ESL Members Get $15M Second Helping of Special Dividends
The amount is on top of $20 million that the Rochester, N.Y., credit union paid in June as an early payment.
An upstate New York credit union told members back in June that it was paying them $20 million as their 2020 special dividend seven months early and in lieu of its normal January 2021 payout.
On Friday, ESL Federal Credit Union of Rochester, N.Y. ($8 billion in assets, 374,041 members as of Sept. 30) announced it had changed its mind, and has also put $15 million into their accounts as a second helping of its Owners’ Dividend.
“The $35 million paid in total to members for 2020 upholds our commitment to sharing our financial success with our members,” President/CEO Faheem Masood said in a news release Friday.
“The trust and loyalty of our members throughout our 100 years of serving Greater Rochester allows us to pay out this additional $15 million and supports our purpose of helping our community thrive and prosper in what has been an unprecedented and uncertain time for our community,” he said.
Like all special dividend programs, ESL’s is granted at the option of the board based on its financial criteria. However, ESL has paid a special dividend every year since 1996, and Friday’s payment brings the 25-year total to more than $185 million.
In January 2020, it paid a $20 million special dividend for 2019. The amount equaled about $55 per member and 0.31% of its average assets, compared with its return on average assets (ROA) of 1.46% for the 12 months ending Sept. 30, 2019.
COVID-19 was declared a pandemic in March. In June ESL decided to go ahead and pay its 2020 special dividend early.
In a June 19 news release, Masood said the early $20 million early payment was a “tangible way in which we can support our membership through these challenging times.”
“The COVID-19 coronavirus pandemic has created a great deal of financial stress for many in our community,” Masood said in June. “This $20 million is much more helpful to our members now instead of waiting until our traditional timeframe of January 2021.”
But this month, ESL decided that two payments were even more helpful and it had the reserves to support it.
The $35 million in special dividends is the largest in ESL’s history. It represents about $94 per member and 47 basis points of its return of 1.15% on its $7.4 billion in average assets for the 12 months ending Sept. 30, 2020.
So far this season, CU Times has tallied 22 credit unions ($64.1 billion in assets, 3.6 million members) that have announced $177.9 million in special dividends. The amount represented about $50 per member and 30 bps of their 12-month ROA of 1.00%.