assist the two stabilization boards in providing financial assistance to credit unions and caisses populaires for the purposes of stabilization; and

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3 The New Brunswick Credit Union Deposit Insurance Corporation (the Corporation) held its annual meeting on April 19, 2004 at which time its annual report was approved. Statutory Objectives The Corporation was established and obtains its mandate and authority under Part XIII of the Credit Unions Act. (Chapter C-32.2) assented to December 11, It purposes are to: establish and maintain a deposit insurance fund; provide deposit insurance against the loss of part or of all deposits for the benefit of persons having such deposits with credit unions and caisses populaires in New Brunswick; assist the two stabilization boards in providing financial assistance to credit unions and caisses populaires for the purposes of stabilization; and minimize the Corporation s exposure to loss. Board of Directors Pursuant to section 229 of the Credit Unions Act, the Board of Directors of the Corporation consists of five directors; four directors appointed from among the directors of each stabilization board, two of who are appointed to the stabilizations boards by the Minister of Justice, and the Superintendent of credit unions. As of December 31, 2003, the Board of Directors of the Corporation consisted of: Suzanne Bonnell-Burley Q.C. Superintendent of Credit Unions Chairperson Dawson Murray Appointed by the Brunswick Credit Union Federation Stabilization Board Limited Paulette Moore Ministerial Appointment Donald French Appointed by l Office de Stabilisation de la Fédération des Caisses Populaires Acadiennes Limitée Paul Bourgoin Ministerial Appointment

4 Administrative Support By agreement, the Credit Unions Branch of the Department of Justice provides administrative support to the Corporation. In addition, the Corporation may hire personnel and obtain additional services, when required. Deposit Protection The Corporation provides the following deposit insurance coverage: a minimum basic coverage of $60,000 for insured deposits on their maturity date (principal and interest combined); and separate deposit coverage to a maximum of $60,000 each for joint deposits, trust deposits and deposits held in registered retirement saving plans (RRSPs) and in registered retirement income funds (RRIFs). The following is an example of the Corporation s coverage that a member and another member may have with the same credit union: You Savings, chequing and term deposits $60,000 Deposits made in trust for another person $60,000 RRSPs $60,000 RRIFs $60,000 Another member Savings, chequing and term deposits $60,000 Deposits made in trust for another person $60,000 RRSPs $60,000 RRIFs $60,000 Deposits held jointly by both of you Savings, chequing and term deposits $60,000

5 Not all deposits offered by credit unions are insurable: For example, the Corporation does not insure: deposits made or payable in a currency other than Canadian (e.g. accounts in U.S. dollars); term deposits with a maturity date of more than five years from the date of the deposit; investments in mortgages, stocks and mutual funds; investment, membership and other shares capital offered by credit unions. Amalgamation of credit unions When two or more credit unions amalgamate, the Corporation continues to guarantee separately the insurable deposits made in each separate credit union until their maturity date. Subsequent to the amalgamation, new deposits placed by a member at the amalgamated credit union will not be insured while insurable deposits of that member total more than $60,000. If the deposits made with the institutions before the amalgamation total less than $60,000, any new deposits a member makes at the amalgamated credit union will be added to those previous deposits, and the total will be insured to the $60,000 maximum. Planning session The Corporation held a planning session in order to further delineates the roles and responsibilities of the Corporation, the stabilization boards and the office of the superintendent in relation to member protection and public interest. At this session, the Corporation recognized the need to inform the public on the deposit insurance protection offered by the Corporation to members of credit unions in New Brunswick. Deposit Insurance Fund By trust indentures and other agreements, the Corporation has established a deposit insurance fund in two accounts in trust for the Corporation. The stabilization boards being the trustees for the fund invest and manage the fund in accordance with the approved investment policies of the Corporation. The Corporation recalculates annually the amount that the Brunswick Credit Union Stabilization Board and l Office de stabilisation de la Fédération des caisses populaires acadiennes must maintain in the trust fund. The trust fund amount is a function of the systems' total asset size, system risk, market rate risk, and loss experience. The annual calculation can determine that an increase or decrease to the trust fund is necessary. The adjustment depends on the nature of the four above-mentioned components. In 2002, the amount of the trust fund was $1,119,333. The application of the formula for 2003 determined a revised amount of $1,188,000, an increase of $68,667.

6 FINANCIAL INFORMATION As at December 31, 2003, the assets of the Corporation totalled $1.2 million. The funding necessary for the Corporation s operations were obtained from the stabilization boards that have a statutory obligation to provide services that the Corporation may request for its purposes. The Corporation may also levy credit unions and caisses populaires if it so chooses; this has not been necessary since the creation of the Corporation, and does not appear to be required in the foreseeable future. Credit union and caisse populaire members deposit protection is found in three tiers. The first is the credit unions and caisse populaires legislated equity requirement. The legislated equity requirement for credit unions increased to 5% as of January 31, The assets of the stabilization boards provide the second tier protection. As at December 31, 2003, the assets of l Office de stabilization de la Fédération des caisses populaires acadiennes, stood at $ 52.7 million, and the assets of the Brunswick Credit Union Federation Stabilization Board Limited stood at $13.5 million, exclusive of liabilities. Historically, the New Brunswick stabilization boards' assets, in relation to system assets, have been among the highest of the Canadian jurisdictions. The third tier of deposit protection is deposit insurance provided by the Corporation. Credit union and caisse populaire members deposits are well protected. As of December 31, 2003, credit unions and caisses populaires in New Brunswick had holdings of $2.5 billion in deposits, which is an increase of 6.8% compared with the previous year. Internet Site The NBCUDIC Internet site at provides data about deposit insurance in New Brunswick, the Corporation s annual report including general information about the mission of the NBCUDIC, deposit guarantees, its administrative structure, and its board of directors. Profile of member institutions In order to solicit and accept deposits in New Brunswick, a credit union must be a member of the Corporation and display the official membership sign of the Corporation at the entrance and within each place of business operated by the member credit union. In addition, a credit union must be a member of the stabilization board established in relation to the federation of which the credit union is a member. There exists two stabilization boards in New Brunswick namely the Brunswick Credit Union Federation Stabilization Board Limited and l Office de Stabilisation des Caisses Populaires Acadiennes Limitée.

7 As of December 31, 2003, there were 56 credit unions and caisses populaires in New Brunswick, 3 less than on the same date last year. The reduction in the number of institutions is explained by the fact that during the year there were 2 amalgamations involving 4 caisses populaires, and 1 dissolution. Amalgamation May 1, 2003 Caisse populaire La Vallée Ltée / Valley Credit Union Ltd., resulting from the amalgamation of Caisse populaire Les Chutes Ltée with Caisse populaire La Vallée Ltée / Valley Credit Union Ltd. December 31, 2003 Caisse populaire République Ltée resulting from the amalgamation of LA CAISSE POPULAIRE DE NOTRE-DAME DES SEPT DOULEURS LIMITEE with Caisse populaire pâte et papier Ltée. Dissolution October 28, 2003 CHATHAM TOWN CREDIT UNION, LIMITED.

8 Board of Director s Report The financial statements of the New Brunswick Credit Union Deposit Insurance Corporation are the responsibility of the Corporation s management. This responsibility includes the choice of the appropriate accounting policies in accordance with generally accepted accounting principles in Canada. The Office of the Auditor General of New Brunswick audited the financial statements of the Corporation in accordance with generally accepted auditing principles in Canada, and his auditor s report shows the nature and extent of this audit and the expression of his opinion. The auditor s report and financial statements are reproduced below.

9 Membership information NBCUDIC members as of December Caisse populaire Acadie Ltée Caisse populaire Atholville - Val d'amours Ltée La Caisse Populaire de Baie Ste. Anne Ltée Bayview Credit Union Limited Beaubear Credit Union, Limited Caisse populaire Beauséjour Ltée La Caisse Populaire de Beresford Ltee. Blackville Credit Union Limited Caisse populaire des Iles Ltée La Caisse Populaire de Kedgwick Limitee Caisse populaire Kent - Beauséjour Ltée Caisse populaire Kent Nord Ltée Caisse populaire Kent-Centre Ltée Caisse populaire Kent-Sud Ltée Caisse populaire La Vallée Ltée / Valley Credit Union Ltd. Caisse populaire le lien d'or Ltée Capital Credit Union Limited La Caisse Populaire de Caraquet Ltee. CARLETON PIONEER CREDIT UNION, LIMITED Caisse populaire Chaleur Ltée / Chaleur Credit Union Ltd CHARLOTTE COUNTY CREDIT UNION LIMITED MCADAM CREDIT UNION LIMITED Caisse populaire Madawaska Ltée Caisse populaire de Memramcook Ltée MONCTON CIVIC CREDIT UNION LIMITED Caisse populaire de Néguac Ltée CHURCH RIVER CREDIT UNION LIMITED Citizens Credit Union Limited New Brunswick Teachers' Association Credit Union Limited LA CAISSE POPULAIRE DE NOTRE DAME DE GRACES LIMITEE COLLEGE HILL CREDIT UNION LIMITED Consolidated-Bathurst Credit Union Limited Dalhousie Industrial Credit Union, Limited Deer Island Credit Union Caisse populaire Dieppe Ltée Caisse populaire des Fondateurs Ltée Caisse populaire Haut-Madawaska Ltée Omista Credit Union Limited La Caisse Populaire de Paquetville Limitee Caisse populaire de la Péninsule Ltée. Prosper Credit Union Ltd. Public Service Employees Credit Union Ltd Caisse populaire République Ltée

10 Caisse populaire Restigouche Est Ltée Caisse populaire Restigouche Ltée ROYAL CREDIT UNION LIMITED THE REXTON CREDIT UNION LIMITED Caisse populaire de Saint-Basile Ltée La Caisse Populaire de Saint-Quentin Ltee. La Caisse Populaire de Sheila Limitee La Caisse Populaire de Shippagan Limitée La Caisse Populaire de St. Sauveur Limitee Caisse populaire Sud-Est Ltée Caisse populaire de Tracadie Ltée Trico Credit Union Ltd. Caisse Populaire York Credit Union Ltd./Ltée

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