CUMA Manager of the Year Award

Co-sponsored by…

And the 2003 honour is awarded to …

Marty Komsa, President & CEO

Windsor Family Savings Credit Union

Credit Union Leaders Speak Out!

Andy Poprawa, President & CEO Deposit Insurance

Corporation of Ontario

Deposit Insurance Deposit Insurance Corporation of OntarioCorporation of Ontario

Credit Union Managers’

Association September 17, 2003

“Season of

Change”

Overview

How are we doing?How are we doing?

Where are we going?Where are we going?

How Are We Doing?

Overall system condition is goodOverall system condition is good

Risk of failures has been decliningRisk of failures has been declining

Overall system performance stableOverall system performance stable

Some credit unions/caisses Some credit unions/caisses

populaires performing better than populaires performing better than

othersothers

Quick - System Condition at 2Q03 ( from 2Q02) 269269 institutions institutions (16)(16) from 285 from 285 All except 3 met minimum (5%) capital All except 3 met minimum (5%) capital

requirementsrequirements Average size Average size $78 M$78 M (17M)(17M) from $61 M from $61 M System Assets System Assets $20.8$20.8 Billion Billion (3.4B)(3.4B) from $17.4B from $17.4B System Capital System Capital 6.69%6.69% from 6.73% from 6.73% Liquidity Liquidity 21.3%21.3% from 17.5% from 17.5% Commercial loans Commercial loans by by 13%13%

Quick System Performance ( from 2Q02) at 2Q03

Margins Margins from 3.00% to from 3.00% to 2.97%2.97% Non-interest expenses Non-interest expenses from 3.33% to from 3.33% to 3.22% 3.22% Non-interest income Non-interest income by by .08%.08% Loan Costs Loan Costs from .16% to from .16% to .12%.12% Gross Delinquency Gross Delinquency (> 30 days)(> 30 days) from 1.38% to from 1.38% to

1.01%1.01% ROA ROA from 29 bp to from 29 bp to 36 bp36 bp

Quick - DICO Financial

DICO July 31, 2003 financial resultsDICO July 31, 2003 financial resultsNo major failures during 2003No major failures during 2003No new insurance losses to dateNo new insurance losses to dateRecoveries of $5.5 million on past lossesRecoveries of $5.5 million on past lossesGross operating expenses 14.4% below Gross operating expenses 14.4% below

budgetbudgetReserve Fund of $56 million vs. target of Reserve Fund of $56 million vs. target of

$56 million by year end$56 million by year end

Quick - DICO Operational

On-Site Verifications (OSVs)On-Site Verifications (OSVs) 91 completed/in progress as at end of 3Q0391 completed/in progress as at end of 3Q03

Intervention Programs – improvements since Intervention Programs – improvements since last conference update of 2002 last conference update of 2002

ProgramProgram 20032003(# of MIs)(# of MIs)

20022002(# of MIs)(# of MIs)

WatchlistWatchlist 66 2828Pending SupervisionPending Supervision 33 66SupervisionSupervision 55 1313AdministrationAdministration 00 11

Distribution of Assets By Premium Category @ 2Q03 vs 2Q02

8.8 10.9

27.4

47.452.6

34.2

10.47

0.8 0.50

10

20

30

40

50

60

Per

cen

t

1 2 3 4 5

2Q02 2Q03

Where Are We Going? OSVsOSVs

CUCO Task Force recommendationsCUCO Task Force recommendations Exit interviews & final reportsExit interviews & final reports MaterialityMateriality AppealsAppeals Commercial loan reviewsCommercial loan reviews

Small Credit Union InitiativeSmall Credit Union Initiative Dedicated staffDedicated staff On-site reviewsOn-site reviews Streamlined processesStreamlined processes

Where Are We Going? Standards (By Law #5) ReviewStandards (By Law #5) Review

Expanded advisory committeeExpanded advisory committee Industry ChairIndustry Chair Proposed standards circulated for comment Proposed standards circulated for comment

in Septemberin September Interest Rate Risk RegulationInterest Rate Risk Regulation Capital RulesCapital Rules DICO Contingency Financing & Investment DICO Contingency Financing & Investment

PolicyPolicy Research on consumer awarenessResearch on consumer awareness