By Greg Nikkel
The Weyburn Credit Union had a profitable year of operation in 2015, with increases in their loan portfolio, assets and deposits, members and staff heard at their annual meeting held on Wednesday evening in the Community Room.
“Last year was a challenging year for the local economy,” noted CEO Don Shumlich in his address, pointing out profitability was good and capital levels increased over the year in spite of the economic factors.
He noted in satisfaction survey with both staff and customers, there were positive results, with staff satisfaction at a three-year high, and members happy with the level and quality of services provided.
Challenges being faced by the Credit Union include an increase in competition by both traditional competitors, and non-traditional competitors, such as Google and Apple, “and everybody is targetting the same customer, and they aren’t required to follow the same restrictions that we do.
This puts customers at risk because they don’t have the same high business standards that we offer.” Another challenge has been the increasing level of income taxes.
Shumlich said while the price of oil remained low throughout the year, the outlook for the agricultural industry is promising for 2016.
With advances in technology, there are new technological applications available for customers, such as making the website become a virtual branch, enabling customers to do much of their banking on-line.
Looking at the financial facts for the Credit Union’s past year, assets for the institution grew by 2.23 per cent, from $491 million to $502 million as of the end of December, with off-book assets at $207 million, up by 15.3 per cent from the previous year. The total assets under administration by the Credit Union is about $709 million, an increase of 5.7 per cent.
The Credit Union’s loan portfolio also grew to 4371 million, an increase of $19.1 million or 5.15 per cent, with the majority of the growth in consumer lending. The growth in agricultural mortgage lending also grew by 4.92 per cent.
Deposits from personal and commercial members were at $457 million, up from $450 million the previous year or 1.67 per cent.
The growth was seen in consumer and business chequing accounts, with moderate levels of cash flow in spite of the downturn in the oil industry.
The credit quality of the loan portfolio remained high, with a delinquency greater than 90 days at 0.12 per cent, which was up from 0.03 per cent, with the Credit Union holding no foreclosed or repossessed properties at the end of the year.
The Credit Union’s liquidity, which is measured by an operating liquidity ratio which considers projected cash inflows a percentage of projected cash outflows, was 75 per cent as of Dec. 31, compared to 128 per cent at the end of 2014.
Throughout 2015, loan demand was funded by excess liquidity levels from the prior year. The loan to asset ratio for 2015 increased to 74 per cent from the prior year amount of 72 per cent.
The total interest revenue for 2015 was $16.4 million, which is down by $522,580 from 2014. The lower interest revenue was due primarily to two cuts in the prime interest rate in 2015.
The Credit Union’s internal investment portfolio grew by $14 million to $109 million, and interest earned on these investments were also affected by the decreased market interest rates.
Operating expenses increased $833,695 or 7.69 per cent, with the two biggest expenses being in general business at $423,608, and personnel, at $310,876. The total comprehensive income for 2015 was $3.54 million, up from $3.42 million in 2014.
The Credit Union did not make rebate or bonus payments in 2015 due to a need to make meet capital requirement. This change is intended to be temporary, and the patronage program will resume when the board once again deems it is prudent to do so.
