

EXPENSES Personnel Members' security (schedule) General business (schedule) Occupancy (schedule) Provision for loan losses Depreciation

Income before income taxes Income taxes Current Deferred (recovery)

NET INCOME OTHER COMPREHENSIVE INCOME COMPREHENSIVE INCOME

$

840,973

$

856,628

2

2


2 1 2 0 1 2 0 1 2 0 SYDNEY CREDIT UNION LIMITED Statement of Changes in Members' Equity

Year ended December 31, 2012, with comparative figures for 2011

Equity shares

BALANCE, DECEMBER 31, 2010

Total

75,905 $ 12,680,398 $

-

$ 12,756,303

Comprehensive income Shares issued Shares redeemed

5,230 (5,750)

856,628 -

-

856,628 5,230 (5,750)

BALANCE, DECEMBER 31, 2011

75,385

13,537,026

-

13,612,411

Comprehensive income Shares issued Shares redeemed

5,880 (5,445)

840,973 -

-

840,973 5,880 (5,445)

-

$ 14,453,819

BALANCE, DECEMBER 31, 2012

$

Retained earnings

Accumulated other comprehensive income

$

75,820 $ 14,377,999 $

3

29


SYDNEY CREDIT UNION LIMITED Statement of Cash Flows

Year ended December 31, 2012, with comparative figures for 2011

2012 ANNUAL REPORT

2012 CASH FLOWS FROM OPERATIONS Net income Items not involving cash Depreciation Deferred income taxes (recovery) Loss on disposal of equipment Stock dividend received Change in non-cash operating working capital Increase in loans to members Decrease (increase) in income taxes receivable Decrease (increase) in other assets Increase in deposits Increase (decrease) in accrued interest on deposits Increase in accrued patronage rebate Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in provision for funding commitment Increase in income taxes payable

$

840,973

2011 $

856,628

196,928 (4,350) -

188,509 19,650 8,463 (526,000)

(11,278,896) 111,380 (83,251) 8,725,364 (36,254) 2,486

(4,137,394) (45,439) 190,608 8,514,580 50,033 19,285

(9,209)

25,124

(100,000) 13,478 (1,621,351)

250,000 5,414,047

435

(520)

(2,048,821) (106,924) (2,155,745)

(1,337,811) (104,358) 15,687 (1,426,482)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(3,776,661)

3,987,045

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

10,646,070

6,659,025

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in equity shares, net CASH FLOWS FROM INVESTMENT ACTIVITIES Increase in investments and deposits Purchase of property, buildings and equipment Proceeds from disposal of leaseholds

CASH AND CASH EQUIVALENTS, END OF YEAR Supplemental cash flow information Cash paid during the year for: Interest on members' deposits Income taxes Cash received during the year for Dividends and interest on investments Interest on loans to members

$

6,869,409

$

10,646,070

$

1,326,741 138,228

$

1,143,847 308,471

344,566 5,352,029

397,934 5,223,771

4

2


2 1 2 0 1 2 0 1 2 0 SYDNEY CREDIT UNION LIMITED Schedule of Expenses

Year ended December 31, 2012, with comparative figures for 2011

2012

MEMBERS' SECURITY Bonding insurance Loan insurance Deposit insurance

GENERAL BUSINESS Advertising and promotion Professional fees Data processing Educational Service fees and charges Central assessment and dues Miscellaneous Office and stationery Postage Service contracts and maintenance Scholarships Telephone Administrative fees - RRSP

OCCUPANCY Heat, lights and water Insurance Municipal taxes Janitorial and cleaning supplies Repairs and maintenance

2011

$

31,682 573 97,377

$

28,662 1,075 90,412

$

129,632

$

120,149

$

189,394 33,914 283,756 82,686 751,820 206,844 154,428 70,779 44,997 40,436 10,000 65,082 5,900

$

571,101 35,654 296,883 131,791 668,554 199,565 141,516 58,113 48,368 36,213 11,200 64,361 11,558

$

1,940,036

$

2,274,877

$

64,956 28,924 193,975 60,322 50,132

$

63,108 31,214 193,453 51,418 60,635

$

398,309

$

399,828

5

31


2012 ANNUAL REPORT NOTES

2


2 1 2 0 1 2 0 1 2 0 33


2012 ANNUAL REPORT

Sydney

Sydney River

95 Townsend St

1280 Kings Rd

Sydney NS

Sydney River NS

(902) 562-5593

(902) 539-1684

www.sydneycreditunion.com Make sure you look us up on your favourite social media site. /SydneyCreditUnion @SydCreditUnion /CreditUnionSydney


2012 Annual Report - Sydney Credit Union