1

Annual Information Meeting

Réunion d’information annuelle

March 26, 2015

Le 26 mars 2015

2

Paul Mullins Chair of the Board

Président du Conseil

3

Raymond Boucher Monique Tremblay

Steve BlakelyVice-Chair

DICO’s Board of DirectorsConseil d’administration de la SOAD

4

Don DalicandroGail Di Cintio

DICO’s Board of DirectorsConseil d’administration de la SOAD

5

2014 Highlights2014 – Faits saillants

All depositor funds were protected

Maintained confidence in the sector

Sector experienced solid growth and profitability

Consolidation continued – down by 10 credit unions

Continued to enhance prudential oversight processes Insurance fund at $185.1 M (73 bps of insured

deposits)

6

DICO Strategic ObjectivesObjectifs stratégiques de la SOAD

Proactive and balanced regulation and risk managementRéglementation proactive et équilibrée et la gestion des risques

Sound Corporate GovernanceBonne gouvernance corporative

Effective Public and Stakeholder Awareness Sensibilisation efficace du public et des intervenants

Strong PartnershipsPartenariats solides

7

Legislative and Mandate ReviewsExamens du mandat et des mesures législatives

Legislative Review Initiated November 2014 Consultations Recommendations Fall 2015

Mandate Review Initiated February 2015 Consultations Recommendations Winter 2015

8

DICO InitiativesInitiatives de la SOAD

Focus on Governance: ICAAP and Stress Testing Corporate Governance Director Training, Qualification and Competency

Expectations and Assessment

Deposit Insurance Reserve Fund (DIRF) Recoveries on past claims Revised Differential Premium System 2015 DIRF target – 100 bps of insured deposits in 2020

9

DICO Initiatives (con’t) Initiatives de la SOAD (suite)

Proactive risk based prudential regulation Establishing guidance and expectations Examining regularly and providing feedback Avoiding potential losses by intervening early Assisting boards in long term strategic planning

Working with stakeholders

Continued focus on credit union sustainability & sector stability

10

Beryl RobertoDICO OmbudsmanOmbudsman de la SOAD

Ombudsman’s ReportRapport de l’ombudsman

11

2014 Overview2014--Vue d’ensemble

Andy PoprawaPresident & CEO

Président et chef de la direction

12

Sector Consolidation 1979 - 2014Consolidation du secteur 1979 - 2014

0

50

100

150

200

250

300

350

400

0

150

300

450

600

750

900

1050

1200

1979 1984 1989 1994 1999 2004 2009 2014

$ m

illio

ns

Num

ber o

f cre

dit u

nion

s

Number of credit unions Average Assets

13

Number of Credit Unions/Caisses Populaires

Assets($ Billions)

ROA(bps)

British Columbia 43 61.5 35

Alberta 32 23.1 34

Saskatchewan 51 19.7 70

Manitoba 36 24.1 54

Québec 344 148.0 87

Ontario 117 42.5 35

Other ProvincesAutres provinces

14

Sector PerformanceRendement du secteur

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Retu

rn on

Ass

ets

Tota

l Ass

ets

Total Assets Return on Assets

15

Ontario Sector Profile 4Q14Profil du secteur de l’Ontario au 4T14

Credit Unions

Caisses Populaires Total Ontario

Number of Institutions 89 28 117

Assets ($Billions) $ 36.4 $6.0 $42.4Capital (% assets) 6.71% 8.75% 7.00%ROA (bp % assets) 28 76 35ROA before dividends 38 82 44Efficiency Ratio 83.7% 69.5% 81.4%

16

Capital Composition 2002 - 2014 Composition du capital entre 2002 – 2014

17

Regulation and MonitoringRéglementation et surveillance

Guy HubertVice President, Regulation and Risk ManagementVice-président, Réglementation et Gestion des risques

18

Sector Profile by Risk Level (% of assets)

Profil du secteur selon le niveau de risque (% de l’actif)

19

Examination Findings: By-law #5Résultats des examens : Règl. No 5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< $10M $10M - $100M $100M -$500M

$500M - $1B > $1B

20

Examination Findings: By-law #5 (con’t)Résultats des examens : Règl. No 5 (suite)

Governance: Board Directors Training & Qualification Overall adequate

Governance: Audit Committee Enterprise Risk Management Overall adequate Internal Audit Needs Improvement

Governance: Management Commercial Lending Improving Capital & Liquidity management Needs Improvement

21

Intervention Levels by Program Niveaux d’intervention selon le programme

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012 2013 2014Watchlist Supervision Administration Liquidation

22

Number of Failed Credit UnionsNombre de défaillances

0

5

10

15

20

25

23

Trend in Reserve Fund Évolution du Fonds de réserve

-0,80%

-0,60%

-0,40%

-0,20%

0,00%

0,20%

0,40%

0,60%

0,80%

1,00%

1,20%

1,40%

-200

-150

-100

-50

0

50

100

150

200

250

300

350

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

DIRF ($) DIRF as a % of Insured Deposits

$m

illio

ns

Perc

enta

ge

DIRF Projections ($) DIRF Projections as a % of Insured Deposits

DIRF Target of 100 bps projected to be reached in 2020

24

Losses to the Fund(Severity - By Year $M)

Pertes au Fonds(Gravité - par année en millions $)

-70

-60

-50

-40

-30

-20

-10

0

10

20

■ Loss to the Fund ■ Recovery to the Fund

25

Deposit Profile: 2008 - 2014 Profil des dépôts : 2008 - 2014

26

Reserve Fund Comparison with Other Provincial Jurisdictions (Dec. 31, 2014) Fonds de réserve : comparaison avec celui des autres provinces (31 déc. 2014)

0

20

40

60

80

100

120

140

160

180

BC ALTA SASK MAN QC ONT

Basi

s Poi

nts o

f Ins

ured

Dep

osits

Actual Target

27

Deposit Insurance Premium Comparison Comparaison des primes d'assurance-dépôts

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

BC ALTA SASK MAN QC * ONT

* Estimated rate for AMF (bottom portion) deposit insurance fund and FSD (upper portion) stabilization fund

28

Key Strategies for 2015 Principales stratégies pour 2015

Regulation Participate with the Ministry in reviewing/revising the Act Publish guidance on Corporate Governance Develop guidance on IT Risk Management Enhance Liquidity Guidance Enhance examination practices Provide regulatory guidance

Deposit Insurance Premiums Implement revised DPS

29

Questions and Discussions Questions et dialogue

Paul Mullins Chair of the Board

Président du Conseil

30

Closing RemarksRemarques de clôture

Paul Mullins Chair of the Board

Président du Conseil

31

Thank you.

Merci.