2011 Annual Report to Members
Contents Vision, Mission & Values............................................................................................................................................................................................................................ 1 Directors’ Report......................................................................................................................................................................................................................................... 3 CEO’s Report................................................................................................................................................................................................................................................ 3 Sixty Years of Prosperity............................................................................................................................................................................................................................ 5 Hallmark of Our Heritage.......................................................................................................................................................................................................................... 5 Relying on Leadership............................................................................................................................................................................................................................... 7 Keeping Pace with Technology................................................................................................................................................................................................................ 9 Our Quest for Excellence........................................................................................................................................................................................................................... 9 In Focus....................................................................................................................................................................................................................................................... 11 FINANCIAL STATEMENTS Independent Auditor’s Report............................................................................................................................................................................................................... 12 Balance Sheet............................................................................................................................................................................................................................................ 13 Statement of Comprehensive Income.................................................................................................................................................................................................. 14 Statement of Changes in Member’s Equity......................................................................................................................................................................................... 15 Statement of Cash Flows......................................................................................................................................................................................................................... 16 Notes to Summary Financial Statements............................................................................................................................................................................................. 17
Casera’s Staff Every Casera employee is focused on delivering exceptional member service. They are truly the foundation of our success.
Corporate Office
Plessis Road Branch
Kildare Avenue Branch
Brent Thomas Beverley Self Sarah Heppner Shaylene Hurl Serena Streilein Leanna Beasant Mellisa Loewen Nicholas Boudreau
Heather Dufresne Terry Jones Sharon Slater Cindy Smith Jennifer Morrison Doloreen Hector Lorelei Cochrane Ashley Webster Jennifer Elder Karen Genung Shirley Konowalchuk Tanya Murray Gail Armstrong Cari Goncalves Kayleigh Callow Janice Matheson Jayme Marien Mallory Gutwein Courtney Vandenberg Sharon Cortvriendt
Evelyn Kouk Breanne Wynnobel Karen Hainstock Kim Podolsky Donna Waslenko Sue Schille Whitney Janz Marla Costa Scott Lamothe Trisha Labelle Elaine Banman Robyn Nyhof Marjorie Kolimlim Katerina Phanthavong
St. Anne’s Road Branch Kathy Lemky Jason Klassen Ashley Paterson Ashley Robidoux Jaclyn Girouard Casera’s Staff as of December 31, 2011
2011 Annual Report
Vision, Mission & Values Vision As a leading prosperity builder and our members’ first choice for financial services, we enrich the lives of individuals, families and communities.
Mission To fulfill the ever-changing financial needs of our members by efficiently delivering exceptional service and creative solutions.
Values OUR PEOPLE The Foundation of our Success Delivering exceptional member service is the focus of every employee. We invest in our employees’ growth by providing in-depth training and a diversity of career development opportunities. CARING FOR OUR COMMUNITY Focused on our Neighbourhoods We support programs and initiatives that enhance the lives of our members and the communities we serve.
BUILDING AND MOVING FORWARD Vision for the Future We embrace change and achieve success by anticipating our members’ financial needs, leveraging technologies and delivering creative financial solutions. FINANCIAL STRENGTH Stability and Security Within the framework of the co-operative philosophy, we are committed to achieving sustainable growth through prudent management of our financial resources.
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Casera Credit Union
Dedicated Service
Throughout the year, we commemorated not only Casera’s six decades of success in Transcona, but also five years of dedicated service in south St. Vital and St. Boniface.
2011 Annual Report
Directors’ Report
CEO’s Report
Sixty years ago, the founders of Transcona Credit Union served a small, but growing, group of members. Their focus was local, and the decisions they made only affected those who relied on them for limited services. Fast forward to today. Casera still serves a local membership, but it operates in a globalized financial marketplace. This means that events that happen halfway around the world have a financial impact on the decisions Casera’s board makes.
While there were still echoes of economic uncertainty in the world, Casera’s bottom line continued to grow and maintain its solidity, thanks to our operational focus on products that delivered value, technology that enhanced efficiency and personal service that strengthened loyalty among members. By staying true to what has always been recognized as our cornerstone strengths, 2011 was a year in which we celebrated our current successes and our historical achievements. The 60th anniversary celebrations honoured our past and also highlighted our role as prosperity builder and community supporter.
To ensure that our decisions are made in the best interests of our members, the board of directors abides by the principles of sound governance and strategic planning to ensure not only a strong financial foundation but also a dynamic, long-range vision for our credit union. We remain steadfast in our financial stewardship, but we also work hard to understand the forces at play in our society that will influence our development in the future. While we are challenged by increased compliance and regulations, transformative technology and a competitive marketplace, there is one aspect of our business that has stayed true to the vision of our founders. Because we were established on a foundation of cooperation and community commitment, we continually measure our success against Casera’s core values of exceptional service, product innovation, community support and financial governance. This assures us that any decision we make is based on the needs of our members. Dave Abel President, Board of Directors
No amount of success, however, can be attained without prudent management of our financial resources. With the industry-wide move toward International Financial Reporting Standards, our board and staff worked to ensure that our financial reporting was compliant with all the new regulations. Because so much of today’s financial industry is driven by technology and our members are increasingly embracing the commercial possibilities of the Internet, we took steps throughout the year to expand Casera’s electronic banking capabilities and to lay the groundwork for online marketing. Among these initiatives were the completion of microchip technology, the installation of new ATMs in all our branches and the launch of a revitalized website. These enhanced solutions are creating operational efficiencies and opportunities to reach out to the marketplace. As a member-focused financial services provider, we’re looking forward to a future full of opportunity. Brent Thomas Chief Executive Officer
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Casera Credit Union
Honouring History The 59th annual general meeting, which was well attended by members and business partners, paid tribute to Casera’s 60 years of service and success.
Significant Support The seventh annual Casera Walk With L’Arche raised $37,000, a significant amount that will go toward establishing the L’Arche Tova Café in Transcona.
Anniversary Celebrated One of Casera’s anniversary initiatives was the publication of a booklet, Strength Through Success, which honoured the vision of the credit union’s founders and celebrated its 60 years of success.
2011 Annual Report
Sixty Years of Prosperity
Hallmark of Our Heritage
Our 60 years of success were founded on the foresight of 10 former CNR workers — Walter Alam, Harry Brown, Charles Burkett, Robert Davison, Arthur Everton, Eric Hansen, Thomas Herling, Walter Keen, Peter Mathewson and Michael Tomkiw — who established Transcona Credit Union in 1951. Their vision has always been our inspiration.
Community support is a hallmark of Casera’s heritage. We have long been participants in United Way of Winnipeg, supporters of the Transcona Hi Neighbour Festival and sponsor of numerous neighbourhood initiatives that help enhance the communities we do business in. This year, we partnered with L’Arche Winnipeg in organizing the Casera Credit Union Walk With L’Arche in support of Winnipeggers with a developmental disability. We also sponsored Save Our Seine’s Urban Green Team over the summer to help clean up the Seine River in south Winnipeg.
In its first year of operation, Transcona Credit Union provided deposit and loan services to 317 CNR workers and their families. By the end of 1951, the credit union’s assets totaled $5,168. Sixty years later, Casera has 11,000 members and $276 million in assets. We celebrated Casera’s six decades of prosperity at our annual general meeting in April. Throughout 2011, we held a number of heritage events, created an anniversary booklet that was distributed to members, produced framed timelines for our branches and ran a contest for new and existing members. We also commemorated the St. Anne’s Road branch’s fifth anniversary in December. By promoting Casera’s heritage, we were able to reinforce our position in the marketplace as a seasoned and solutions-oriented financial services provider.
Students at Dakota Collegiate, Murdoch MacKay Collegiate and Transcona Collegiate benefited from a library magazine program sponsored by Casera. Grade 3 students in the River East Transcona School Division and Louis Riel School Division participated in a fire safety project that Casera and the Firefighters Burn Fund organized. As well, we continued to offer bursaries to deserving area high school students as we have done since 1972.
Milestones of Success 1951
Transcona Credit Union opened for business
1964
First $1 million in assets achieved
1977
Building constructed at 1300 Plessis Road
1994
Kildare Avenue branch opened
2006
Name changed to Casera; St. Anne’s Road branch launched
2011
60th anniversary celebrated
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Casera Credit Union
Small Business Financing
Casera launched a dedicated commercial lending service, offering small business owners a range of financial options.
Operational Expertise Guiding Casera through its day-to-day operations are (L to R) Leanna Beasant, chief financial officer; Brent Thomas, chief executive officer; Kathy Lemky, manager, St. Anne’s Road branch; Heather Dufrense, assistant manager, Plessis Road branch; and Evelyn Kouk, manager, Kildare Avenue branch.
2011 Annual Report
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Relying on Leadership Casera does business in a competitive local marketplace, but it must respond to an increasingly global financial services industry. It takes flexible thinking and long-range planning to prosper in such an environment and Casera relies on a diverse and experienced board of directors for leadership. Entrusted to manage our members’ financial resources prudently and guide Casera into the future are president Dave Abel, first vice president Bev Lafrance, second vice president Barbara Anderson, corporate secretary Grace Page, and Martin Johnson, Vic Kuffner, Robert Riddell, Jason Whittaker and Steve Zurawecki. Throughout 2011, the board met regularly as a group and in four subcommittees, which provided focused discussion on governance issues and opportunities for strategic decision-making.
Audit Committee: Martin Johnson (chairperson), Robert Riddell, Vic Kuffner, Steve Zurawecki As a link between Casera’s auditors and the board, the audit committee reports on financial disclosure, internal controls, risk management and the integrity of the audit process.
Policy Committee: Bev Lafrance (chairperson), Barbara Anderson, Jason Whittaker, Vic Kuffner The policy committee is responsible for overseeing Casera’s policies, reviewing standards of sound business practices and recommends changes to bylaws and policies.
Executive Committee:
Nominating Committee:
Dave Abel (chairperson), Bev Lafrance, Barbara Anderson, Grace Page The executive committee is authorized to govern the credit union between board meetings, working closely with management to ensure Casera’s day-to-day success.
Entrusted with ensuring inclusion of members in Casera’s operations, the nominating committee identifies, interviews and recommends director candidates and coordinates board elections.
Top Row L to R Dave Abel Bev Lafrance Barbara Anderson Grace Page
Robert Riddell (chairperson), Barbara Anderson, Martin Johnson
Bottom Row L to R Martin Johnson Vic Kuffner Robert Riddell Jason Whittaker Steve Zurawecki
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Casera Credit Union
Trustful Service Marlene Bach, Casera’s longest serving employee, retired after 37 years of trustful service to members.
Website Redeveloped Casera’s website has been revitalized, offering more information and interactivity. The site features the latest news and showcases Casera’s support of community programs, events and initiatives.
2011 Annual Report
Keeping Pace with Technology
Our Quest for Excellence
Financial service providers are compelled to invest in technology that produces efficiencies, creates convenience and improves security in order to compete successfully in today’s challenging marketplace. As such, we continued to upgrade our banking technology in 2011 and to make preparations for even more developments in the future.
While much has changed since 1951, one aspect of Casera’s operations has not: the quest of every employee to deliver exceptional member service. This commitment to excellence is at the heart of our year-to-year success. After all, it is the relationships that face-to-face service builds that helps establish the trust and loyalty of our members.
We finalized distribution of new Member Cards (with secure microchip technology) to all 11,000 Casera members. As well, the security of CU@HOME was enhanced through increased authentication, a process that has made it harder for phishers and fraudsters to steal passwords.
In 2011, we supported our staff through the employee-directed Workplace, Safety and Health Committee, ensuring that all workstations are ergonomically sound. We were proactive in developing a succession strategy, which enables us to plan for career development and recruitment. In October, Marlene Bach retired after serving Casera’s members for 37 years. We are grateful for Marlene’s many years of exceptional service, and we wish her well in the future.
A more informative and interactive website was launched after many months of development and consultation with staff, directors and members. The site, www.caseracu.ca, is now easier to navigate and features in-depth information and online mortgage and loan applications. To keep pace with our competitors, Casera will be implementing new banking technologies in 2012 that include Me-to-Me Money Transfer (online transfers between Casera accounts and accounts at other institutions) and Interac e-Transfer (secure electronic transfers via email or text messages). We will also be expanding our mobile banking capabilities to include transfers between accounts and bill payments.
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Casera Credit Union
Enhancing Learning Thanks to Casera’s sponsorship, students at three neighbourhood high schools — Dakota Collegiate, Murdoch MacKay Collegiate and Transcona Collegiate Institute — are enjoying reading a variety of magazines.
Titan Success Under the direction of teacher Kelly Wilde and the ongoing support of Casera, Titan Credit Union brings the valuable lessons of leadership and financial management to the students of Transcona Collegiate Institute.
2011 Annual Report
In Focus Strength Net income was $1,472,964, up 16.62% from 2010’s $1,262,994.
Equity Our equity position was further strengthened by $1,569,336 to reach total equity of $14,023,270. Our equity is currently above the regulatory requirement of 5%.
Dividend A total of $107,000 was paid out as a share dividend, bringing the total dollar amount paid to members, to date, over $3 million.
Assets Assets grew by $32,742,988 or 13.44%, to reach $276,350,786 at December 31, 2011.
Expenses Gross operating expenses increased by 4.17% to $5,458,137 compared to $5,239,723 in 2010. Our efficiency ratio was 76.33% compared to 78.37% in 2010.
Loans Member loans at December 31, 2011 were $250,709,060, an increase of 13.85% from $220,218,794 in 2010. There was no major change in our loan mix with residential mortgages representing 73.88% of our loans portfolio. Loans represented 90.72% of assets at December 31, 2011.
A provision for impaired loans was set up for $51,970, with allowance for doubtful loans at $261,099 up from $249,498 in 2010. Loans written-off were $40,368 compared to $51,521 in 2010.
Deposits Member deposits at December 31, 2011 were $259,219,847, an increase of 16.69% from $222,147,579 in 2010. There was no major change in our deposit mix with the majority of member deposits held in term deposits and registered plans.
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Casera Credit Union
Report of the Independent Auditor on the Summary Financial Statements To the Members of CASERA CREDIT UNION LIMITED The accompanying summary financial statements, which comprise the summary balance sheets as at December 31, 2011, December 31, 2010 and January 1, 2010, and the summary statements of comprehensive income, summary statements of changes in members’ equity and summary statements of cash flows for the years ended December 31, 2011 and December 31, 2010, are derived from the audited financial statements of CASERA CREDIT UNION LIMITED for the years ended December 31, 2011 and December 31, 2010. We expressed an unmodified audit opinion on those financial statements in our report dated March 26, 2012. The summary financial statements do not contain all the statements and disclosures required by International Financial Reporting Standards. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of the Credit Union.
Management’s Responsibility for the Summary Financial Statements Management is responsible for the preparation of a summary of the audited financial statements on the basis described in Note 1.
Auditor’s Responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with Canadian Audit Standard (CAS) 810, ‘Engagements to Report on Summary Financial Statements’.
Opinion In our opinion, the summary financial statements derived from the audited financial statements of CASERA CREDIT UNION LIMITED for the years ended December 31, 2011 and December 31, 2010 are a fair summary of those financial statements, on the basis described in Note 1.
Chartered Accountants Winnipeg, Manitoba March 26, 2012 BDO Canada LLP, a Canadian Limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO Canada s.r.l., une société canadienne à responsablitité limitée, est membre de BDO International Limited, société de droit anglais, et fait partie du réseau international de sociétés membres indépendantes BDO.
2011 Annual Report
Casera Credit Union Limited Summary
Balance Sheet
Dec. 31, 2011
ASSETS Funds on hand and on deposit Income taxes recoverable Other assets Investments Loans to members Property, plant and equipment Intangible assets LIABILITIES AND MEMBERS’ EQUITY Borrowings Income taxes payable Other liabilities Members’ deposits Deferred income tax liability Members’ shares Members’ Capital Members’ shares Retained earnings
Dec. 31, 2010
Jan. 1, 2010
$ 214,107 $ 506,362 $ 1,007,473 — — 102,516 526,605 539,370 578,929 22,661,429 19,905,132 17,905,754 250,709,060 220,218,794 200,652,149 1,564,062 1,665,746 1,927,284 675,523 772,394 777,826 $
276,350,786
$
1,398,393 $ 7,081,064 $ 9,475,366 92,421 20,283 — 522,403 674,799 528,385 259,219,847 222,147,579 200,649,444 161,000 196,000 159,000 933,452 1,034,139 992,138
$
243,607,798
$
222,951,931
262,327,516 231,153,864 211,804,333 1,717,501 1,559,965 1,463,653 12,305,769 10,893,969 9,683,945 14,023,270 12,453,934 11,147,598 $
276,350,786
$
243,607,798
$
222,951,931
Approved on behalf of the Board of Directors:
___________________________ Director
___________________________ Director
The accompanying notes are an integral part of these financial statements.
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Casera Credit Union
Casera Credit Union Limited Summary Statement of
Comprehensive Income For the year ended December 31
REVENUE Interest from members’ loans Lines of credit Term loans Real Estate Investment income Liquidity deposits CUCM shares
2011
2010
$ 646,468 $ 516,987 1,892,001 1,663,511 8,029,352 7,603,802
363,584 75,035
189,776 66,703
11,006,440
10,040,779
5,985,603 288,683
5,603,035 114,523
6,274,286
5,717,558
Gross financial margin
4,732,154
4,323,221
OPERATING EXPENSES Personnel Administrative Occupancy Members’ security Organizational Distributions to members
2,325,606 1,800,652 842,253 252,051 199,898 37,677
2,143,448 1,778,547 841,648 244,265 191,950 39,865
Gross operating expenses
5,458,137
5,239,723
Less other income
2,418,368
2,362,578
3,039,769
Gross operating income Provision for (recovery of) impaired loans
1,692,385 51,970
1,446,076 (1,251)
Income before income taxes Provision for income taxes
1,640,415 167,451
1,447,327 184,333
Net and total comprehensive income for the year
$
1,472,964 $
1,262,994
COST OF FUNDS Interest paid to members Interest on borrowings
The accompanying notes are an integral part of these financial statements.
2,877,145
2011 Annual Report
Casera Credit Union Limited Summary Statement of
Changes in Members’ Equity For the year ended December 31
2011
Balance on January 1, 2010 Net income for the year Distributions to members Issue of members’ shares Redemption of members’ shares Transfer (to) from liabilities
Members’ Shares $ 1,463,653 — — 239,541 (101,228) (42,001)
Balance on December 31, 2010
$
Net income for the year Distributions to members Issue of members’ shares Redemption of members’ shares Transfer (to) from liabilities
— 1,472,964 1,472,964 — (61,164) (61,164) 244,450 — 244,450 (187,601) — (187,601) 100,687 — 100,687
Balance on December 31, 2011
Retained Earnings Total $ 9,683,945 $ 11,147,598 1,262,994 1,262,994 (52,970) (52,970) — 239,541 — (101,228) — (42,001)
1,559,965 $ 10,893,969 $ 12,453,934
$ 1,717,501 $ 12,305,769 $ 14,023,270
The accompanying notes are an integral part of these financial statements.
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Casera Credit Union
Casera Credit Union Limited Summary
Statement of Cash Flows For the year ended December 31
2011
2010
CASH FLOWS FROM OPERATING ACTIVITIES Net income for the year $ 1,472,964 $ 1,262,994 Adjustments for Interest and investment revenue (11,006,440) (10,040,779) Interest expense 6,274,286 5,717,558 Depreciation expense 362,175 370,999 Provision for (recovery of ) impaired loans 51,970 (1,251) Deferred taxes (35,000) 37,000 (2,880,045) (2,653,479) Change in other assets and liabilities Change in income taxes payable
(139,631) 211,712 72,081
Changes in member activities (net) Change in loans to members Change in members’ deposits Cash flows related to interest, dividends, and income taxes Interest received on loans to members Interest received on investments Interest paid on members’ deposits Interest paid on borrowings Income taxes (paid) recovered Total cash flows from operating activities
(30,500,539) (19,612,707) 36,836,600 21,583,787 6,336,061 1,971,080 10,526,124 409,805 (5,749,935) (288,683) (131,415) 4,765,896
8,293,993
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments Purchase of property, plant and equipment Purchase of intangible assets
185,973 128,280 314,253
9,831,613 256,739 (5,688,687) (114,523) 1,684 4,286,826 3,918,680
22,517 (151,979) (11,641)
362 (32,048) (71,981)
Total cash flows from investing activities
(141,103)
(103,667)
CASH FLOWS FROM FINANCING ACTIVITIES Issue of common and surplus shares Redemption of common and surplus shares Dividends on shares Total cash flows from financing activities
244,450 (187,601) (69,323) (12,474)
239,541 (101,228) (60,135) 78,178
Net increase in cash and cash equivalents 8,140,416 3,893,191 Cash and cash equivalents, beginning of year 11,925,298 8,032,107 Cash and cash equivalents, end of year
$ 20,065,714 $ 11,925,298
Comprised of the following: Funds on hand and on deposit $ 214,107 $ 506,362 Credit Union Central of Manitoba deposits 21,250,000 18,500,000 Credit Union Central of Manitoba Borrowings (1,398,393) (7,081,064) $ 20,065,714 $ 11,925,298 The accompanying notes are an integral part of these financial statements.
2011 Annual Report
Casera Credit Union Limited Notes to Summary
Financial Statements For the year ended December 31, 2011
1. Basis of Presentation Management is responsible for the preparation of summary financial statements. The summary presented includes only the summary balance sheets and the summary statements of comprehensive income, summary statements of changes in members’ equity and summary statements of cash flows. It does not include any other schedules or the notes to the financial statements. The summary balance sheets and summary statements of comprehensive income, summary statements of changes in members’ equity and summary statements of cash flows are presented in the same detail as the audited financial statements except the note referencing has been removed. Copies of the December 31, 2011 audited financial statements are available at the Credit Union’s head office at 1300 Plessis Road, Winnipeg Manitoba or online at www.caseracu.ca.
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Products & Services
Essentials of Building Prosperity Deposit Accounts Maximizer Chequing Plan 24 Daily Interest Savings Regular Savings High Yield Savings Fat Cat Headstart Headstart Grad Pac Club 55 Trust Accounts U.S. Dollar Accounts Lending Products & Services Mortgages Personal Loans Mortgage Life Insurance* Credit Disability & Credit Life Insurance*
Overdraft Protection Lines of Credit Organizational Loans Commercial Loans Investment Products & Services Term Deposits Tax-free Savings Accounts (TFSAs) Registered Retirement Savings Plans (RRSPs) Registered Retirement Income Funds (RRIFs) Registered Education Savings Plans (RESPs) Investment Planning Mutual Funds** Credential Direct Online Brokerage***
Additional Services ATM MemberCard Drive-thru and In-branch ATMs Interac® Direct Payment Direct Deposits (payroll, pension and government) Money Orders Travellers Cheques CUbyPhone CU@Home American Express U.S. Drafts Utility Bill Payments MasterCard Safety Deposit Boxes Night Depository Travel & Homeowners Insurance*
* Mortgage Life, Credit Disability and Credit Life Insurances are underwritten by CUMIS Life Insurance Company. Homeowners Insurance is underwritten by CUMIS General Insurance Company. Travel Insurance is underwritten by Co-operators General Insurance Company. These services are provided to credit union members through the Credit Union Insurance Services Program.
** Mutual funds are offered through Credential Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ®Credential is a registered mark owned by Credential Financial Inc. and is used under licence. *** Credential Direct® is a division of Credential Securities Inc., and operates as a separate business unit. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund. ®Credential is a registered mark owned by Credential Financial Inc. and is used under licence
Credit Unions – Building a Better World
The United Nations has declared 2012 the International Year of Co-operatives. It is also the 75th anniversary of Manitoba’s credit union system.
1300 Plessis Road Ph: 958-6300 | 8-630 Kildare Avenue Ph: 958-6320 720 St. Anne’s Road Ph: 958-6600 | E-mail: talktous@caseracu.ca
www.caseracu.ca