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First of year reaps dividends to members
MADISON, Wis. (1/18/11)--Credit unions taking stock of their balance sheets for the end of the year are busy returning dividends to their members. A number of credit unions recently announced that their members would reap patronage dividends--just another way that credit unions differentiate themselves from other financial institutions. Among them:
* Wright-Patt CU, Fairborn, Ohio, paid $4 million in special patronage dividends to members on Jan. 4, according to the $1.9 billion asset credit union's website. Each eligible member received at least $10, and the average member earned $22.94 last year. Dividends are based on how many services its 202,000 members use. Since 2008, the credit union's goal has been to pay the dividend every year. It has paid $11 million in dividends in the past three years. "We were able to pay this year's …dividend because new members joined WPCU in 2010 and many members took advantage of our excellent savings rates and low rates on loans," said the credit union. * DFCU Financial CU in Dearborn, Mich. reported $19 million in special patronage dividends for its 85,000 members, who received the dividend on Jan. 5. That averaged out to roughly $224 per member. CEO Mark Shobe said on the $3 billion asset credit union's website that the dividend differentiates the credit union from banks. "The dividend is virtually impossible for banks to do. They can't match this." The payout is calculated on the member's total relationship with the credit union--the greater the relationship, the larger the dividend. Qualifying members received 0.5% dividend on their average loan and deposit balances, with each eligible member receiving at least $50. * In Oklahoma City, Okla., FAA CU announced an end-of-the-year rebate for the 10th consecutive year. The credit union returned more than $300,000 to its 45,000 members by direct deposits into their savings accounts with the amounts reflected on their year-end statements. Accountholders with most loan types received a 2% rebate on interest paid in 2010 and most accountholders earned a 2% bonus on dividends earned during the year. "Even though this year continued to present challenges for the financial industry, FAA CU remains strong and our members deserve to be rewarded. Their continued support is what allows FAA CU to prosper and our success means success for them," said President/CEO Steve Rasmussen. * Eastman CU, Kingsman, Tenn., reported handing out $4 million in extraordinary dividends to its 111,000 members--both savers and borrowers. The dividend averaged to $36 per member, said the $2.3 billion asset credit union. * CoVantage CU, an $824 million asset credit union based in Antiago, Wis., announced a $1.5 million patronage dividend--the 25th year it has offered rebates. There are two components to the payment--a savings bonus that provides an additional dividend on earnings paid on select deposit accounts, and a loan interest rebate that returns a portion of the interest members paid on their loans, said the credit union's website. "This year's $1.5 million patronage payment will put money back into the hands of our members and back into the communities we serve," said Board Chairman Bob MacIntosh. "That's what belonging to a credit union is all about." CEO Brian Prunty noted that much of the credit for the credit union's success is "due to the support of our members. We are more than a financial institution, our members own the credit union, and as owners they too share in its successes." * In Schaumburg, Ill., the $723 million asset Motorola Employees CU (MECU) members received more than $1 million in patronage dividends. "In keeping with our promise to put our members first, returning a portion of that money to members is simply the right thing to do--and it also serves to reward those who have supported the credit union over the past year," the credit union said on its website. All members in good standing with active accounts got a minimum $5 deposited to their savings; on average, members received $30 each. The most active members received more than $100.
Most of the credit unions cautioned that while they intend to pay a special dividend every year, it is not guaranteed and the dividend amount depends on the credit unions' financial performance.
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