DCECU Pays Dividend Despite Pandemic, Recession, Flood

The past year was difficult for members of Dow Chemical Employees’ Credit Union. Not only did they suffer the hardships of the COVID-19 pandemic, but hundreds in their Midland, Mich., community were displaced by a flood in May.

Yet, DCECU ($1.9 billion, 70,593 members) was able to pay members $15.6 million Jan. 1, its 40th consecutive “Member Giveback,” despite the year’s challenges.

The central Michigan credit union was among eight in the latest tally by CU Times of special year-end dividends.

Together they paid members $36.9 million in December and January as special dividends. The rebates represented about $49 for each of their 755,331 members and 24 basis points of their returns of 0.94% on $15.3 billion in average assets for the 12 months ending Sept. 30.

The other seven were:

1. Bank-Fund Staff Federal Credit Union of Washington, D.C. ($5.7 billion, 89,995 members) paid members $8.8 million this month as a supplemental dividend. The amount represented about $97 per member and 16 bps of its 12-month ROA of 0.67%.

2. Wright-Patt Credit Union of Dayton, Ohio ($5.8 billion, 417,845 members) paid members $8 million on Jan. 5 as a Patronage Dividend. The amount represented about $19 per member and 15 bps of its 12-month ROA of 1.27%.

3. CoVantage Credit Union of Antigo, Wis. ($2.2 billion, 125,732 members) paid members $4.2 million this month as patronage payment. The amount represented about $33 per member and 20 bps of its 12-month ROA of 0.93%.

4. Fort Worth City Credit Union in Ft. Worth, Texas ($241.4 million, 14,738 members) paid members $750,000 on Dec. 31, 2020 as bonus dividends and loan interest rebates. The amount represents about $51 per member and 33 bps of its 12-month ROA of 0.76%.

5. Illinois State Credit Union based in Normal, Ill. ($154.7 million, 14,056 members) paid members $500,000 on Dec. 23, 2020 as a one-time special dividend. The amount represented about $36 per member and 35 bps of its 12-month ROA of 1.5%.

6. Clarion Federal Credit Union of Clarion, Pa. ($125.7 million, 11,295 members) paid members $350,000 this month as a Special Bonus Dividend. The amount represented about $31 per member and 30 bps of its 12-month ROA of 1.13%.

7. OTIS Federal Credit Union in Jay, Maine ($203.2 million, 11,077 members) paid members $347,796 on Jan. 1 as a Dividend Bonus and Interest Refund. The amount represented about $31 per member and 18 bps of its 12-month ROA of 0.77%.

So far this season, 20 credit unions with $52.5 billion in assets have announced $132.9 million in special dividends. The amount represented about $45 per each of their three million members and 27 bps of their 12-month ROA of 0.99%.

DCECU’s special dividend represented about $221 per member and 85 bps of its 12-month ROA of 0.73%. Last year it paid $20 million, or 1.19% of average assets.

During 2020, the credit union funded more than $360 million in new loans, a 15% increase from 2019.

Michael Goad arrived at DCECU as president/CEO less than two weeks before COVID-19 was declared a pandemic March 11. He replaced Dennis Hanson who retired after 27 years at the helm.

In his Dec. 18 letter to members, he said one reason the credit union was able to continue its special dividend is its adherence to a single branch, which he said “creates incredible operational and cost efficiencies.”

The credit union had 487 members per full-time equivalent employees as of Sept. 30, up 4.1% from a year earlier. Members per employees rose 2.6% to 396 for all credit unions at the end of the third quarter.

DCECU had 145 full-time equivalent employees as of Sept. 30, down 0.3% as membership rose 3.7%. Its net worth ratio stood at 10.28% as of Sept. 30, 54 bps lower than a year earlier. That was on par with the credit union average of 10.44% as of Sept. 30, down 95 bps.

During 2020, more than 98% of members were able to use the credit union through online banking, its mobile app, ATMs, bill pay, remote check deposits, and debit and credit cards. “All others received personal service in our drive-thru, our call center or made an appointment for lobby service,” he said.

“We know this operational model may be getting old for some. We completely understand,” he said. “These decisions are made in the interest of the health and safety of our members, staff and community.”

Some in the area had inconveniences of a different order.

The Edenville Dam in in Midland and Gladwin counties failed during a once-in-500-years rain on May 19. The waters of the lake behind it and the unleashed Tittabawassee River roared 10 miles downstream and overwhelmed the Sanford Dam.

More than 4,000 Midland County homes were reported damaged and as many as 374 families were displaced.

The credit union extended $2.3 million of emergency loans at special rates and terms, modifying payment options where needed. It also gave $200,000 to support local individuals and non-profits during the pandemic and $100,000 to organizations providing relief after the flood.