Eastman CU Rewards Record $3 Million to Members - Borrowers Included

KINGSPORT, Tenn. – As the Federal Reserve held the reins tight on interest rates, Eastman Credit Union’s upcoming $3.1 million dividend to members had little to do with the stagnancy. Eastman’s President/CEO Olan Jones heartily explains that the dividend was “pretty unique” in that it came about on top of being able to offer members attractive interest rates beating out most of its competitors in the region. This, at a time when some credit union CEOs have mixed feelings about distributing a consistent, annual dividend. “Eastman’s expense structure is much lower than our national peer group,” Jones said. “In short, we’ve held our costs down while expanding the services that we provide to members.” The dividend is the largest in the credit union’s history and will be directly deposited into member accounts on or about Jan. 15. Each member will receive $3.60 in dividends for every $100 they’ve earned in interest on deposits or paid in interest on loans during 2002. Eastman is the largest credit union in the state with 56,000 members and $1.5 billion in assets. Despite a lackluster economy, Eastman will reward all members including borrowers. Speaking hypothetically, Jones said a member who earned $2,000 in interest on deposits in 2002 and who paid $1,000 in interest on loans will receive a dividend payment of about $108. He said it’s not uncommon for some members to receive several hundred dollars in dividend payments. Some many members can expect to receive between $800 and $1,000, Jones added. This is the sixth consecutive year that Eastman has distributed a dividend to its members. The credit union disbursed a $3 million dividend in 1997 followed by $2 million dividends in 1998, 1999, 2000 and 2001. Jones credited members for making the dividend possible, saying they have made extensive use of Eastman’s products and services in recent years, which has boosted the institution’s capital base and service offerings. Since 1997, ECU’s assets have nearly doubled, rising from $630 million to $1.15 billion today. “At the same time, Eastman expense structure is much lower than our national peer group,” Jones said. In September, Eastman partnered with Edwards, Tipton, Witt (ETW) Insurance to offer property and casualty insurance. Jones said officials are “very close” to presenting a proposal to board members on the feasibility of offering member business loans, a move that could have just as strong an impact on the industry as mortgage origination loans did when they launched more than a decade ago, Jones said. Chartered in 1934 to serve employees and families of Eastman Chemical Co., the credit union recently broke ground on a tenth branch in Virginia on scheduled to be complete by mid-2003. A new headquarters is expected within three years. Jones pointed out that many billion-dollar asset credit unions have more than 100,000 members at the least but because Eastman’s members carry a higher than average balance – among the top ten in the nation – growth has come at an unprecedented rate. “It’s important to emphasize that we’re paying the dividend on top of great rates we’ve offered all year long,” Jones said. “We view this as something we’ll do every year. If, for some reason, credit unions were taxed in the future, the dividend would be a rough approximation of what we would pay in taxes.” -