Financial Supplement to the Kindred Annual Report BANKING ...

Financial Supplement to the Kindred Annual ReportYear ended December 31, 2016

BANKINGWith

Purpose

Management’s Responsibility for Financial Reporting

The accompanying financial statements of Kindred Credit Union Limited are the responsibility of Management and have been approved by the Board of Directors.

The financial statements have been prepared by Management in accordance with International Financial Reporting Standards. When required, Management has used reasonable and informed judgments and estimates in order to ensure that the financial statements are presented fairly and accurately in all material respects.

To meet its responsibility for the integrity and fairness of the financial statements, Management has designed and maintains accounting processes and systems of internal controls to provide reasonable assurance regarding the accuracy of financial records and to establish reliable data for the preparation of financial statements, and the necessary safeguarding of Credit Union assets.

The Board of Directors is responsible for ensuring that Management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility through its regular review of financial results and operations, and through the Board appointed Audit and Risk Committee. The Audit and Risk Committee has the responsibility of meeting with management and external auditors to discuss internal controls over the financial reporting process, matters arising from periodic audits, and other financial reporting issues. The Audit and Risk Committee regularly reports its findings to the Board for consideration.

The financial statements have been audited on behalf of the membership by PricewaterhouseCoopers LLP, the external auditors, in accordance with International Financial Reporting Standards. PricewaterhouseCoopers LLP has full and free access to the Audit and Risk Committee. The Auditor’s Report outlines the nature of their audit and expresses their opinion on the financial statements of the Credit Union.

Brent Zorgdrager cpa, ca John Klassen cpa, cma Chief Executive Officer Chief, Finance and Compliance

Audit and Risk Committee Report

The Audit and Risk Committee assists the Board of Directors in fulfilling its oversight responsibilities. It does this by reviewing the financial information and reporting processes, including the risks and controls related to those processes which management and the Board have established. The committee is comprised of four directors and has a mandate that includes all of the duties specified for an audit committee in the Credit Union and Caisses Populaires Act, 1994 (The Act) and the associated regulations.

The Audit and Risk Committee met five times during 2016 to complete its responsibilities. Key activities included:

• Review the financial statements and results of the year end audit with the external auditor; • Review the performance of the external auditor and their proposed engagement letter;• Ensure that regulatory filings were submitted on time;• Review the credit union’s policies, procedures, and controls for legislative compliance;• Review the disaster recovery and business continuity plans;• Monitor the adherence of Directors, Officers, and employees with the credit union’s policies

and code of conduct;• Review management’s identification of the credit union’s significant risks and ensure that

enterprise risk management processes are in place to measure, monitor, manage and mitigate them;

• Approve the annual internal audit plan and review internal audit activities;• Complete a self-assessment on the effectiveness of the Committee and take the necessary

steps to ensure effectiveness.

Based on its findings, the Audit and Risk Committee provides reports and makes recommendations to the Board of Directors or senior management, as appropriate. These recommendations are reviewed to ensure they are considered and appropriate action taken.

The Audit and Risk Committee is pleased to report to the members of Kindred Credit Union that, pursuant to The Act and its regulations, it continues to meet the requirements of its mandate. The committee receives full cooperation and support from management, thus enabling it to play an effective role in improving the quality of financial reporting to its members, and enhancing the overall control environment at Kindred.

In addition, there are no other matters that the Audit and Risk Committee believes should be reported to the members, nor are there any further matters that are required to be disclosed pursuant to The Act or its regulations.

Respectfully submitted,

Randy Shantz, Audit and Risk Committee Chair

Committee: Susan Lofthouse, Susan Taves, John D. Wiebe

Kindred Credit Union Limited

Financial Statements December 31, 2016

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership. PricewaterhouseCoopers LLP95 King Street South, Suite 201, Waterloo, Ontario, Canada N2J 5A2 T: +1 519 570 5700, F: +1 519 570 5730

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

February 24, 2017

Independent Auditor’s Report

To the Members of

Kindred Credit Union Limited

We have audited the accompanying financial statements of Kindred Credit Union Limited, which comprise the statement of financial position as at December 31, 2016 and the statements of comprehensive income, changes in members’ equity, and cash flows for the year then ended and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Kindred Credit Union Limited as at December 31, 2016 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Chartered Professional Accountants, Licensed Public Accountants

Kindred Credit Union Limited Statement of Financial Position As at December 31, 2016

(in thousands of dollars)

The accompanying notes are an integral part of these financial statements.

Approved by the Board of Directors

__________________________________ Director _________________________________ Director

2016$

2015$

Assets

Cash 12,702 9,926 Investments - liquidity reserve deposits (note 5) 62,985 58,016 Loans to members (note 6) 953,353 865,950 Income tax recoverable - 188 Derivative financial instrument assets (note 18) 1,737 3,071 Investments - other (note 5) 29,207 27,301 Property and equipment (note 7) 5,587 5,105 Deferred income tax asset (note 15) 734 654 Other assets 3,820 3,674

1,070,125 973,885

Kindred Credit Union Limited Statement of Financial Position As at December 31, 2016



2016$

2015$

Liabilities

Deposits of members Members’ deposits (note 8) 918,735 858,720 Accrued interest payable 5,247 5,286

923,982 864,006

Liabilities to non-members Accounts payable and accrued charges (note 10) 9,006 5,216 Income tax payable 142 - Demand loan (note 9) 25,718 10,643 Mortgage securitization liabilities (note 19) 28,751 13,884 Deferred income tax liability (note 15) 148 144

63,765 29,887

Liabilities qualifying as regulatory capital Investment shares (note 11) 19,625 19,235 Owner shares (note 11) 17,360 17,577 Member shares (note 11) 447 432

37,432 37,244

1,025,179 931,137

Members’ Equity

Retained earnings 40,746 40,618 Accumulated other comprehensive income 4,200 2,130

Total members’ equity 44,946 42,748

1,070,125 973,885

Kindred Credit Union Limited Statement of Comprehensive Income For the year ended December 31, 2016



2016$

2015$

RevenueInterest income 32,490 31,285 Investment income 837 953

33,327 32,238 Interest expense (income)Interest on members’ deposits 12,733 13,548 Patronage refund (note 14) 810 980 Interest on investment shares 473 355 Interest on external borrowings 425 288 Loss (gain) on derivative financial instruments (note 18b) 119 (2,729)Mortgage securitization cost of funds 359 98

14,919 12,540

Financial margin 18,408 19,698

Other revenue 4,622 4,423

Earnings before the undernoted 23,030 24,121

Operating expensesPersonnel expenses 13,275 12,604 Administration expenses 5,456 4,566 Occupancy expenses 2,633 2,539 Insurance expenses 758 716

22,122 20,425

Earnings before provision for loan loss and charitable giving 908 3,696

(Provision for) recovery of loan losses (note 6) (412) 69 Charitable giving (348) (236)

Earnings before income taxes 148 3,529

Provision for income taxes (note 15) (20) (610)

Net earnings 128 2,919

Other comprehensive income, net of tax Items that may be reclassified subsequently to net income

Net change in unrealizable gain (losses) on investments designated as available for sale (note 15c) 2,070 (640)

Comprehensive income for the year 2,198 2,279

Kindred Credit Union Limited Statement of Changes in Members’ Equity For the year ended December 31, 2016



Retained earnings

$

Accumulated other

comprehensive income (loss)

$ Total

$

Balance - December 31, 2014 37,699 2,770 40,469

Net earnings 2,919 - 2,919 Other comprehensive income (loss), net of tax

(note 15c) - (640) (640)


Net earnings 128 - 128 Other comprehensive income (loss), net of tax

(note 15c) - 2,070 2,070


Accumulated other comprehensive income relates to gains and losses arising from changes in fair value of financial

assets designated as available for sale, shown net of tax of $866 (2015 - $457).

Kindred Credit Union Limited Statement of Cash Flows For the year ended December 31, 2016



2016$

2015$

Cash provided by (used in)

Operating activitiesNet earnings 128 2,919 Adjustments for

Interest and investment income (33,327) (32,238)Interest expense 12,415 11,994 Provision for income taxes 20 610 Patronage refund 810 980 Provision for (recovery of) loan losses 412 (69)Amortization of property and equipment (note 7) 832 741 Loss on disposition of property and equipment - 1 Net change in unrealized gains on derivative instruments 1,334 (1,771)

Other 3,717 (88)Changes in member activities (net)

Change in loans to members (87,815) (49,407)Change in members’ deposits 59,786 45,409

Cash flows relating to interest and income taxes Interest received on loans to members 33,630 31,682 Interest paid on members’ deposits (12,454) (12,598)Income taxes paid (173) (827)

(20,685) (2,662)

Financing activitiesIncrease (decrease) in demand loan 15,075 (2,687)Proceeds on mortgage securitization 14,727 13,884 Redemption of owner shares (note 11) (645) (555)Net increase in member shares (note 11) 15 14

29,172 10,656 Investing activitiesPurchase of investments (4,397) (7,982)Distributions received - - Purchase of property and equipment (note 7) (1,314) (924)

(5,711) (8,906)

Increase (decrease) in cash 2,776 (912)

Cash - Beginning of year 9,926 10,838

Cash - End of year 12,702 9,926

Kindred Credit Union Limited Notes to Financial Statements December 31, 2016

(tabular amounts in thousands of dollars)

(1)

1 Reporting entity

Kindred Credit Union Limited is incorporated under the Credit Union and Caisses Populaires Act 1994 (“The

Act”) of Ontario and is a member of Central 1 Credit Union Limited (Central 1). The Credit Union was

formerly known as Mennonite Savings and Credit Union (Ontario) Limited. The Credit Union officially

changed its name to become known as Kindred Credit Union Limited on July 4, 2016. The Credit Union

operates as one operating segment in the loans and deposit taking industry in Ontario. Products and

services offered to its members include mortgages, personal, commercial and agricultural loans, chequing

and savings accounts, term deposits, RRSPs, RRIFs, automated banking machines, debit and credit cards

and internet banking. The Credit Union head office is located at 1265 Strasburg Rd., Kitchener, Ontario.

The financial statements have been authorized for issue by the Board of Directors on February 23, 2017.

2 Basis of presentation

These financial statements have been prepared in conformity with International Financial Reporting

Standards (IFRS) as issued by the International Accounting Standards Board (the IASB).

These financial statements were prepared under the historical cost convention, as modified by the

revaluation of available for sale financial assets and derivative financial instruments measured at fair value.

The financial statements’ values are presented in Canadian dollars ($) which is the functional and

presentation currency of the Credit Union.

The preparation of financial statements in conformity with IFRS requires the use of certain critical

accounting estimates. It also requires management to exercise its judgment in the process of applying the

Credit Union’s accounting policies. Changes in assumptions may have a significant impact on the financial

statements in the period the assumptions changed. Management believes that the underlying assumptions

are appropriate and that the Credit Union’s financial statements therefore present its financial position and

performance fairly.

Estimates and judgments are continually evaluated and based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances. Actual

results could differ from those estimates. The areas involving a higher degree of judgment or complexity, or

areas where assumptions and estimates are significant to the financial statements are the fair value of

financial instruments and the member loan loss provisions. These areas are further disclosed in note 4.

3 Significant accounting policies

a) Allowance for impaired loans

The Credit Union maintains allowances for doubtful loans that reduce the carrying value of loans

identified as impaired to their estimated realizable amounts. A loan is considered impaired if there is

objective evidence of impairment as a result of one or more events that occurred after the initial

recognition of the loan and that event or events has an impact on the estimated future cash flows of the



(2)

loan that can be reliably estimated. The criteria that the Credit Union uses to determine that there is

objective evidence of an impairment include delinquency in contractual payments of principal or

interest, financial difficulties experienced by the borrower, breach of loan covenants or conditions,

initiation of bankruptcy proceedings or deterioration in the value of collateral. Estimated realizable

amounts are determined by estimating the fair value of security underlying the loans, and by

discounting the expected future cash flows at the financial asset’s original effective interest rate.

For the purposes of a collective evaluation of impairment, loans are grouped on the basis of similar

credit risk characteristics (on the basis of the Credit Union’s grading process that considers

characteristics of each loan portfolio, industry, past-due status, historical write-off experience and

other relevant factors). These characteristics are relevant to the estimation of future cash flows for

groups of such loans by being indicative of the member’s ability to pay all amounts due according to the

contractual terms of the loans being evaluated.

Future cash flows in a group of loans that are collectively evaluated for impairment are estimated on

the basis of the contractual cash flows of the loans in the Credit Union and historical loss experience for

loans with similar credit risk characteristics. Historical loss experience is adjusted on the basis of

current observable data to reflect the effects of current conditions that did not affect the period on

which the historical loss experience is based and to remove the effects of conditions in the historical

period that do not currently exist.

The methodology and assumptions used for estimating future cash flows are reviewed regularly by the

Credit Union to reduce any differences between loss estimates and actual loss experience.

When a loan is uncollectible, it is written off against the related allowance for doubtful loans. Such

loans are written off after all the appropriate approvals have been completed and the amount of the loss

has been determined.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognized, the previously recognized

impairment loss is reversed by adjusting the allowance account. The amount of the reversal is

recognized in the statement of comprehensive income in the provision for loan losses.

b) Interest income and expense

Interest income and expense is recognized in the statement of comprehensive income for loans and

receivables and other financial liabilities using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial asset or

liability and allocating the interest income or expense over the relevant period. The effective interest

rate is the rate that exactly discounts the expected future cash payments or receipts through the

expected life of the financial instrument to its fair value at inception. The application of this method

has the effect of recognizing interest income and expense on the instrument in proportion to the

amount outstanding over the period to maturity or repayment.



(3)

In calculating the effective interest, the Credit Union estimates cash flows (using projections based on

its experience of members' behaviour) considering all contractual terms of the financial instruments

but excluding future credit losses. Fees, including those for early redemptions, are included in the

calculation to the extent that they can be measured and in the opinion of management, are considered

to be significant, to the effective interest rate. Where it is not possible or practical to otherwise estimate

reliably the cash flows or the expected life of a financial instrument, effective interest is calculated using

the payments or receipts specified in the contract, and the full contractual term.

Interest income on impaired loans continues to be recorded until the loan is determined to be

uncollectible and is written off.

c) Fees

Unless included in the effective interest calculation, fees are recognized on an accrual basis as the

service is provided and are reported in the statement of comprehensive income as other revenue.

d) Financial assets and liabilities

In accordance with IAS 39, all financial assets and liabilities including derivative financial instruments

are recognized in the statement of financial position and measured in accordance with their assigned

category.

Under this standard, all financial instruments are required to be measured at fair value on initial

recognition. Measurement in subsequent periods depends on whether the financial instrument has

been classified as fair value through profit or loss, loans and receivables, available for sale or financial

liabilities. Management determines the classification of financial assets and liabilities at initial

recognition and the classifications made for each financial instrument are indicated in the notes. A

description of the categories follows:

(i) Financial assets and liabilities at fair value through profit or loss

A financial asset or liability is classified in this category if acquired principally for the purpose of

selling or repurchasing in the short-term.

Derivatives are also included in this category unless they are designated as hedges. The Credit

Union uses derivatives in the form of interest rate swaps to manage risks related to interest rate

fluctuations and index linked purchase option agreements to offset the exposure to various

indices associated with index linked deposits. Transaction costs are expensed in the statement of

comprehensive income. All derivatives that have been classified as fair value through profit or

loss are included on the statement of financial position as derivative financial instrument assets

and liabilities. Gains and losses on re-measurement to fair value of derivatives are included in

loss (gain) on derivative financial instruments.



(4)

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable repayment

dates, usually with interest, that are not debt securities or instruments classified as fair value

through profit or loss on initial recognition. Loans and receivables are initially recognized at fair

value plus/minus, where appropriate, direct and incremental transaction costs. They are

subsequently valued at amortized cost using the effective interest method. Cash, loans to

members, liquidity reserve deposits, and loans to Mennonite Economic Development Associates

of Canada (MEDA) are classified as loans and receivables.

(iii) Available for sale

Available for sale assets are non-derivative financial assets that are designated as available for

sale or are not categorized into any of the other categories described above. They are initially

recognized at fair value including, where appropriate, direct and incremental transaction costs.

They are subsequently held at fair value with gains and losses arising from changes in fair value

being recognized in other comprehensive income.

Equity instruments including shares in Central 1, Oikocredit and CUCO Cooperative

Association, and the investment in Qtrade Canada Inc. are classified as available for sale.

Investments classified as available for sale which do not have a quoted market price in an active

market and whose fair value cannot be reliably measured, are measured at cost.

Objective evidence of impairment exists if there has been a significant or prolonged decline in the

fair value of the investment below its cost or if there is a significant adverse change in the market,

economic or legal investment in which the issuer operates. In the case of impairment, the

impairment loss is reported as a reduction in the carrying value of the investment and recognized

in the statement of comprehensive income.

(iv) Other liabilities

Other liabilities are non-derivative financial liabilities that are initially recognized at fair value

and are subsequently measured at amortized cost using the effective interest method. Members’

deposits, accrued interest payable, accounts payable and accrued charges, demand loan,

mortgage securitization liabilities, and liabilities qualifying as regulatory capital (investment,

owner and membership shares) are classified as other liabilities.

e) Comprehensive income

IAS 1 requires that a complete set of financial statements include a statement of other comprehensive

income (OCI). For the Credit Union, OCI represents the change in members’ equity during the year that

is attributable to unrealized gains and losses on financial assets classified as available for sale and

remeasurements of the present value of the post-employment obligation.



(5)

Consequently, the changes in these items during the year are recognized in the statement of

comprehensive income, while the cumulative changes in OCI are included in accumulated other

comprehensive income (AOCI), net of taxes, which is presented as part of members’ equity on the

statement of financial position.

f) Sale of receivables

The Credit Union periodically sells assets, such as agricultural loans, to other financial institutions to

manage its portfolio diversification risk. These transactions satisfy the requirements for derecognition

under IFRS and accordingly the agricultural loans sold are removed from the statement of financial

position. In these instances the contractual rights to receive the cash flows from the assets and

substantially all the risks and rewards associated with the assets are transferred to the purchasing

institution. A nominal administration fee, which is recorded as income when received, is paid to the

Credit Union each month.

g) Mortgage securitizations

As part of an ongoing program to manage liquidity, capital and interest rate risk, the Credit Union enters

into mortgage securitization transactions. These transactions allow for the packaging of insured

mortgage loan receivables into mortgage backed securities (MBS) and for the subsequent sale of these

MBS to unrelated third parties.

Securitization transactions are derecognized only when the contractual rights to receive the cash flows

from these assets have ceased to exist or substantially all the risks and rewards of the loans have been

transferred. If the criteria for derecognition has not been met, the securitization is reflected as a

financing transaction and the related liability is initially recorded at fair value and subsequently

measured at amortized cost, using the effective interest rate method.

Costs related to the issuance of MBS are amortized over the life of the issue and are included in interest

expense.

h) Property and equipment

Property and equipment is stated at cost less accumulated amortization. Amortization is provided on

the straight-line method over the expected useful life of the assets as follows:

Assets Useful life

Buildings 40 years Leasehold improvements Term of lease Furniture and fixtures, and computer equipment 3-10 years

Land is not subject to amortization and is carried at cost.

Impairment reviews are performed when there are indicators that the net recoverable amount of an

asset may be less than its carrying value. The net recoverable amount is determined as the higher of an



(6)

asset’s fair value less cost to sell and value in use. An impairment loss is recognized in the statement of

comprehensive income when there is objective evidence that a loss event has occurred which has

impaired future cash flows of an asset. In the event that the value of previously impaired assets recovers,

the previously recognized impairment loss is recovered in the statement of comprehensive income at

that time.

An item of property and equipment is derecognized upon disposal or when no further economic benefits

are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the

difference between the net disposal proceeds and the carrying amount of the asset) is included in the

statement of comprehensive income in the period the asset is derecognized.

i) Derivative financial instruments

Derivative financial instruments are contracts that require or provide the opportunity to exchange

cash flows or payments determined by applying certain rates, indices or changes therein to notional

contract amounts. The Credit Union uses derivative financial instruments, primarily interest rate

swaps, in order to manage interest rate risk exposure. The Credit Union's policy is not to utilize

derivative financial instruments for speculative purposes.

Derivative financial instruments are carried at fair value and are reported in the statement of financial

position as derivative financial instrument assets, where they have a positive fair value, and as

derivative financial instrument liabilities, where they have a negative fair value. Changes in the fair

value of the derivative instruments are recognized in the statement of comprehensive income as net

unrealized loss (gain) on derivative financial instruments. The Credit Union does not apply hedge

accounting on its derivative portfolio.

j) Member entitlements

Member shares, owner shares and investment shares have certain characteristics which require them

to be classified as liabilities on the statement of financial position. Accordingly, any dividends

authorized on these shares are recorded as interest expense.

k) Foreign currency

Assets and liabilities denominated in foreign currency are translated to Canadian dollars at exchange

rates in effect at the statement of financial position date. Revenues and expenses are translated at

rates in effect at the time of the transactions. Foreign exchange gains and losses are included in other

revenue in the statement of comprehensive income.

l) Income taxes

The Credit Union uses the asset and liability method of accounting for income taxes. Under this

method, deferred tax assets and liabilities are recognized for the future tax consequences attributable

to differences between the financial statement carrying amounts of existing assets and liabilities and

their respective tax bases. Deferred tax assets and liabilities are measured using enacted or

substantively enacted tax rates expected to apply to taxable income in the years in which those



(7)

temporary differences are expected to be recovered or settled. The effect on deferred tax assets and

liabilities of a change in tax rates is recognized in income in the period that includes the date of

enactment or substantive enactment.

Deferred income tax assets are recognized to the extent that realization is considered more likely than

not.

m) Employee benefit plan

The Credit Union accrues its obligations under the post-retirement benefit plan and the related costs

and has adopted the following policies:

• The cost of the benefits earned by employees is actuarially determined using the projected

benefit method pro-rated on service and management’s best estimate of expected future

costs, discount rate and retirement ages of employees;

• The average remaining service period of the active employees covered by the benefit plan is

10.0 years.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions

are recorded in other comprehensive income with an immediate allocation to retained earnings. Past-

service costs are recognized immediately in income.

n) Leases

The Credit Union leases commercial property. The Credit Union, as a lessee, has determined, based on

an evaluation of the terms and conditions of the arrangements, that it does not obtain any of the

significant risks and rewards of ownership of these properties and therefore accounts for them as

operating leases. Payments made under operating leases are charged as an expense in the statement of

comprehensive income on a straight line basis over the period of the lease.

o) Standards not yet effective

Accounting standards that have been issued but are not yet effective are listed below. The Credit Union

will undertake a thorough assessment of the new requirements to determine the implications of these

standards.

IFRS 9, Financial Instruments, first issued in November 2009 with final version released in

July 2014 by the IASB, brings together the classification and measurement, impairment and

hedge accounting phases of the IASB’s project to replace IAS 39. IFRS 9 introduces a

principles-based approach to the classification of financial assets based on an entity’s business

model and the nature of the cash flows of the asset. All financial assets, including hybrid

contracts, are measured at fair value through profit or loss, fair value through OCI or amortized

cost. For financial liabilities, IFRS 9 includes the requirements for classification and

measurement previously included in IAS 39. IFRS 9 also introduces an expected loss

impairment model for all financial assets not at fair value through profit or loss. The model has



(8)

three stages: (1) on initial recognition, 12-month expected credit losses are recognized in profit

or loss and a loss allowance is established; (2) if credit risk increases significantly and the

resulting credit risk is not considered to be low, full lifetime expected credit losses are

recognized; and (3) when a financial asset is considered credit-impaired, interest revenue is

calculated based on the carrying amount of the asset, net of the loss allowance, rather than its

gross carrying amount. Finally, IFRS 9 introduces a new hedge accounting model that aligns

the accounting for hedge relationships more closely with an entity’s risk management activities.

The standard is effective for annual periods beginning on or after January 1, 2018.

IFRS 15, Revenue from Contracts with Customers, was issued in May 2014, which establishes

principles for reporting about the nature, amount, timing and uncertainty of revenue and cash

flows arising from an entity’s contracts with customers. The standard provides a single,

principles based five-step model for revenue recognition to be applied to all contracts with

customers. The standard is effective for annual periods beginning on or after January 1, 2018.

IFRS 16, Leases was issued in January 2016, which will replace IAS 17, Leases. The new

standard will be mandatorily effective for fiscal years beginning on or after January 1, 2019.

Earlier application is permitted. Under the new standard, all leases will be on the balance

sheet of lessees except those that meet limited exception criteria. As the Credit Union has

significant contractual obligations in the form of operating leases (note 16) under the existing

standard, there will be a material increase to both assets and liabilities upon adoption of the

new standard and material changes to the timing of recognition of expenses associated with the

lease arrangements.

4 Critical accounting estimates and judgments

The Credit Union makes estimates and assumptions about the future that affect the reported amounts of

assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and

other factors, including expectations of future events that are believed to be reasonable under the

circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in the statement

of comprehensive income in the period of the change, if the change affects that period only; or in the period

of the change and future periods, if the change affects both.

The estimates and assumptions that have a significant risk of causing material adjustment to the carrying

amounts of assets and liabilities within the next financial year are discussed below.

Fair value of financial instruments

The Credit Union determines the fair value of financial instruments that are not quoted in an active market,

using valuation techniques. Those techniques are significantly affected by the assumptions used, including

discount rates, fair value multipliers and estimates of future cash flows. In that regard, the derived fair value

estimates cannot always be substantiated by comparison with independent markets and, in many cases, may

not be capable of being realized immediately.



(9)

The methods and assumptions applied, and the valuation techniques used, for financial instruments that are

not quoted in an active market are disclosed in note 20.

Member loan loss provision

In determining whether an impairment loss should be recorded in the statement of comprehensive income

the Credit Union makes judgment on whether objective evidence of impairment exists individually for

financial assets that are individually significant. Where this does not exist the Credit Union uses its

judgment to group member loans with similar credit risk characteristics to allow a collective assessment of

the group to determine any impairment loss.

In determining the collective loan loss provision management uses estimates based on historical loss

experience for assets with similar credit risk characteristics and objective evidence of impairment. Further

details on the estimates used to determine the allowance for impaired loans collective provision are provided

in note 6.

5 Investments

2016$

2015$

Shares in Central 1 a) 6,747 6,407 Liquidity reserve deposit b) 62,985 58,016 CUCO Co-op Class B investment shares c) 1,582 1,788 Qtrade Canada Inc. d) 17,023 14,580 Oikocredit shares e) 3,355 4,026 Loans to MEDA f) 500 500

92,192 85,317

a) Shares in Central 1

As a condition of maintaining membership in Central 1, the Credit Union is required to hold an

investment in Central 1 shares as determined by the Central 1 Board of Directors from time to time.

Central 1 Class A shares are subject to an annual rebalancing mechanism based on credit union asset

growth and are issued and redeemable at par value. There is no separately quoted market value for

these shares; however, fair value is determined to be equivalent to the par value due to the fact that

transactions occur at par value on a regular and recurring basis. The Credit Union’s holding of

Central 1 Class A shares increased by $339,871 to $3,828,512 during 2016 as a combination of

Central 1 capital calls and rebalancing.



(10)

Central 1 Class E shares are issued with a par value however are redeemable at $2,918,500 at the option

of Central 1. There is no separately quoted market value for these shares and the fair value cannot be

measured reliably as the timing of redemption of these shares cannot be determined. Therefore, the

range of reasonable fair value estimates is significant and the probabilities of the various estimates

cannot be reasonably assessed. Class E shares are therefore recorded at cost of $2,918,500.

The Credit Union is not intending to dispose of any Central 1 shares as the services supplied by

Central 1 are relevant to the day to day activities of the Credit Union.

b) Liquidity reserve deposit

The Credit Union is required to maintain a liquidity reserve deposit with Central 1 equal to 6.00% of

the Credit Union’s total assets. The amount of the required liquidity reserve deposit is determined

monthly based on the amount of total assets in the previous month’s financial statements. The deposit

bears interest at fixed and variable rates set by Central 1 which averaged approximately 0.79%

(2015 - 0.96%), at year-end. Liquidity reserve deposits are consistent with a lending contract whereby

cash flows are advanced to Central 1 with a commitment to repay the Credit Union at a specified rate of

interest according to preset maturity dates.

c) CUCO Co-op Class B investment shares (formerly ABCP 2008 Limited Partnership investment)

As a pre-condition of Credit Union Central of British Columbia (CUCBC) acquiring Credit Union Central

of Ontario (CUCO), CUCO was required to divest itself of investments in certain third party asset-backed

commercial paper (ABCP). As a result, at a special general meeting held May 31, 2008, members of

CUCO approved a resolution to create a limited partnership, ABCP 2008 Limited Partnership (ABCP

LP), to acquire these investments. The funding which ABCP LP required in order to purchase these

investments from CUCO was provided by member Credit Unions of CUCO which were obligated to

provide their proportionate share of the funding in exchange for ownership units of ABCP LP. As at

July 1, 2008, the Credit Union had an investment of $4,069,626 in ABCP LP units designated as

available for sale.

Since the acquisition of the ABCP LP units the Credit Union has received distributions totalling

$4,102,590 (2015 - $3,861,882). These distributions have been recorded as a return of the initial capital

invested. Further, as a result of ongoing valuations the fair value of the investment has increased by a

total of $1,614,700 (2015 - $1,579,882).

On June 18, 2011 credit unions voted to approve a restructuring of CUCO as a regulated financial

institution under the Credit Unions and Caisses Popularies Act and its continuance as a cooperative

under the Canada Cooperatives Act under the name CUCO Co-operative Association (CUCO Co-op).

Also approved on June 18, 2011 was a motion to purchase the investment portfolio and certain other

assets and liabilities of ABCP LP. As a result, on August 31, 2011 the ABCP LP assets were sold to CUCO

Co-op in exchange for Class B investment shares.



(11)

On September 2, 2011, ABCP LP distributed to each credit union such Credit Union’s proportionate

share of CUCO Co-op Class B investment shares and ABCP LP was subsequently dissolved. There was

no change to the proportionate share of the Credit Union’s underlying ABCP assets now owned by CUCO

Co-op as a result of this transaction. The Credit Union maintains its proportionate share of voting rights

in CUCO Co-op, through its holding of membership shares obtained in the restructuring.

d) Qtrade Canada Inc.

On April 1, 2010 the Credit Union entered into a transaction with Qtrade Canada Inc. (QCI). According

to the terms of the transaction agreement the Credit Union exchanged all of its shares in Meritas

Financial Inc. (MFI), a 65.7% owned subsidiary company, for 1,546,166 shares in QCI valued at

$14,419,646. Under IFRS this available for sale investment must be carried at fair value.

As at December 31, 2016 the Credit Union’s shares in QCI are valued at $17,023,287 (2015 -

$14,580,345).

The cumulative components of the Credit Union’s investment in QCI from prior to the MFI/QCI

transaction date (April 1, 2010) to present are as follows:

$ $Net book value of MFI shares at transaction date

(April 1, 2010) 1,207 Gain recognized on QCI / MFI transaction 13,213 Unrealized fair value gain on QCI 2,603 15,816

December 31, 2016 fair value 17,023



(12)

e) Oikocredit shares

Oikocredit, Ecumenical Development Cooperative Society U.A. (Oikocredit) provides financial services

and supports organizations internationally to improve the quality of life of low-income people and

communities. Oikocredit mobilizes the capital needed to carry out its mission by issuing shares to its

member organizations.

The Credit Union supports this work through a program of matching specially branded Credit Union

member owned term deposits with Credit Union owned investments in Oikocredit shares.

The Credit Union’s holding of these shares was $3,354,788 at December 31, 2016 (2015 - $4,026,217).

Oikocredit shares are classified as available for sale. Fair value is determined to be equivalent to par

value due to the fact that share issue and redemption transactions occur at par value on a regular and

recurring basis.

f) Loans to MEDA

MEDA is an international economic development organization whose mission is to create business

solutions to poverty. The Credit Union supports this work through the provision of fixed term

promissory notes to the organization.

Loans to MEDA, in the amount of $500,000 (2015 - $ 500,000), have been classified as loans and

receivables.



(13)

6 Loans to members

a) An analysis of the Credit Union’s loan portfolio and related allowance for impaired loans is as follows:

2016Gross

amount $

Allowance $

Carrying amount

$

Residential 313,991 (70) 313,921 Personal 9,768 (83) 9,685 Agricultural 482,486 (100) 482,386 Commercial 148,046 (685) 147,361

954,291 (938) 953,353

2015Gross

amount $

Allowance $

Carrying amount

$

Residential 294,892 (89) 294,803 Personal 11,585 (93) 11,492 Agricultural 426,280 (251) 426,029 Commercial 133,843 (217) 133,626

866,600 (650) 865,950

The Credit Union has an agreement in place to sell loans to Farm Credit Canada (FCC). The Credit

Union continues to service all of these loans as an agent for FCC. Cumulatively, the balance of loans

that continue to be serviced by the Credit Union on behalf of FCC is approximately $4,953,620

(2015 - $13,087,043).

During the year, the Credit Union sold $nil (2015 - $nil) of agricultural loans to FCC.

The Credit Union is holding security in the form of member deposits in the estimated amount of

$4,677,045 (2015 - $5,864,163) for loans to members.



(14)

b) Impaired loans

An analysis of impaired loans and the related allowance for impaired loans is as follows:

2016Gross

impaired loans

$

Collective provision

$

Individual specific

provision $

Residential 1,170 (55) (15)Personal 144 (7) (76)Agricultural 2,144 (100) - Commercial 2,749 (129) (556)

6,207 (291) (647)

2015Gross

impaired loans

$

Collective provision

$

Individual specific

provision $

Residential 1,479 (89) - Personal 113 (7) (86)Agricultural 2,937 (176) (75)Commercial 317 (19) (198)

4,846 (291) (359)

The Credit Union is holding security against the impaired loans in the estimated amounts of $73,000

(2015 - $21,500) for personal loans, $1,259,000 (2015 - $1,800,000) for residential mortgages,

$3,265,000 (2015 - $4,458,200) for agricultural loans, and $2,242,000 (2015 - $390,000) for

commercial loans.



(15)

c) Allowance for impaired loans

The following table analyzes changes in the Credit Union’s allowance for impaired loans:

2016

Beginning balance

$

Provision (expense) recovery

$ Write-offs

$

Ending balance

$

Residential (89) 19 - (70)Personal (93) (19) 29 (83)Agricultural (251) 67 84 (100)Commercial (217) (479) 11 (685)

(650) (412) 124 (938)

2015

Beginning balance

$

Provision (expense) recovery

$ Write-offs

$

Ending balance

$

Residential (214) 53 72 (89)Personal (107) (25) 39 (93)Agricultural (159) (91) (1) (251)Commercial (386) 132 37 (217)

(866) 69 147 (650)



(16)

d) Loan loss provisions

The Credit Union has determined the likely impairment loss on loans which have not maintained loan

repayments in accordance with the loans contract, or where there is other evidence of potential

impairment such as industrial restructuring, job losses or economic circumstances. In identifying the

impairment likely from these events the Credit Union estimates the potential impairment using the

loan type, industry, type of loan security, the length of time the loans are past due and the historical

loss experience. The circumstances may vary for each loan over time resulting in higher or lower

impairment. The methodology and assumptions used for estimating future cash flows are reviewed

regularly to reduce any differences between loss estimates and actual loss experience.

For purposes of the collective provision, loans are classified into separate groups with similar risk

characteristics, based on the type of product and type of security.

The following table identifies the portion of the Credit Union's loan portfolio which is past due but not

considered impaired. For each loan type and aging category, carrying value of the loan and the value of

security held have been presented.

2016

Aged loans, past due, not impaired Days

past due

Carryingamount

$ Security held

$

Residential 30-60 225 278 61-80 271 300

91-120 - - >121 - -

Personal 30-60 1 - 61-90 47 35

91-120 - - Agricultural 30-60 100 258

61-90 7 - 91-120 - -

>121 300 477 Commercial 30-60 3 -

61-90 - -

954 1,348



(17)

e) The following table analyzes the Credit Union’s loan portfolio by maturity date.

Variable rates

$

Fixed rates less

than 1 year

$

Fixed rates 1-5

years $

2016Total

$

2015 Total

$

Total loans 338,343 179,827 436,121 954,291 866,600

Average effective yield 3.47% 3.67% 3.47% 3.51% 3.63%

7 Property and equipment

The movements in property and equipment were as follows:

Land

$

Buildings

$

Leasehold

improvements

$

Computer

$

Furniture

and fixtures

$

Total

$

Cost

Balance on January 1, 2015 777 784 3,025 856 1,155 6,597 Additions - - 3 478 444 925 Disposals - - (11) (325) (4) (340)

Balance on December 31, 2015 777 784 3,017 1,009 1,595 7,182 Additions - 563 25 209 517 1,314 Disposals - - (52) (209) (163) (424)

Balance on December 31, 2016 777 1,347 2,990 1,009 1,949 8,072

Accumulated amortization

Balance on January 1, 2015 - 373 548 399 354 1,674 Amortization - 22 309 265 145 741 Disposals - - (11) (323) (4) (338)

Balance on December 31, 2015 - 395 846 341 495 2,077 Depreciation expense - 26 301 299 206 832 Disposals - - (52) (209) (163) (424)

Balance on December 31, 2016 - 421 1,095 431 538 2,485

Net book value

December 31, 2015 777 389 2,171 668 1,100 5,105 December 31, 2016 777 926 1,895 578 1,411 5,587

Amortization expense of $831,738 (2015 - $740,721) is included in occupancy expense in the statement of

comprehensive income.



(18)

8 Members’ deposits

The following table provides a breakdown and analysis of the Credit Union’s member deposit portfolio by

maturity date:

Variable rates

$

Fixed rates less

than 1 year

$

Fixed rates 1 - 5

years $

2016 Total

$

2015 Total

$

Chequing and savings accounts 317,970 - - 317,970 295,038 Term deposits - 166,309 174,163 340,472 317,303 RRSP and other registered plans 11,261 41,257 67,258 119,776 122,729 RRIF 1,969 15,951 42,948 60,868 54,306 Tax free savings accounts 13,975 27,587 38,087 79,649 69,344

Total 345,175 251,104 322,456 918,735 858,720

Average effective interest rates 0.45% 1.75% 2.12% 1.39% 1.48%

Included in chequing and savings accounts is $368,625 (2015 -$443,421) related to the provision for

patronage refunds. The balance of the provision for patronage refunds is included in liabilities qualifying as

regulatory capital as described in note 11.

Average effective interest rates are based on book values of deposits and contractual interest rates. All types

of member deposits have been designated as other liabilities and are carried at amortized cost using the

effective interest method.

Concentra Trust Company of Canada acts as trustee in connection with Registered Plans.

9 Demand loan

The Credit Union has access to a line of credit facility totalling $2,500,000 and U.S. $250,000 at Central 1.

These facilities are included in demand loan facilities totalling $47,350,000 (2015 - $32,750,000) with other

interest rates to be agreed upon when amounts are drawn. The facilities are secured by an assignment of

loans to members and a general security agreement covering all assets of the Credit Union. At year-end, the

Credit Union has drawn $9,718,312 under its line of credit facility (2015 - $4,643,306) and has borrowings of

$16,000,000 under the demand loan facility (2015 - $6,000,000).

The Credit Union also has access to a standby letter of credit line of $700,000 (2015 - $700,000) utilizing

$530,705 (2015 - $671,992).

In the ordinary course of business, the Credit Union is temporarily allowed to exceed the maximum line of

credit facility due to timing of clearing outstanding deposits and cheques.



(19)

10 Post retirement employee future benefits

The Credit Union sponsors a post-retirement benefit plan providing health, dental and life insurance

coverage to eligible employees. The Credit Union’s post retirement benefit plan is administered by Great

West Life Assurance Company.

Actuarial valuations of the plan are made based on market-related discount rates. The following table

presents information related to the Credit Union’s benefit plan as at December 31, including the amounts

recorded in accounts payable and accrued charges on the statement of financial position and the components

of the net benefit plan expense:

2016$

2015$

Accrued benefit obligation

Balance - Beginning of year 2,464 2,231 Current service cost 152 147 Interest cost 108 97 Benefits paid (18) (11)

Remeasurements: Loss from change in assumptions - -

Balance - End of year, included in accounts payable and accrued charges 2,706 2,464

There are no separate plan assets.

The Credit Union’s benefit plan expenses, included in personnel expenses in statement of comprehensive income were as follows:

Current service cost 152 147 Interest cost 108 97

Net benefit plan expense 260 244



(20)

Through its post employment medical plan, the Credit Union is exposed to a number of risks, the most

significant of which are detailed below:

Changes in bond yields - a decrease in corporate bond yields will increase plan liabilities

Trend rates - an increase in expected health care and dental care costs will increase plan liabilities

The assumptions used in the measurement of the accrued benefit obligation are as follows:

The discount rate was established at 4.25% (2015 - 4.25%). The rate of increase in expected health care

rates is presumed to be 8.0% and this rate will reduce linearly to 5% after 6 years. Dental care costs

are presumed to increase 5.00% per year.

Sensitivity of assumptions

2016$

2015$

Liability change resulting from:

1% increase in trend rate 471 429 1% decrease in trend rate (353) (321)1 year increase in retirement age (52) (47)1% increase in discount rate (498) (453)1% decrease in discount rate 670 610

Each sensitivity analysis above is based on changing one assumption while holding all other assumptions

constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

When calculating the sensitivity of the defined benefit obligation to variations in significant actuarial

assumptions, the same method (present value of the defined benefit obligation calculated with the projected

benefit method at the end of the reporting period) has been applied as for calculating the liability recognized

in the statement of financial position.

The most recent actuarial valuation was prepared as at December 31, 2014.

The weighted average duration of the defined benefit obligation is 20.2 years.



(21)

11 Liabilities qualifying as regulatory capital

2016$

2015$

Investment shares, Series 2005 - 19,625,073 (2015 - 19,235,393) 19,625 19,235 Owner shares - 16,931,377 (2015 - 17,056,237) 16,931 17,056 Provision for the issuance of owner shares - 428,612 (2015 - 520,655) 429 521 Member shares - 89,488 (2015 - 86,345) 447 432

37,432 37,244

a) Investment shares

An unlimited number of non-voting, non-cumulative Class B special shares have been authorized with a

stated value of $1 per share. The investment shares provide for redemption, at the option of the holder,

five years following issuance. These special shares are issuable in series and rank ahead of owner

shares and member shares. Investment shares form part of regulatory capital and have been designated

as other liabilities. A return of 2.50% was declared and accrued.

b) Owner shares

An unlimited number of Class A non-voting, non-cumulative patronage shares have been authorized

with a stated value of $1 per share. Owner shares, which represent cumulative patronage refunds for

existing members, form part of regulatory capital. These shares rank ahead of member shares and are

payable to members upon termination of membership, or at the discretion of the Board of Directors if

the shares have been outstanding for five years or more. Owner shares have been designated as other

liabilities.

It is the Credit Union’s practice at year end to accrue a provision for the issuance of owner shares in

February of the following year. This provision is presented as a liability qualifying as regulatory capital.

c) Member shares

An unlimited number of voting, non-cumulative member shares have been authorized with a stated

value of $5 per share. Member shares are the minimum share deposit requirement for membership and

form part of regulatory capital. These shares are non-interest bearing and are payable to members

upon termination of membership. Member shares have been designated as other liabilities.



(22)

Opening balance

2016 $

Issued $

Redeemed $

Closing balance

2016 $

Investment shares 19,235 390 - 19,625 Owner shares 17,577 428 (645) 17,360 Member shares 432 43 (28) 447

Opening balance

2015 $

Issued $

Redeemed $

Closing balance

2015 $

Investment shares 19,495 280 (540) 19,235 Owner shares 17,611 521 (555) 17,577 Member shares 418 38 (24) 432

12 Capital and liquidity management

The Credit Unions and Caisses Populaires Act of Ontario (“the Act”) requires Credit Unions to maintain

minimum levels of liquidity and regulatory capital. Liquidity is measured as cash resources and liquidity

term deposits, expressed as a percentage of the total of members’ deposits and demand loan. As per Credit

Union and Caisses Populaires Act regulatory capital must not total less than 4.00% (2015 - 4.00%) of total

assets, and not less than 8.00% (2015 - 8.00%) of risk-weighted assets. Regulatory capital, comprised of

Tier 1 and Tier 2 capital, includes investment shares, owner shares, member shares, retained earnings and

accumulated other comprehensive income, adjusted for certain items under the Regulations to the Act. In

the calculation of regulatory capital as a percentage of total assets, total assets are also adjusted for certain

items under the Regulations to the Act. In accordance with the Act, no payments shall be made from

regulatory capital that would cause regulatory capital to fall below regulatory requirements. Liquidity and

regulatory capital as a percentage of assets are as follows:

Required 2016 2015

Liquidity 6 - 9% 7.78% 7.69%

Regulatory capital As percentage of total assets 4.00% 7.73% 8.24% As percentage of risk-weighted assets 8.00% 12.14% 12.88%

$ $

Tier 1 Capital 74,481 74,180 Tier 2 Capital 8,190 6,103

Total regulatory capital 82,671 80,283



(23)

The Credit Union’s liquidity plan is designed to ensure that the Credit Union will be able to pay obligations

when they fall due, be able to repay depositors when funds are withdrawn, and be able to meet commitments

to provide loans to members. Under normal operating conditions, Board policy requires management to

manage liquidity, inclusive of amounts borrowed, in the range of 6.00% to 9.00% and undertake remedial

action if results consistently fall outside of this desired range.

The Credit Union met its regulatory liquidity requirements as at and during the year ended

December 31, 2016 and exceeded the minimum requirements of the Act and Regulations regarding

regulatory capital as at December 31, 2016.

Beyond the regulatory requirements outlined above, the Board has established even higher targets with

respect to regulatory capital which it requires management to attain as it undertakes its responsibilities on

behalf of the Board.

The Credit Union’s capital management plan is designed to establish a strong base for future growth, the

payment of dividends and member patronage refunds, as well as provide a cushion in the event of market

volatility. By Board policy, the Credit Union is to attain a regulatory capital as a percentage of total assets of

7.50% and 11.00% as a percentage of risk-weighted assets.

13 Required disclosures under the Act and related party transactions

a) Outstanding loans to key management personnel, their spouses, dependants, children and related

corporations amounted to $4,764,251 (2015 -$4,557,885). There was no allowance for impaired loans

or provisions for loan losses required in respect of these loans.

Outstanding deposits from key management personnel, their spouses, dependants, children and related

corporations amounted to $2,519,278 (2015 - $2,509,869).

b) Remuneration paid to directors of the Credit Union is $91,855 (2015 - $85,260). Other expenses of the

Board amounted to $8,200 (2015 - $8,300).

c) The following information relates to employees of the organization that earned in excess of $150,000 in

combination of salary, benefits, and bonus.

Name Position Salary $

Benefits $

Bonus $

Total $

Brent Zorgdrager Chief Executive Officer 276 19 77 372

John Klassen Chief Financial Officer 153 11 34 198

Mary Ann Mooney Chief Operating Officer 150 11 33 194

Nolan Andres Chief Information Officer 134 10 22 166



(24)

d) Compensation of key management personnel

Key management personnel of the Credit Union include all directors, officers and key management.

The summary of compensation for key management personnel is as follows:

2016$

2015$

Salaries and other short-term employee benefits 1,021 957 Other long-term benefits 59 52 Bonus 196 142

1,276 1,151

14 Patronage refund

The patronage refund is authorized by the Board of Directors and is allocated to members in two ways.

Firstly, members were allocated a dividend of 0.75% (2015 - 0.83%) on their December 31, 2016 owner

shares. Secondly, members received an allocation based on the volume of business conducted with the

Credit Union during the year. The patronage refund is classified as part of interest expense in the statement

of comprehensive income.

15 Income taxes

a) Income tax expense is calculated as follows:

2016$

2015$

Earnings before income taxes 148 3,529 Combined Canadian federal and provincial income tax rate

applicable to the Credit Union 18.6% 17.9%

Income taxes based on combined federal and provincial income tax rate 28 632

Differences from statutory rate: Other (8) (22)

20 610

Provision for income taxes Current 100 600 Deferred (80) 10

20 610



(25)

b) Deferred income taxes resulted from the following:

2016$

2015$

Deferred income tax asset arising from the following: Property and equipment 128 100 Allowance for impaired loans 69 61 Post retirement employee future benefit plan 528 481 Other 9 12

734 654

Deferred income tax liability arising from the following: Net gain on CUCO Co-op Class B investment shares (148) (144)

Deferred tax asset: To be recovered after more than 12 months 665 593 To be recovered within 12 months 69 61

734 654 Deferred tax liability:

To be recovered after more than 12 months (148) (144)

Net deferred tax asset 586 510



(26)

Opening

balance

January 1,

2016

$

Recognized in

statement of

comprehensive

income

$

Recognized in

other

comprehensive

income (loss)

$

Closing

balance

December 31,

2016

$

Deferred tax asset Property and equipment 100 28 - 128 Allowance for impaired loans 61 8 - 69 Post retirement employee future benefit plan 481 47 - 528 Other 12 (3) - 9

654 80 - 734

Deferred tax liability Net gain on CUCO Co-op Class B investment

shares (144) - (4) (148)

Net deferred tax asset (liability) 510 80 (4) 586

Opening

balance

January 1,

2015

$

Recognized in

statement of

comprehensive

income

$

Recognized in

other

comprehensive

income (loss)

$

Closing

balance

December 31,

2015

$

Deferred tax asset Property and equipment 136 (36) - 100 Allowance for impaired loans 78 (17) - 61 Post retirement employee future benefit plan 435 46 - 481 Other 15 (3) - 12

664 (10) - 654

Deferred tax liability Net gain on CUCO Co-op Class B investment

shares (134) - (10) (144)

Net deferred tax asset (liability) 530 (10) (10) 510



(27)

c) Tax amounts related to other comprehensive income (loss) are as follows:

2016

Gross $

Tax $

Net of tax $

Net change in unrealized gains and losses on investments designated as available for sale 2,478 (408) 2,070

2015

Gross $

Tax $

Net of tax $

Net change in unrealized gains and losses on investments designated as available for sale (790) 150 (640)

16 Commitments and contingencies

a) Lease commitments

The minimum annual aggregate rental commitment for office premises exclusive of municipal tax

increases and other occupancy charges is as follows:

2016$

2015$

Less than 1 year 839 818 Between 1 and 5 years 2,694 2,967 More than 5 years 664 1,231

Total 4,197 5,016

Lease expense for the year, included in occupancy expense in the statement of comprehensive income

totalled $944,129 (2015 - $942,254).



(28)

b) Members’ loans

The Credit Union has made commitments to members for loans of approximately $61,063,843

(2015 - $75,066,480) which have not been disbursed by December 31, 2016. In addition, unutilized

portions of lines of credit extended to members at December 31, 2015 amounted to approximately

$186,188,695 (2015 - $178,908,000).

The Credit Union, in the course of its operations, is subject to lawsuits. As a policy, the Credit Union will

accrue for losses in instances where it is probable that liabilities will be incurred and where such liabilities

can be reasonably estimated.

17 Pension plan

The Credit Union has a defined contribution pension plan for qualifying employees. The Credit Union

matches employee contributions up to 7% of the employee’s salary. The expense and payments for the year

ended December 31, 2016 were $621,164 (2015 - $611,962). The Credit Union has no further liability or

obligation for future contributions to fund future benefits to plan members.

18 Derivative financial instruments

a) Index-linked purchase option agreements

Included in term deposits, RRSPs and tax free savings accounts are a total of $2,397,171

(2015 - $3,591,735) of index-linked deposits. The index-linked deposits are for a three or five year

period with the return based on the performance of various stock market indices.

The Credit Union has entered into purchase option agreements with Central 1 (notional amount

$2,407,569 (2015 - $3,747,410) to offset the exposure to the various indices associated with these

products, whereby the Credit Union pays Central 1 a fixed amount of interest at the start of the contract

based on the face value of the index-linked deposits sold. At the end of the three or five year term,

Central 1 pays to the Credit Union an amount equal to the amount that will be paid to the depositor

based on the performance of the particular indices.

The purpose of these purchase option agreements is to provide an economic hedge against market

fluctuations. These agreements have fair values that vary based on changes in various indices. The fair

value of these purchase option agreements included in other assets, amounted to $300,338 at

December 31, 2016 (2015 - $272,563). The fair value of the options embedded in the index-linked

deposits included in members’ deposits, amounted to $300,338 December 31, 2016 (2015 - $272,563).



(29)

b) Interest rate swaps

The Credit Union enters into interest rate swap agreements in order to provide an economic hedge

against exposure to interest rate fluctuations. At December 31, 2016, the Credit Union was party to nine

interest rate swap agreements with Central 1. The agreements in aggregate represent a notional

principal amount of $318,294,000 which is used as the basis for determining payments under the

contracts and is not actually exchanged between the Credit Union and Central 1, its counterparty.

Under the term of the agreements, the Credit Union has contracted with the counterparty to pay interest

at a variable rate to be re-priced monthly or quarterly, while receiving interest at a fixed rate on the

notional principal amount.

These derivative instruments are recorded in the statement of financial position at fair value. Interest

rate swaps have a fair value that varies based on the particular contract, considering such factors as the

notional value, the term to maturity, and change in interest rates. At December 31, 2016, the fair value

of these agreements was an asset of $1,737,000 (2015 - $3,071,002). Included as components of gain on

derivative financial instruments in the statement of comprehensive income is net interest revenue on

interest rate swap transactions of $1,215,775 (2015 - $958,184) and net unrealized gains on interest rate

swap transactions of $(1,334,455) (2015 - $1,770,849).

Notional amount $ Maturity date Paying rate

Receiving rate

% Fair value

$

75,000 January 16, 2017 3 month CDOR 1.85 29 50,000 January 24, 2017 3 month CDOR 1.84 136 75,000 January 12, 2018 3 month CDOR 2.22 915 50,000 January 15, 2018 3 month CDOR 2.29 639 5,500 January 30, 2018 3 month CDOR 0.86 (7)5,000 February 10, 2017 3 month CDOR 0.77 (1)5,594 January 29, 2018 3 month CDOR 0.81 2 2,200 March 2, 2018 3 month CDOR 0.82 1

50,000 December 31,2018 3 month CDOR 1.28 23

318,294 1,737

19 Mortgage securitizations

The following table summarizes the carrying and fair values of assets of the Credit Union that have been

securitized and sold by the Credit Union to third parties as well as the carrying and fair values of the

corresponding mortgage securitization liabilities.



(30)

Carrying value

$ Fair value

$

Securitized mortgages sold as NHA MBS 28,613 28,650

Principal payments to be applied (included in cash) 140 140

Total designated assets 28,753 28,790

Mortgage securitization liabilities 28,751 28,790

Net amount 2 -

All mortgages securitized by the Credit Union are required to be fully insured prior to sale and therefore give

rise to minimal credit risk. However, the Credit Union remains exposed to interest rate risk, timely payment

and prepayment risk associated with the underlying assets. Accordingly, the assets, liabilities, revenues and

expenses have not been derecognized and the transactions are accounted for as secured financing

transactions in the Credit Union’s balance sheet and statement of comprehensive income.

20 Fair value of financial instruments

The fair values of the Credit Union’s financial instruments were estimated using the valuation methods and

assumptions described below. Since many of the Credit Union’s financial instruments lack an available

trading market, the fair values represent estimates of the current market value of instruments, taking into

account changes in interest rates that have occurred since their origination. Due to the use of subjective

assumptions and uncertainties, the fair value amounts should not be interpreted as being realizable in an

immediate settlement of the instruments.

Fair values of floating rate loans and deposits approximate book value as the interest rates on these

instruments automatically re-price to market and the spread remains appropriate. Fixed rate loans are

valued by discounting the contractual future cash flows at current market rates for loans with similar credit

risks. Fixed rate deposits are valued by discounting the contractual future cash flows using market rates

currently being offered for deposits with similar terms. A credit valuation adjustment is applied to the

calculated fair value of uninsured deposits to account for the Credit Union’s own risk.

Derivative financial instruments are recorded at fair value in the statement of financial position. The fair

value is determined based on prevailing market rates and notional value.



(31)

The fair value for the Credit Union’s investments as detailed in note 5 is determined as follows.

• Membership shares in Central 1 and Oikocredit do not trade in a public market. Fair market value

approximates par value as the shares are subject to regular rebalancing across the membership.

• Liquidity reserve deposits and loans to MEDA are fair valued by discounting the contractual future

cash flows at current market rates of similar financial instruments with similar terms.

• Class E membership shares in Central 1 do not trade in a public market. Fair value cannot be

measured reliably, as disclosed in note 5 a).

• Investments in CUCO Co-op Class B investment shares are valued based on an independent

valuation undertaken by CUCO Co-op of the underlying ABCP assets.

• As shares in Qtrade Canada Inc. do not trade in a public market, fair market value is determined by

applying multipliers relating to EBITDA and to underlying assets associated with the major

operating lines of business of the company.

The fair value of investment, owner and membership shares approximate carrying value.

Fair value hierarchy

Assets and liabilities recorded at fair value in the statement of financial position are measured and classified

in a hierarchy consisting of three levels for disclosure purpose. The three levels are based on the priority of

the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted

prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable

inputs (Level 3). An asset or liability’s classification within the fair value hierarchy is based on the lowest

level of significant input to its valuation. The input levels are defined as follows:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted prices included in Level 1 that are observable either directly or

indirectly.

Level 3 Unobservable inputs that are supported by little or no market activity and are significant to

the estimated fair value of the asset or liabilities.



(32)

Estimated fair values of financial instrument assets and liabilities are described in the following table.

2016 2015

Fair valve

hierarchy

Carrying

value

$

Fair value

$

Carrying

value

$

Fair value

$

Recurring measurements:Financial assets

Shares in Central 1 Class A Level 2 3,829 3,829 3,489 3,489

Shares in Central 1 Class E - 2,918 n/a 2,918 n/a

CUCO Co-op Membership and Class B investment

shares Level 2 1,582 1,582 1,788 1,788

Investment in Qtrade Canada Inc. Level 3 17,023 17,023 14,580 14,580

Derivative financial instrument assets Level 2 1,737 1,737 3,071 3,071

Shares in Oikocredit Level 2 3,355 3,355 4,026 4,026

Fair values disclosed:Financial assets

Liquidity reserve deposits Level 2 62,985 63,086 58,016 58,286

Loans to MEDA Level 2 500 500 500 500

Loans to members Level 3 953,353 955,222 865,950 868,990

Financial liabilities

Deposits of members Level 3 918,875 921,556 858,720 862,321

Demand loan Level 2 25,718 25,719 10,643 10,643

Mortgage securitization liabilities Level 2 28,751 28,790 13,884 13,885

Investment shares Level 2 19,625 19,625 19,235 19,235

Owner shares Level 2 17,360 17,360 17,577 17,577

Member shares Level 2 447 447 432 432

Fair values for items that are short-term in nature are equal to book value. These include cash resources,

accrued interest payable, and accounts payable and accrued charges.

There were no transfers between level 1 and level 2 for the years ended December 31, 2016 and 2015. The

following table presents a reconciliation of Level 3 investments.

2016$

2015$

Balance beginning of the year 14,580 15,477 Gains (losses) recognized in other comprehensive income 2,443 (897)

Balance end of year 17,023 14,580



(33)

The Credit Union’s equity investment in QCI consists of 1,546,166 Class A non-voting shares. The fair value

of the shares held is derived using a valuation multiples model consistent with the 2013 transaction between

QCI and Desjardins Group. The significant unobservable inputs in the fair value measurement are multiples

applied to EBITDA, and to underlying assets. The estimated impact of a 10% change in the value of these

inputs, all other inputs being held constant, is $1,610,600 (2015 - $1,375,000).

Management believes that reasonably possible changes to the other unobservable inputs would not result in

a significant change in the estimated fair value.

21 Financial risk management

The Credit Union’s risk management policies are designed to identify and analyse risks, to set appropriate

risk limits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to-date

information systems. The Credit Union follows an enterprise risk management framework which involves

identifying particular events or circumstances relevant to its objectives, assessing them in terms of

probability and magnitude, determining a response strategy and monitoring progress. The Credit Union

regularly reviews its risk management policies and systems to take account of changes in markets, products

and emerging best practice.

Risk management is carried out by a number of delegated committees reporting to the Board of Directors.

The Board provides written principles for risk tolerance and overall risk management. Management reports

to the Board on compliance with the risk management policies of the Credit Union. In addition, the Credit

Union utilizes a variety of resources to undertake various internal audit activities and reports to the

responsible senior leader and Board the results of these activities.

Financial instruments comprise the majority of the Credit Union’s assets and liabilities. The Credit Union

accepts deposits from members at both fixed and variable rates for various periods and seeks to earn an

interest rate margin by investing these funds in high quality financial instruments - principally loans and

mortgages. The primary types of financial risk which arise from these activities are interest rate risk, credit

risk, liquidity risk, foreign exchange risk, and other price risk.



(34)

The following table describes the significant financial instrument activity undertaken by the Credit Union,

the risks associated with such activities and the types of methods used in managing those risks.

Activity Risks Method in Managing Risks

An imbalance in the amount of

variable rate loans to members

compared to variable rate

members’ deposits

Sensitivity to changes in interest

rates

Asset-liability matching, sales of

selected loan portfolios and periodic

use of derivatives

Index linked deposit products Sensitivity to changes in underlying

equity indices

Options are used to mitigate this

risk

Foreign currencies Sensitivity to changes in foreign

exchange rates

Asset-liability matching and

purchase or sale of US denominated

derivative instruments to eliminate

the unwanted risk

a) Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of the Credit Union’s financial

instruments will fluctuate due to changes in market interest rates. Fair value interest rate risk is the risk

that the value of a financial instrument will fluctuate because of changes in prevailing market interest

rates. Financial margin reported in the statement of comprehensive income may increase or decrease in

response to changes in market interest rates. Accordingly, the Credit Union sets limits on the level of

mismatch of interest rate re-pricing that may be undertaken, which is monitored by the Credit Union’s

management and reported to the Board which is responsible for managing interest rate risk.

In managing interest rate risk, the Credit Union relies primarily upon use of the asset-liability and

interest rate sensitivity models. Periodically, the Credit Union may enter into interest rate swaps to

adjust the exposure to interest rate risk by modifying the re-pricing of the Credit Union’s financial

instruments. The Credit Union has entered into two new interest rate swaps in 2016. The full extent of

the interest rate swaps which the Credit Union has in place are included in note 18 b).

Interest rate shock analysis is used to assess the change in value of the Credit Union’s financial

instruments when an immediate increase or decrease to interest rates is introduced and the resulting

changes in income are computed over a twelve month period. This shock analysis is calculated on a

monthly basis and is reported to the asset-liability committee (“ALCO”) and subsequently to the Board.

Based on current differences between financial assets and financial liabilities, the Credit Union

estimates that an immediate and sustained 50 basis point increase (decrease) in interest rates would

increase (decrease) net interest income for the year by approximately $81,000.

The ALCO also looks at other aspects of interest rate risk such as basis risk, which is the risk of loss

arising from changes in the relationship of interest rates which have similar but not identical



(35)

characteristics (for example the difference between prime rates and the Canadian Deposit Offering Rate)

and prepayment risk, which is the risk of loss of interest income arising from the early repayment of

fixed rate mortgages and loans, to ensure they are appropriate and takes actions to ensure these are

within acceptable levels.

The following schedule shows the Credit Union’s sensitivity to interest rate changes as at

December 31, 2016. Amounts with variable rates, or due or payable on demand, are classified as

maturing within less than one year, regardless of maturity. Member loans and deposits subject to fixed

rates are based on contractual terms. Amounts that are not interest sensitive have been grouped

together.

Assets $

Liabilities and

members’ equity

$

Interest rate swaps

$

Net asset/liability

gap $

Expected re-pricing or maturity date

Less than one year 564,812 (632,990) (188,294) (256,472)1 to 2 years 89,697 (129,055) 188,294 148,936 2 to 3 years 85,114 (94,158) - (9,044)3 to 4 years 142,071 (67,222) - 74,849 4 to 5 years or more 158,991 (59,005) - 99,986 Non-interest sensitive 29,440 (87,695) - (58,255)

-1,070,125 (1,070,125) - -

Interest sensitive assets and liabilities cannot normally be perfectly matched by amount and term to

maturity. One of the roles of a Credit Union is to intermediate between the expectation of borrowers

and depositors. The average rate of interest bearing assets is 3.34% and interest bearing liabilities is

1.39%.

b) Credit risk

Credit risk is the risk that a Credit Union member or counterparty will be unable to pay amounts in full

when due. Credit risk arises principally from lending activities that result in member loans and

advances and investing activities that result in investments in cash resources. Counterparty risk is also a

key consideration with respect to derivative contracts which the Credit Union enters into from time to

time with Central 1. Significant changes in the economy of Ontario or deteriorations in lending sectors

which represent a concentration within the Credit Union’s loan portfolio may result in losses that are

different from those provided for at the statement of financial position date. Management of credit risk

is an integral part of the Credit Union’s activities. Concentration of loans is managed by the

implementation of sectoral and member specific limits as well as the periodic use of syndications with

other financial institutions to limit the potential exposure to any one member. Management carefully

monitors and manages the Credit Union’s exposure to credit risk by a combination of methods.



(36)

The Credit Union maintains levels of borrowing approval limits and prior to advancing funds to a

member an assessment of the credit quality of the member is made. The Credit Union emphasizes

responsible lending in its relationships with members and establishes that loans are within the

member’s ability to repay, rather than relying exclusively on collateral.

At December 31, 2016, the classes of financial instruments for which the Credit Union is most exposed to

credit risk are as follows:

Credit risk exposure Outstanding

$

Investments and deposits 92,192 Loans to members 953,353 Derivative financial instruments 1,737

1,047,282

Beyond the credit risk associated with the above financial assets, the Credit Union is also exposed to

credit risk associated with undrawn lines of credit and undisbursed commitments to members for loans

as at year-end, as disclosed in note 16 b).

Loans to members

Loans to members consist of loans, some of which are supported by specific collateral such as residential

properties, and charges over business assets such as premises, inventory and accounts receivable. The

Credit Union maintains guidelines on the acceptability of specific types of collateral. Where significant

impairment indicators are identified, the Credit Union will take additional measures to manage the risk

of default, which may include seeking additional collateral. In the case of loans which are conventional

mortgages, the Board has established maximum loan to value (“Max. LTV”) ratios that cannot be

exceeded. The following chart gives a profile of these maximums and identifies the amount of

conventional mortgages for each loan portfolio that are subject to these maximums.

Portfolio Total loans

$

Conventional mortgage

loans $

Max. LTV %

Residential 313,991 265,462 80 Personal 9,768 - 80 Agricultural 482,486 375,456 75 Commercial 148,046 66,728 60 to 80

954,291 707,646



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The Credit Union’s lending (measured as a percentage of the total loan portfolio) is well diversified by

portfolio sectors as follows:

Board maximum

% 2016

% 2015

%

Residential No Limit 32.9 34.0 Personal No Limit 1.0 1.3 Agricultural 55.0 50.6 49.2 Commercial 20.0 15.5 15.5

Board policy also requires that the maximum combined exposure for total commercial and agricultural

lending (excluding institutional loans) be less than 58.0% of assets. At December 31, 2016, commercial

and agricultural loan exposure on this basis was 56.45%.

Furthermore, within the above noted portfolio sectors, the Board has also established maximum loan

concentrations within industry sectors to ensure an appropriate diversification within these portfolios.

Actual concentrations by industry sector were well below the maximums at year-end.

The credit quality of the commercial and agricultural loan portfolio for those loans which are neither

past due nor impaired can be assessed by reference to the Credit Union’s internal risk rating system.

The Credit Union assesses the relative risk of the account using internal rating tools and taking into

account statistical analysis as well as the experience and judgement of the credit department. Loans

subject to rating are assigned to a risk score from 1 to 6 (1= low risk, 6= watch account). Loans are

regularly reviewed and updated as appropriate. With respect to the personal loan and residential

mortgage portfolio, procedures are in place to ensure the regular monitoring and review of loans in

addition to scheduled audits at the branch and head office levels.

Risk scale 2016

% 2015

%

1 - Low 10.95 10.76 2 - Medium low 32.87 33.12 3 - Medium 41.78 44.34 4 - Medium high 10.27 7.59 5 - High 1.74 1.54 6 - Watch 2.38 2.65

The carrying value of all loans restructured for members during the year, where a concession in terms

was granted with the loan remaining in good standing, is $11,546,502.



(38)

c) Liquidity risk

Liquidity risk is the risk that the Credit Union will encounter difficulty in raising funds to meet its

obligations to members and other creditors. To mitigate this risk, the Credit Union is required to

maintain, in the form of cash and liquidity reserve term deposits, a board policy set minimum liquidity

at all times, based on total members’ deposits and demand loan. At December 31, 2016, the Credit

Union’s liquidity exceeded the required level as disclosed in note 12. The Credit Union’s own risk

management policies require it to maintain sufficient liquid resources to cover cash flow imbalances, to

retain member confidence in the Credit Union and to enable the Credit Union to meet all financial

obligations. This is achieved through maintaining a prudent level of liquid assets, through management

control of the growth of the loan portfolio, sale of loan portfolios and asset-liability maturity

management techniques. Management monitors projections of the Credit Union’s liquidity

requirements on the basis of expected cash flows as part of its liquidity management. The Credit Union

also maintains a borrowing facility with Central 1 of $47,350,000 as an integral part of its liquidity

management strategy as disclosed in note 9.

The remaining contractual maturity of recognized financial liabilities is as follows.

Payableon

demand $

Less than 1 year

$

1 to 5 years

$

Morethan 5 years

$ Total

$

Deposits of members 345,175 251,104 322,456 - 918,735 Accrued interest payable - 5,247 - - 5,247 Accounts payable and accrued

charges - 6,300 - 2,706 9,006 Demand loan 25,718 - - - 25,718 Mortgage securitization

liabilities - 2,610 26,141 - 28,751 Operating lease commitments - 839 2,694 664 4,197

370,893 266,100 351,291 3,370 991,654

d) Foreign exchange risk

Foreign exchange risk is not considered significant at this time as the Credit Union does not engage in

any active trading of foreign currency positions or hold significant foreign currency denominated

financed investments for an extended period. The nature of the foreign exchange risk at the Credit

Union is that members can maintain US dollar deposit accounts and term deposits for which the Credit

Union will generally hold an equivalent amount US denominated assets in the form of cash and

investments. The Board has established that the Credit Union must ensure that the difference between

the US dollar denominated assets and liabilities must be less than $500,000. The Credit Union has

traditionally dealt with unwanted levels of foreign exchange risk by taking actions related to US

denominated assets and liabilities rather than entering into any foreign exchange derivative contracts.



(39)

The impact of a 10.00% strengthening (weakening) of the Canadian dollar against the US dollar is

considered insignificant.

e) Other price risk

The Credit Union is also exposed to other price risk on certain of its investments and deposits but given

the limited amount of these deposits and investments, the price risk exposure is considered

insignificant.

Aylmer 519.773.9559 | 877.773.6728 Elmira 519.669.1529 | 800.265.1994

Kitchener 519.576.7220 | 800.565.6801 Leamington 519.326.8601 | 888.285.5501

Milverton 519.595.8796 | 800.952.2217 Mount Forest 519.509.6728 | 888.509.6728

New Hamburg 519.662.3550 | 800.567.4047Waterloo 519.746.1770 | 800.265.4513

Check us out online! www.kindredcu.com

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@KindredCU

1.888.672.6728 | [email protected]

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