Desert Financial Pays $14 Million in Special Dividends

Desert Financial Credit Union has announced it will pay members $14 million by Feb. 1, and three others announced special dividends of $1.1 million.

Desert Financial of Phoenix will pay a Member Giveback Bonus that equals about $41 for each of its 343,367 members and 0.25% of its $32.2 million in net income for the 12 months ending Sept. 30, 2020. Its return on its $5.5 billion in average assets for the 12 months was 0.70%.

The credit union told members on its website that the special dividend is “a cashback reward for members who do the most with us.”

“Last year’s bonus was $12 million. We know 2020 was a difficult year for many, but because of our collective resilience and strength in the face of unexpected challenges, we are able to give back EVEN MORE to our members this year,” it said.

Over the past four years, Desert Financial has paid $39 million in special dividends.

Like most programs, Desert Financial distributes the special dividends based on the member’s relationship with the credit union.

For example, a Desert Financial member with an $11,000 deposit balance who made 725 debit card transactions (60 per month) received a $53 bonus. A member with a $13,000 deposit balance, a car loan and a home equity line of credit would receive a $195 bonus.

And the bonus would be $395 for a member with an $18,000 deposit balance, a mortgage, a home equity line of credit and a volume of 955 debit card transactions.

The other three announcing special dividends were:

• Elko Federal Credit Union of Elko, Nev. ($211.5 million, 15,559 members) paid 25 randomly selected members $50,000 on Jan. 4 as loan interest refunds. The amount represented about $3 per member and 3 bps of its 12-month ROA of 1.02%.
• Ideal Credit Union of Woodbury, Minn. ($828.6 million, 51,267 members) paid members $438,200 on Jan. 2 as VIP Plus Patronage Dividends. The amount represented about $9 per member and 6 bps of its 12-month ROA of 0.63%.
• First Financial Federal Credit Union of Sparks Glencoe, Md. ($1.1 billion, 66,091 members) paid members $597,000 on Dec. 31 as dividends and rebates for the fourth quarter. The amount represented about $9 per member and 6 bps of its 12-month ROA of 0.10%.

That brought First Financial’s special dividends for the year to $2.4 million. The amount represented about $36 per member and 22 bps of its ROA.

First Financial President/CEO Eric Church said the rewards program “is an important way we return profits to our members, and we’re glad we were able to continue this program to provide much-needed support throughout the COVID crisis.”

First Financial has also been helping members through the pandemic with loan payment deferral options, increased availability of funds, no-penalty early withdrawals from share certificates and free financial education.

Ideal’s special dividends this year were distributed among 3,381 members in amounts ranging from $50 to $700. Since 2013, Ideal has paid out more than $4.6 million in VIP Plus dividends.

“This is a direct reflection of the cooperative’s stability,” Ideal President/CEO Brian Sherrick said. “Despite the impact of the COVID-19 pandemic, the credit union remains strong and continues to achieve its goals.”

So far this season, CU Times has tallied $193.1 million in special dividends from 25 credit unions with $71.4 billion in assets and four million members. The amount represented about $48 per member and 29 bps of their 12-month ROA of 0.97%.