Midwestern CUs Pay Members $ 27.7 Million In Special Dividends

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The surge in net income allowed three Midwestern credit unions to return $ 27.7 million to their members in December in the form of special dividends despite the challenges of another pandemic year.

Together, credit unions earned $ 157 million in the 12 months ending September 30, or 1.11% of their average assets, compared to an ROA of 0.82% in the previous 12 months. Dividends were about $ 38 per member and 20 basis points of their recent 12-month ROA.

The largest special dividend came from Citizens Equity First Credit Union of Peoria, Ill. ($ 7.6 billion in assets, 368,516 members), which paid out $ 20 million to its members on December 1. .

President and CEO Matt Mamer said the credit union was able to pay the extraordinary dividend thanks to “another successful year.” CEFCU’s net profit was $ 46.7 million in the 12 months ending September 30, compared to $ 29.9 million in the 12 months ending September 30, 2020.

The $ 20 million payout represents approximately $ 54 per member and 28 basis points of their 0.65% ROA for the 12 months ending September 30. However, the payout is down from the $ 30 million he paid in December 2020, which was roughly $ 85 per member and 46 bps of his 0.46% ROA for the 12 months ended September 30, 2020. .

“Every year is different,” Mamer said in a 2-minute video, “Defining Better Together: The Extraordinary Dividend”.

“We face new challenges every year, so an extraordinary dividend is not guaranteed. We have been fortunate to have been consistent over the past two years, ”said Mamer.

“When we have enough capital to cover both our expenses and the needs we have and plan for in the years to come, we look at that. Our board is convinced that the surplus is our members’ money, so we return it to our members, ”he said.

The dividend is distributed equally according to the savings and the loan. Tim Dunton, the credit union’s delivery manager, said in the video that the interest members pay on loans and earn savings is used to calculate the dividend. “It gives us this fair way of returning excess capital to our members. “

The other two credit unions with special dividends were:

  1. Summit Credit Union from Madison, Wisconsin ($ 4.8 billion, 220,198 members), which paid members $ 2.7 million as of Dec. 10 in the form of a Cash Boomerang payment. The amount represents approximately $ 12 per member and 6 basis points of their ROA of 1.68% for the 12 months ending September 30.
  2. CoVantage Credit Union Antigo, Wis. ($ 2.6 billion in assets, 138,194 members), which paid members $ 5 million in December as a kickback. The amount represents approximately $ 36 per member and 21 basis points of their 1.4% ROA for the 12 months ending September 30.

CoVantage’s board chair, Susan Gitzlaff, told year-end board meetings that directors assess how much income is needed on reserves to protect the credit union and to fund the regular dividends and operating expenses.

CoVantage CU held $ 2 billion in loans as of September 30, up 21.4% from the previous year. Auto loans increased 42% to $ 572.4 million, and first mortgages increased 24.5% to $ 860.9 million. Stocks and deposits rose 18% to $ 2.3 billion, and memberships rose 9.9%. Net income increased 77% to $ 14.8 million for the 12 months ending September 30.

“Because we have experienced phenomenal growth in loans, deposits and new members, we were excited to determine that we were able to provide over $ 5 million – our biggest patronage payment ever – to our members,” said Gitzlaff.

Last year, CoVantage CU’s special dividend was $ 4.2 million, including almost $ 4 million in interest payments.

So far this season, 18 credit unions ($ 75.5 billion, 4.3 million members) have announced $ 167.3 million in special dividends. The amount represents about $ 39 per member and 24 basis points of their 12-month ROA of 1.32%, compared to 1.02% of ROA for the previous 12 months.

Credit unions interested in sharing their special dividend announcements can email them to [email protected].

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