Four Credit Unions Pay $24 Million in Special Dividends

Four credit unions from Utah to New York paid their members $23.7 million in special dividends, while acknowledging 2020’s unprecedented challenges.

The payments represented about $29 per each of their 830,482 members and 18 basis points of their returns of 1.29% on $13.4 billion in average assets for the 12 months ending Sept. 30.

The largest came from Eastman Credit Union of Kingsport, Tenn. ($5.9 billion in assets, 256,729 members), whose board voted to pay members $15 million in January as an Extraordinary Dividend. The amount represented about $58 per member and 28 bps of its 12-month ROA of 1.38%.

Since the program began in 1998, Eastman has paid members more than $147 million, including $14 million a year ago.

ECU President/CEO Kelly Price said this year’s Extraordinary Dividend was its largest ever. Like other credit unions, the special dividends aren’t guaranteed. At ECU, the decision is based on achieving a level of net worth that allows for the growth and sustainability of the organization.

“Given the changes 2020 has brought to our lives, we are fortunate to be in a position to give back to our members,” Kelly said. “Members have trusted us to meet their financial needs, and that’s what has made this Extraordinary Dividend possible. It’s been a tough year for many, so we’ve really embraced our ‘ECU Beside You’ philosophy.”

Empower Federal Credit Union of Syracuse, N.Y. ($2.3 billion, 220,381 members) paid members $4 million on Dec. 31 as ‘giveback’ bonus dividends and interest rebates. The amount represented about $18 per member and 19 bps of its 12-month ROA of 0.77%.

Over the past 13 years, Empower has given back $39.5 million to members based on a percentage on savings account dividends earned and a rebate on loan interest paid throughout the year.

“We thank our many members who take advantage of the products and services we offer; and for all your patience and perseverance during these difficult times,” Lori Verzillo, Empower’s SVP and chief retail officer, said.

Summit Credit Union of Madison, Wis. ($4.3 billion, 206,436 members) paid members $2.5 million in November as Cash Boomerang. The amount represented about $12 per member and 6 bps of its 12-month ROA of 1.35%.

Goldenwest Federal Credit Union of Ogden, Utah ($2.1 billion, 146,936 members) paid members $2.2 million in January as a bonus dividend. The amount represented about $15 per member and 12 bps of its 12-month ROA of 1.47%.

The special dividend was Goldenwest’s 17th in a row.

Kerry Wahlen, president/CEO, said 2020 was “a unique and trying year” for Goldenwest and its members, with temporary branch closures and adhering to social distancing needs, and shifting 300 of its employees from working in offices to working at home.

“To have the opportunity to pay a significant bonus dividend in a year with considerable obstacles is a testament to the safety and soundness of this credit union,” Wahlen said. “I could not be prouder of how our leadership team has continued to move forward despite the significant challenges arising from the pandemic.”

So far this season, eight credit unions ($21.5 billion, 1.4 million members) have announced $72.3 million in special dividends. The amount represented about $53 per member and 36 bps of their 12-month ROA of 0.83%.