A Few Words From... A Few Words From... Brent Zorgdrager, Chief Executive Officer Fall 2015 Share Newsletter

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1 Brent Zorgdrager, Chief Executive Officer Fall 2015 Share Newsletter The last few months have been eventful for MSCU staff and members on many fronts. The year so far has yielded reasonable lending and deposit growth. MSCU continues to compete in an aggressive marketplace, and we appreciate your business. Deliberation has continued around our name and brand. We ve focused on listening, reflection, and learning with members, board members, and our staff. At our AGM we shared three key steps we d take in the coming months. Here s an update: 1. We said we d take time to learn from other institutions and draw on the wisdom of external strategic expertise. We ve been in conversation with Everence, a U.S. credit union with deep Mennonite roots, and other institutions, and the learning has been helpful. We ve also engaged an industry expert strategic partner, Weber Marketing Group, whose objective perspective and guidance has helped us continue healthy conversations with staff and our Board of Directors. 2. We noted that we d like to generate name possibilities to help move the conversation forward, and that we d do this through a committee of staff and board. This committee is being formed and will begin meeting soon. 3. We expressed a desire to hear from our younger members, more conservative constituents, and new conference members in building solutions for our future. This work will occur during October and November. In addition to this, we ve done careful financial modelling for our future, had deep conversations with our board, and spent time meeting with our staff. We ve also begun working on an efficiency project to improve our service times and your experience as we continue to serve you in ways that reflect your values. What is most clear to me through this time is that we are a credit union with a community of staff and members who care deeply about who we are and what we do! In our hearts, we all seek to live our lives in ways that are true to our faith and values and that is what makes us unique and also is what brings us together. We look forward to sharing more in-depth communication with you around brand and name in the coming weeks and months! Mary Ann Mooney, Chief Operating Officer Summer 2015 Share Newsletter Since joining MSCU as chief operating officer in March 2015, I have been constantly grateful for the opportunity to bring my faith to work and live out our shared values of integrity, compassion, and responsible stewardship - MSCU is a gem! Financial institutions that speak about mutual aid, responsible use of credit, and socially responsible investments are entirely rare. I see in our staff a genuine concern for our members that extends beyond service with a smile - although they do that too! What a joy it is to contribute to an organization with such an honourable mission and vision of service. My professional background has been in operations management in a number of industries, including: investments; insurance; banking; credit; and technology. At MSCU I am responsible for the operations of our eight branches, as well as our investment and member services teams at head office. All of the teams are well underway in delivering on their plans of improving service, products, and efficiencies in It s an exciting time for our credit union, as we share and listen to the perspectives of many about our name and brand and our desire to be more welcoming and to grow. It s a serious period of discernment for leadership and for the board of directors. There has been, and will continue to be, passionate discussion, listening, thought and, most importantly, prayer as we consider our future. As a newcomer, I am delighted to see how deeply engaged members are with this organization and how much they care about where we are headed! One of the best parts of my training was the time I spent serving members in the branches. I enjoy meeting you, so always feel free to reach out to me at head office with both your compliments and concerns about what we do for you.

2 Plant seeds for the future of your credit union. Summer 2015 Share Newsletter At our 51st annual general meeting held in April at Creekside Church, we had the unique opportunity of having members gather in small groups and discuss two key questions related to our credit union s future direction. MSCU is in the midst of a consultative process with our membership around the role of sustainable growth in our future, and our brand and name in that context. We believe that hearing our members voices on these questions will help us advance the bigger questions we are facing around our name and direction. The small group discussions were facilitated by MSCU staff members and directors from our board and were highly valuable. Following the time spent discussing each question, the group facilitators had a chance to report back to the larger group. Rather than provide all the comments from the evening - that would take up a few copies of Share in their entirety! we ve distilled the most common themes and presented them in two images. Question 1: Why does MSCU exist? Over the years, and perhaps even more so recently during this consultative process, it s been evident that members are passionate about our credit union. The fact that over 350 members and staff attended our AGM is a testament to how much we all care about this financial institution we share. The first discussion helped us to get in touch with that passion, and to make it clear exactly WHY we care. Question 2: How do you see MSCU practically demonstrating our shared values? It s clear we have chosen to bank and work at MSCU because of our faith-informed shared values; it s the biggest differentiator between us and other financial institutions. MSCU must stay true to this core, and as we consider our future direction and name, we must ensure that our members are fully confident that this is the case. The second discussion centred on the way that MSCU lives out these shared values and delved into what we should never lose sight of. Brent Responds to Canadian Mennonite Letter to the Editor re: Our Name April 2015 After a conversation with Al, MSCU chose to respond. We have had several conversations with Al since writing the letter. Letter to the Editor: in response to Al Isaac s letter of March 30th I would like to thank Albert (Al) Isaac for his keen interest and engagement in the future of Mennonite Savings and Credit Union (MSCU). Our journey is enriched with a diversity of committed voices in our membership! Al s current contributions to this process are appreciated and his past work as a committed board member is invaluable. For over 50 years, MSCU has had to balance the pressures of the marketplace with its Mennonite faith commitment. This commitment remains central when issues of growth, sustainability, and marketing are raised. Our ongoing desire is to provide current and future generations a unique and compelling way to live out their faith and values through their finances. With this in mind, it has become clear that increased levels of growth and profitability are needed to sustain the important work of this credit union. The broader financial services marketplace continues on a pace of rapid change and increased competition fuelled by shifts in demographics, technology, and consumer preference. In this context, slightly higher growth rates are a necessary component of achieving our mission and offering our members the breadth of competitive products and services they expect.

3 We have grappled with Al s question of why MSCU is not being actively promoted and championed as an option for people of faith. While our marketing already reaches a faith-based audience outside our traditional Mennonite constituency, many potential members who share our values are not aware they can join. We understand they don t feel welcome due to the perceived exclusivity of our name and increased marketing alone will not bridge this gap in perception. Rather than scrapping Mennonite from the name, we are currently hard at work consulting with members in a thorough and transparent process of change. As a credit union owned by its members, we invite all members to join this conversation and provide input in a number of ways as we continue to plan for the future. In the end, I believe that Al and I want the same thing for our children and grandchildren a vibrant credit union built in community, that offers a way to live out our faith with our finances. - Brent Zorgdrager, CEO, Mennonite Savings and Credit Union Plant seeds for the future of your credit union. Spring 2015 Share Newsletter During the Town Hall Meetings, board members Leroy Shantz and Len Rempel have been acting as moderators and asking senior leaders a series of questions about the future of MSCU, and then encouraging members to respond. If you didn t have the opportunity to attend one of the meetings, we invite you to read the following excerpts from the conversation so far. Leroy: So John, what s going on in the world of credit unions these days? And what s happening at MSCU? John Klassen, Chief Financial Officer: First, it s important to know that in general, financial services in Canada are dominated by the big five chartered banks, as well as several newer virtual banks. Competition is stiff and recently banks have become more interested in agricultural lending an area of expertise for MSCU. However, the sustained low interest rate environment is likely the single biggest factor affecting credit unions today credit unions across Canada are facing radically decreased profitability. On top of that, we have increased regulatory requirements that are driving up our costs and challenging our efficiency. Len: Then, what does this mean for the future of credit unions? And for MSCU? JK: A key study by Deloitte, a large international accounting firm, indicated that credit unions need to go big or go niche. That is, they need to either increase their size, mostly through mergers, or define a unique niche to serve; and even then, size is necessary. Credit unions all around us are merging to become bigger. In contrast, MSCU has been amongst the most successful niche players in Ontario yet we need to grow more quickly in membership and asset size to restore an appropriate level of efficiency and profit margin. Leroy: That sounds like things are working against us. Surely there is more to the picture than that. What do we have working in our favour? Brent Zorgdrager, Chief Executive Officer: Indeed there is good news as well! MSCU continues to benefit from being in a strong capital position and our shares in Qtrade Financial Group are generating significant additional gains for us. We continue to grow organically and we have a strong and growing reputation within the credit union system that indicates we re doing a lot of things right. Over and above all of this, we have our rootedness in the Anabaptist faith, which has moved us to create, and to maintain for over 50 years, a values-based financial institution. This is a unique niche on a provincial and national level! And we lead the way with values-based products like Oikocredit Global Impact GICs, Church Builder GICs, and Member Assistance Services (MAS). Our faith-informed philosophy encouraging members to Share, Save, Spend not just save and spend like the banks clearly sets us apart as well.

4 Len: Given all that s going on in the marketplace and at MSCU, both the favourable and the not-so-favourable, how should we respond? What s the impact on our vision going forward? BZ: While we have had consistent, but modest, organic growth, it s clear that this growth is not sufficient in the long term. The majority of our credit union peers are dealing with this via mergers, but our unique service to communities of faith means there are no credit unions that are clear partners for us at this time. Leroy: So what do you propose we do? BZ: We believe that we should emphasize values that flow from our faith-based, values-driven identity play to our strengths and explicitly invite those who share our values to join us. While remaining abundantly clear about who we are and what we stand for, we want to lift off the bushel basket and put our light on top of a lighthouse. We ve always been very welcoming to those that come into our credit union. In 2010, we expanded our bond, welcoming those who embrace our Statement of Shared Convictions. We believe we now need to be more invitational, to go out and let people know we exist so they can choose us to help them connect their values and their finances. When we expanded our bond, there was some concern that this change would dilute our core essence. I believe that reaching out has actually improved and strengthened our connection to our values. We now talk with clarity and intentionality about our convictions every time we open a new membership. Len: What s stands in the way of growth and how are we addressing those barriers? Pamela Fehr, Vice President, Marketing: We already pursue traditional and non-traditional options to reach people in cost effective ways and we d like to do more. But before marketing more widely, we wanted to understand member and non-member perceptions of our current brand. So we held focus groups, surveyed our members, and surveyed the broader non-member marketplace to see whether they were interested in what we had to offer and what barriers might be in the way. We identified three main barriers. Firstly, many people simply don t know about credit unions, how they are different and that they can offer complete financial services. Secondly, potential members don t understand clearly why we are in business and what we offer at MSCU. And thirdly, and one that brings up many mixed emotions, is our name. As staff and members, many of us identify closely with Mennonite to describe our faith, our culture, our heritage, and our community. However, through the research we conducted, we see that our name is not considered welcoming, even to others who share our faith and our values. Leroy: So what do we do about these barriers? And what about our name? PF: We re working with the Credit Unions of Ontario to help raise awareness of credit unions across the province. And we think we can find different words to more effectively communicate who we are and why we re in business. It s our name that is the challenging question. Through many conversations, we identified three important elements of a name for us: faith, community, and a sense that we are making a positive difference in people s lives. So, with these pillars in mind, we d like to hear member thoughts on the advantages and disadvantages of changing our name. So, how have members responded to these topics raised today and to the question of our name? We are still in the midst of listening to the range of perspectives that you hold. We are hearing all manner of feedback and will reflect on what we hear as we continue with Town Halls. We look forward to sharing a summary with you on what we ve heard later this spring. Stay tuned!

5 Pamela Fehr, Vice-President, Marketing Spring 2015 Share Newsletter Looking out my office window I m reminded we re in the dead of winter. The land is frozen so thinking about planting seeds in my garden is a long way off. Still, there are many steps in the process to reap an abundant harvest and preparation begins long before the soil is ready. At MSCU we are tending the soil of our garden and seeking to plant seeds for our future. By now I hope you ve heard about our Town Hall Meetings. As I write we are halfway into a series of meetings around the topic of MSCU s future direction. Our focus during Town Halls is to share our thoughts with you and hear your voice in response. It s during times like these I m reminded just why I m thankful to work at a credit union. Rather than being driven by shareholder demands, we have the privilege of working cooperatively with our members who are genuinely interested in MSCU s best shared future, and who come to their thoughts and opinions from a set of values that are similar to mine. I m thankful that it s YOU who helps shape my workplace and that during these Town Hall meetings, I m sitting across from friendly, caring faces who have MSCU s collective best interests at heart. The work we re doing and the questions we re asking our members at Town Halls will impact our name, our brand, and our focus going forward. Following the meetings, our leadership team and your board of directors will deliberate on the feedback we ve heard. At our AGM, you ll have a chance to hear our reflections and what we think the next steps are for the credit union. I encourage you to attend our AGM this year and share your voice once again we will talk about our mission, vision, name, and most importantly, the values that continue to define us. Hearing your voice on how we put our faith and finances together matters. Please join us as we tend the soil of our collective garden and plant seeds for our future! Brent Zorgdrager, Chief Executive Officer Winter 2014 Share Newsletter A Journey of Change At our 50th Anniversary Annual General Meeting, following a lively panel discussion about the concept of mutual aid and whether it was relevant in today s society, I asked members what they felt MSCU s role should be in the future. The Board of Directors and senior leadership have been thoughtfully considering this question ever since. We ve had discussions with our staff and with a number of our members around the topic, and we intend to continue this conversation through At this juncture, I share with you some of our thoughts. First, MSCU IS relevant people ARE interested in aligning their faith and values with their finances. Since May 2010, we have welcomed members from other faith and values backgrounds, and have found our new members to be really excited about the ways we express our values through unique financial products as well as our warm, personal service. It makes me believe more people would like to join us if they knew they could! As an example, we heard many people responding to our Spring Investment campaign message, Psst, you don t have to be Mennonite, indicating they didn t realize they could join our credit union. I believe we need to be more expressly invitational to a broader audience. As chief executive officer, I am constantly aware of my responsibility in sustaining a strong financial institution with reasonable earnings to share with our members. Our industry landscape is changing - competition is fierce, and this year we felt intense pressure from the major banks as they once again entered the agricultural sector more aggressively. Credit unions are going through rapid mergers in order to become big enough to compete. After thorough deliberation, our board and leadership have determined that we want to continue to put our values first, and serve members who care deeply about aligning their faith and values with their finances. There are no other credit unions in Ontario with this singular focus and niche. However, the reality is that to compete in this landscape we must grow. We have embarked on a journey of discovery and planning for our future. You are an important voice in this, and we will listen to and talk with you plenty over the coming year. I expect that we will discuss things like our vision for MSCU, our name, our brand, and what amount of profits are shared and how through the course of the year. I believe that we will make progress and come out clearer on the other side. As members, you can look forward to hearing further on this as together we guide the future of our credit union. If you d like to share your thoughts, please contact: Brent Zorgdrager, Chief Executive Officer, bzorgdrager@mscu.com Dale Brubacher-Cressman, Board Chair, dbrubachercressman@mscu.com