ANNUAL REPORT 2019

Caisse Desjardins desSeigneuries de la frontière

Head office373, rue Saint-JacquesNapierville (Québec) J0J 1L0450 245-3391

CAISSE DESJARDINS DES SEIGNEURIES DE LA FRONTIÈRE

Note to readers

This annual report provides an overview of Caisse Desjardins des Seigneuries de la frontière's key financial data as atDecember 31, 2019.

This document complies with the reporting requirements of the Act respecting financial services cooperatives and theAutorité des marchés financiers and was approved by the caisse board of directors.

Jean Bourgogne, ChairValérie Leclair, Secretary

About Caisse Desjardins des Seigneuries de lafrontière:

18,286 members

$54,270 given back through our CommunityDevelopment Fund

A dynamic team of managers and employees under thegeneral management of Pierre Savard

Dedicated directors

Jean Bourgogne Chair

Jean-François Bousquet Vice-Chair

Mélanie Viau Vice-Chair

Valérie Leclair Secretary

Isabelle Bourgeois Director

Nicolas Desrochers-Ruhdorfer Director

Yvon Fournier Director

Isabelle Guay Director

Diane Latour Director

Jean-Pierre Paiement Director

Charles Patenaude Director

Guy Trudeau Director

Desjardins Group highlights

Surplus earnings before member dividends up$272 million compared to 2018, for a total of$2,598 million, including:

$1,881 million from Personal and BusinessServices

$729 million from Wealth Management andLife and Health Insurance

$187 million from Property and CasualtyInsurance

$203.5 billion in outstanding loans andacceptances

$67.6 billion in assets under management

21.6% Tier 1A capital ratio

9.9% return on equity, compared to 9.3% in2018

Adjusted return on equity of 8.9%, the sameratio as in 2018

Assets having exceeded $300 billion to total$313 billion

$17,909 million in operating income

$445 million given back to members and thecommunity

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CAISSE DESJARDINS DES SEIGNEURIES DE LA FRONTIÈRE

Caisse Financials

Assets of $728,636K, up 8.7%

Liabilities of $652,360K, an increase of 8.7%

Equity of $76,276K, up 8.8%

Capital stock: $774K

Distributable surplus earnings: $5,896K

Accumulated other comprehensive income: $764K

Reserves: $68,842K

Stabilization reserve: $2,091K

Reserve for future member dividends: $3,514K

Community Development Fund: $227K

Operating surplus earnings of $7,542K, up 44.3%

Interest income totalling $22,523K, an increaseof 19.9%

Interest expenses of $8,927K, up 20.6%

Other income totalling $5,112K, up 3.9%

Non-interest expenses of $10,838K, an increaseof 1.1%

All loans to restricted parties* were granted inAll loans to restricted parties* were granted in

accordance with the caisse's applicable rules ofaccordance with the caisse's applicable rules of

professional conduct. Loans granted to restricted partiesprofessional conduct. Loans granted to restricted parties

totalled totalled $215K.K.

**Restricted partiesRestricted parties include: include:

a)a) Caisse directors and the caisse general manager,Caisse directors and the caisse general manager,

including their relatives including their relatives

b)b) Federation directors, including their relativesFederation directors, including their relatives

Investment Funds

The money that caisses invest in these funds allows the

Fédération des caisses Desjardins du Québec (the

Federation) to invest in Desjardins Group subsidiaries and

regional projects. The table below indicates the caisse's

interest in each investment fund and the fund's return at

the end of the fiscal year.

Provincial funds Value of shares held as at

December 31, 2019($)

Averagereturn

(%)

Société de Services descaisses Desjardins (SER) (213) 0.0

Desjardins CapitalManagement (INV) 43,703 30.6

Desjardins FinancialHolding (FIN5A) 18,744,887 12.2

The Federation's obligation toholders of permanent shares

Further to a recommendation issued by the Autorité des

marchés financiers, the Federation guarantees that it will

indemnify Quebec caisse members holding permanent

shares in the event of losses resulting from

misinformation in the audited Combined Financial

Statements of the Desjardins caisses in Quebec and

Desjardins Group's annual Management's Discussion and

Analysis. These documents are available at

www.sedar.com. The Federation's obligation in this matter

is subject to certain conditions. Holders of permanent

shares can request more information at their caisse.

The Combined Financial Statements of the Desjardins

caisses in Quebec are also available to the public at

www.desjardins.com.

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CAISSE DESJARDINS DES SEIGNEURIES DE LA FRONTIÈRE

Summary of the loan portfolio

As at December 31, 2019, the quality of the caisse's loan portfolio remained high. Gross impaired loans represent just 0.8% of total gross loans. The table below shows the grosscarrying amount of loans and their allowance balance by stage:

Stage 1Non-credit impared

Stage 2Non-credit impared

Stage 3Credit-impared

Total 2019 Total 2018

As at December 31(in thousands of Canadian dollars)

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Net carryingamount

Net carryingamount

Residential mortgages 394,179 75 12,512 69 831 36 407,522 180 407,342 384,297Consumer and otherpersonal loans 21,598 25 1,906 28 23 23 23,527 76 23,451 22,117

Business and government 167,739 74 26,147 122 4,071 344 197,957 540 197,417 177,492

Total 583,516 174 40,565 219 4,925 403 629,006 796 628,210 583,906

For more information, see Note 2, "Basis of presentation and significant accounting policies" to the Combined Financial Statements of the Desjardins caisses in Quebec for the yearended December 31, 2019, available at www.desjardins.com. Certain comparative figures have been reclassified to conform with the presentation to the current year's annualreport.

Summary of the deposit portfolio

As at December 31, 2019, the caisse's member deposits totalled $500,101K, up $30,602K, or 6.5%, year over year. Deposits by individuals provide the main source of funding forthe caisse's expansion. These deposits represent 73.4% of total deposits as at December 31, 2019. The following table shows the breakdown of deposits by type of depositor withamounts by type of savings*.

As at December 31(in thousands of Canadian dollars)

Payable on demand

Payable uponnotice

Payable on afixed date

Total 2019 Total 2018

Individuals 157,438 6,984 202,428 366,850 344,287

Business and government 113,188 510 19,549 133,247 125,207

Deposit-taking institutions - - 4 5

Total 270,630 7,494 221,977 500,101 469,499

*For more information on presentation and significant accounting policies, see Note 2 to the Combined Financial Statements of the Desjardinscaisses in Quebec, available at www.desjardins.com.

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