MERIDIANANNUAL REPORT 2018

MERIDIAN CREDIT UNION

2019 ANNUAL GENERAL MEETING

Agenda1. Welcome

2. Notice of Meeting / Introductions

3. Reports • Board of Directors Report• Financial Report• Audit & Finance Committee Report

4. Approval of 2018 AGM Minutes; Audited Financial Statements and Appointment of Auditors

5. Directors’ Election Results• Introduction of New Directors• Recognition of Departing Directors (if any)

6. Open Question Forum

7. Concluding Remarks

8. Adjournment

CEO Report•

PRESENT:As evidenced by the registration lists, 167 Members of the Credit Union and 19 guests were reported present in person at the host location. An additional 36 individuals logged into the AGM via webcast.

The Interim Board Chair, Ms. Tamara Paton, called the meeting to order, acknowledging that John Murphy, Chair of the Board, has resigned for personal reasons. On behalf of the Board and Management, Ms. Paton expressed her sincere appreciation for Mr. Murphy’s leadership and dedication to Meridian. On another matter, Ms. Paton acknowledged those who were impacted by the tragedy in Toronto which occurred the previous day.

Ms. Paton emphasized the importance of the democratic process to the future of the credit union, inviting active participation from members via webcast.

REGISTRATION AND NOTICE OF MEETING:Ms. Paton advised that the notice of the meeting had been duly given to Members and posted in accordance with the credit union’s By-laws. She further announced that a quorum was present, and therefore declared the meeting to be duly constituted for the transaction of business.

REGISTRATION AND MEETING OVERVIEW:A warm welcome was extended to all participants, both in person and via webcast. Ms. Paton introduced several guests. Ms. Paton identified the contents of the Member kit handed to each Member at registration and introduced the panel and members of the Board of Directors. Ms. Paton reminded members to complete the evaluation form found within the Member Kit, and available online to participants via webcast. A brief overview of the agenda was provided.

AGENDAON MOTION DULY MADE, SECONDED, AND CARRIED, IT WAS RESOLVED that the Agenda of the 2018 Annual General Meeting of Meridian Credit Union, as included in the Member Kit, be adopted.

REPORT OF THE BOARD OF DIRECTORSMs. Paton presented the Report of the Board of Directors. Highlights of the 2017 Strategic Plan were noted, with mention of the Board’s focus on the

creation and development of two important revenue diversification initiatives being Meridian OneCap Credit Corp., and the national digital bank. Ms. Paton also referenced the Board’s commitment to high standards of corporate governance, including the ongoing work to review and update Meridian’s corporate governance framework; participation in a peer-to-peer Director evaluation; and Board education. Ms. Paton noted that ten of Meridian’s Directors hold either the Institute of Corporate Directors of the Director’s College designation.

The Interim Chair expressed appreciation to Mr. Maurin and the executive leadership team for their ongoing focus and dedication to making Meridian a market- leading financial institution. She extended an appreciation to the employees for their exceptional dedication and to the membership for its continued trust, loyalty and confidence. REPORT ON FINANCESThe Acting Chief Financial Officer, Mr. Leo Gautreau, presented a financial overview of 2017, specifically referencing 2017 financial results. Highlights were provided around strong performance reflected through consolidated pre-tax earnings, relationship growth, membership base growth and growth in the total assets on balance sheet, and the wealth portfolio.

AUDIT & FINANCE COMMITTEE REPORTMr. Bolton, Chair of the Audit & Finance Committee, presented the Audit & Finance Committee’s Report to the Membership, noting that the Committee had fulfilled all the required duties under the Credit Unions and Caisses Populaires Act. He also referenced PwC’s Audit Opinion and its results, noting that there were no reportable matters that were required to be disclosed to the Membership. Mr. Bolton noted the Committee met five times during the year and fulfilled its mandate. He thanked Management, staff and fellow Committee members for their contribution.

Minutes of the 2018 Annual General Meeting of the Members of Meridian Credit Union Limited

Held at Liuna Station Grand Ballroom,360 James Street North, Hamilton Ontario

Tuesday, April 24, 2018 at 6:30 pm.

CEO’S REPORT The President and Chief Executive Officer, Mr. Bill Maurin, provided the Report on Operations, which included reference to the Member-centric focus that drives Meridian, reflections on achievements and awards received during 2017, and continued adaptation of future direction that shifts from meeting, to anticipating, personalized member needs. Mr. Maurin noted as of the fourth quarter of 2017, Meridian is now ranked as Canada’s third largest credit union, up from its previous ranking of fourth.

Mr. Maurin highlighted membership growth through the GTA, improved member services such as online banking and the new VISA credit cards. Mr. Maurin commented on the performance of Meridian OneCap Credit Corporation, the upcoming debut of the federal digital bank subsidiary, and further developments within Meridian’s horizon. Mr. Maurin shared several community involvement initiatives and how the recently refreshed Blueprint for Growth will help achieve Meridian’s long-term aspirations through innovation and strategy. Further, it was reported that more than 340 charities were supported by Meridian employees through fundraising and volunteering efforts.

OPEN QUESTION FORUM Ms. Paton opened the floor and the webcast to questions from the general Membership.

A Member asked if Meridian was becoming a bank and how the services would affect the Credit Union Membership. Mr. Maurin clarified that Meridian is not becoming a bank, rather it is creating a bank subsidiary that the Credit Union, and thereby the Credit Union’s membership, will fully own as part of Meridian’s national growth plan. The purpose of the bank will be to offer the Meridian value proposition to a broader audience across Canada. Members can also benefit from additional deposit insurance by becoming both a member of Meridian and the bank.

A Member asked what Meridian has planned for future years to become the largest Credit Union in Canada. Mr. Maurin commented that growth is a natural positive outcome that comes from doing the right thing for our membership such as through the creation of the bank, Meridian’s leasing company OneCap, and our new VISA card program. Meridian’s Blueprint for Growth offers a diversified strategy of continuing to offer complimentary but value-added services.

A Member asked what percentage of Ontarians market surveys indicate that would be willing to switch to a Credit Union. The Member followed up his initial question by asking what the maximum market size would be for a Credit Union currently in Ontario. Mr. Maurin replied that Ontario has the lowest penetration of the population for Members that belong to a credit union. This low penetration rate results in a

large opportunity for Ontario Credit Unions to gain members. In terms of population penetration, Mr. Maurin commented that Meridian is at approximately 9-10% or approximately 4% of market deposits which is low compared to membership rates of the Credit Unions based in Western Canada. He further noted that while the digital bank provides an opportunity to expand nationally, Meridian is also excited for the opportunity to grow within Ontario. Mr. Maurin noted that the big banks tend to shadow credit unions in Ontario, however Meridian is working hard to advertise our offers and increase brand awareness.

A Member requested clarification on whether the new Meridian bank would be used for Meridian’s international currency exchange, rather than the current provider being the Bank of Montreal. Mr. Maurin replied that the bank subsidiary would not have an impact on the international currency exchange. He referred the Member to speak with Mr. Genik, Meridian’s Chief Operating Officer, for further details following the meeting.

A Member asked if Meridian could open a full-service branch in Simcoe. Mr. Maurin commented that the decision on where to open branches depends on the cost to open a branch compared to the market population, profiles and the population’s affinity to bank with a Credit Union. This information creates a prioritization matrix and business case in order for Meridian to successfully invest in its branch network. He noted that Simcoe along with a number of other markets remain markets of interest, noting that Meridian will continue to expand its footprint, however cannot provide an exact date at this time for a new branch in Simcoe.

A question received from the webcast asked about Meridian’s position on the elimination of cash in the economy. Mr. Sodhi replied that Meridian explores innovations such as digital currency proactively through its internal innovation hub. He further noted that it is highly probable that cash will remain in the current economy however Meridian is actively preparing itself for these future innovations. Mr. Maurin added that through services such as Meridian’s digital payment capabilities and mLab, Meridian is readying itself should society become cashless.

With no further questions, the Chair concluded the Question and Answer period.

APPROVAL OF MINUTES 2017 AGM; APPROVAL OF THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017; and APPOINTMENT OF AUDITORSON MOTION DULY MADE, SECONDED, AND CARRIED, IT WAS RESOLVED that: a) the Minutes of the 2017 Annual General Meeting of Members, held on Thursday, April 20, 2017, be taken as read and be verified and approved;

b) the Audited Consolidated Financial Statements of Meridian Credit Union for the year ended December 31, 2017, together with all the Reports contained in the 2017 Annual Report as well as the Report of the Audit & Finance Committee, be accepted; and

c) PricewaterhouseCoopers LLP, be appointed Meridian’s auditors for the fiscal year 2018 at such remuneration as may be fixed by the Board of Directors.

ELECTION RESULTSMr. Sodhi (Returning Officer) proceeded to announce results of the Directors’ Election. Mr. Sodhi confirmed

that there were four vacancies to be filled. Of the sixteen nominations received, four had received Nominating Committee recommendation, and two of the five candidates that were not recommended chose to proceed with candidacy. Therefore, six candidate names appeared on the ballots.

There were 1,274 valid ballots cast. The four successful candidates were: Mr. Ken Bolton, Ms. Karen Farbridge, Ms. Colleen Sidford, and Mr. Bruce West, each of which will serve three year terms. Each successful candidate addressed the membership.

Ms. Hunter, Chair of the Nominating Committee, expressed appreciation to the Nominating Committee and welcomed the new Directors to the Board.

DISMISSAL OF RETURNING OFFICERON MOTION DULY MADE, SECONDED, AND CARRIED, IT WAS RESOLVED to dismiss the Returning Officer.

CONCLUSIONThere being no further business, the Chair adjourned the meeting at 8:00 p.m.

Pursuant to section 125 of the Credit Unions and Caisses Populaires Act, 1994 (the “Act”), Meridian Credit Union has an established and independent Audit & Finance Committee composed of a five-person Committee of the Board of Directors. During 2018, the Committee met on six (6) occasions, and at least once in every quarter, in compliance with the Act. The mandate of the Audit & Finance Committee is comprehensive, and includes those responsibilities as prescribed under the Regulations to the Act and Meridian’s internal By-laws and Board Policies. A summary of significant responsibilities includes:

• Reviewing the financial statements, internal controls, accounting policies and reporting procedures of the Credit Union;

• Reviewing the Credit Union’s financial performance relative to established metrics;

• Ensuring the integrity of financial reporting;

• Providing oversight over the internal and external audit processes;

• Managing the audit relationship with the external auditor;

• Monitoring the independence of the external auditors including overseeing the approval of Audit and Non-Audit services provided by external auditors;

• Oversight of the reporting relationship for the Chief Audit Executive;

• Reviewing and recommending to the Board enhancements and required updates for the following Board Policies for the Credit Union: Dividend and Class A Share Subscription;

• Monitoring compliance with established thresholds or limits required under Board Policy;

• Overseeing compliance with Regulations applicable to the Credit Union; and

• Any other requirements as stated in the Credit Union & Caisses Populaires Act and/or Regulations thereunder.

From the information provided, the Audit & Finance Committee makes recommendations to the Board of Directors or senior management, as appropriate, and requests follow up to ensure that the recommendations are considered and, if adopted, implemented.

The Audit & Finance Committee is pleased to report to the Members of the Credit Union that under the requirements of the Act, we are fulfilling our mandate. The Audit & Finance Committee has a particularly significant role to play in protecting the interests of the Members of the Credit Union. In fulfilling its mandate, the Committee receives full co-operation and support from Management to enable it to play an effective role in improving the quality of financial reporting to the Members and enhancing the overall control structure of the Credit Union.

There are no significant recommendations made by the Audit & Finance Committee that have not been implemented or are not in the process of being implemented. In addition, there are no matters that the Audit & Finance Committee believes should be reported to the Members, nor are there any further matters that are required to be disclosed pursuant to the Act or Regulations thereto.

Respectfully submitted by the Audit & Finance Committee.

Ken Bolton, Chair – April 23, 2019

REPORT OF THE AUDIT & FINANCE COMMITTEETO THE MEMBERSHIP OF MERIDIAN CREDIT UNION

FISCAL YEAR 2018

The Credit Unions and Caisse Populaires Act of Ontario:

s.104. (1) The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations, the by-laws of the Corporation respecting credit unions or the by-laws of the credit union.

s. 105. (1) The board may pass by-laws governing the conduct of the affairs of the credit union.

s. 107. (1) A by-law is not effective until it is passed by the board and confirmed, with or without variation, by a special resolution passed at a general meeting of the members duly called for that purpose or by such greater proportion of the votes cast as the articles may provide.

s. 215. Any member may, (1) (a) submit notice of any matter that the member proposes to raise at the annual meeting; and

(b) discuss at the annual meeting any matter in respect of which the member would have been entitled to submit a proposal.

(2) Any proposal of a member submitted for consideration at a meeting must be attached to the notice of the meeting.

(5) A proposal does not need to be attached to the notice of the meeting if,

(a) the proposal is not submitted at least ninety days before the anniversary date of the previous annual meeting

Meridian By-Laws:

7.08 Voting in Person at the MeetingAll voting on special resolutions coming before a meeting of the members shall take place in accordance with section 7.13. On any business coming before a meeting of members that is not a special resolution, every member who is eligible to vote at the meeting of members in question shall be entitled to one vote thereat.

7.12 Proposals and Requisitions

(a) Proposals: Upon receipt of a proposal from a member to raise an issue at the annual meeting and a request that a statement in relation to that issue be attached to the notice of meeting, the Board shall within 10 days of its receipt meet to consider whether or not the proposal is to be included in the notice of meeting. Where the Board refuses to include the proposal in the notice of meeting, the Chair of the Board shall notify the member submitting it of the refusal and give reasons therefor.

(b) Requisitions: Upon the written request of at least 5% of the members of the Credit Union, signed by each such member, stating the general nature of the business to be presented at the meeting, and deposited at the head office of the Credit Union, the Board shall call, as nearly as possible in the same manner as a membership meeting is called pursuant to these By-Laws, a general meeting of the Credit Union, for the transaction of that business, not later than 21 days from the date the written request was deposited at the head office, and such meeting shall be held within 60 days from the date of the deposit of the requisition. Requisitions may be made in counterpart.

7.13 In-Branch and Electronic Voting on Special Resolutions (a) General: Unless the Board exercises its discretion under subsection (d) hereof, voting on any special resolution shall take place before the members’ meeting at which the result will be announced and, on such special resolution, members shall be permitted to choose to cast their ballots by either: (i) in-branch voting at any branch of the Credit Union; or (ii) electronic means in the manner prescribed by the Board, in lieu of voting on the matter in person at the annual general meeting or special meeting.

(d) Alternative Methods of Voting: The Board shall have the discretion at any time to permit, by resolution, members to cast a ballot by mail, in addition to voting in accordance with subparagraph (a), in a polling on a special resolution.

The Rights of Members at Annual General MeetingsExcerpts from the Act, and Meridian’s By-Laws

Commentary:

• In respect of resolutions passed by the Board of Directors and presented to the members for confirmation, a motion presented from the floor by a member that would substantially alter the original resolution or which is prohibited by law, is out of order and should be ruled out of order by the Chair. Motions to make minor, inconsequential amendments are in order.

• Motions asking the Board of Directors to consider or review a matter are always in order.

Meeting Protocol

At the end of the meeting, 15 minutes has been allocated for Members to ask questions relevant to the business of this Annual General Meeting.

• Only Members or valid proxyholders may address the meeting.

• To gain recognition, please go to the microphone in the aisle nearest to you.

• State your name and confirm that you are a Member or proxyholder.

• Please take no more than two minutes to state your comment or question, ask only one question each time you are recognized and keep all remarks relevant to the business of the meeting. Additional questions from the same speaker may be recognized after we have heard from others who are waiting to speak.

• Any Member with further questions is welcome to follow-up with a Meridian Designated Spokesperson following the meeting.

The Board Chair is responsible for the orderly conduct of the meeting. Please ensure you comply with the Board Chair’s instructions throughout the meeting.

Notes

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