3 Credit Unions Announce Millions in Special Dividends

Three credit unions have announced $9.1 million in special dividends to be paid this fall to more than 300,000 members in Tennessee, Alabama and Iowa.

NCUA data showed the combined special dividends represented about $24 per member and 17 bps of the credit unions’ ROA of 1.41% for the 12 months ending June 30. ROA for all credit unions was 0.96% for the 12 months ending June 30, up from 0.71% in the previous 12 months.

The three credit unions were the first round of the 2021-2022 season of special dividends tallied by CU Times. They included:

• Coosa Pines Federal Credit Union of Childersburg, Ala. ($316.6 million, 23,940 members), which will pay members $350,000 Nov. 23 as a bonus dividend and loan interest refund. The amount represented about $15 per member and 12 bps of its ROA of 1.02% for the 12 months ending June 30.
• Dupaco Community Credit Union of Dubuque, Iowa ($2.6 billion, 141,699 members), which paid members $3.7 million Oct. 21 as bonus patronage dividends. The amount represented about $26 per member and 16 bps of its ROA of 1.74% for the 12 months ending June 30.
• ORNL Federal Credit Union of Oak Ridge, Tenn. ($2.9 billion, 211,879 members), which paid members $5 million Oct. 22 as a special dividend. The amount represented about $24 per member and 18 bps of its ROA of 1.16% for the 12 months ending June 30.

ORNL FCU said more than 123,000 of its members received a special dividend, making the average payout $39. Members were paid based on the depth and breadth of their relationships and balances over the last 12 months.

The east Tennessee credit union said its dividend was about 11 basis points of the 12-month average balance of all loans and deposits for each member.

For the fourth year in a row, the ORNL Federal Credit Union (ORNL FCU) board of directors approved a special dividend to be shared across the membership. The $5 million special dividend was issued to members on Friday, Oct. 22. ORNL FCU has returned more $16 million to members since 2018, including this year’s payout and $4 million in October 2020.

“2021 has been another incredible year for ORNL Federal Credit Union and our members,” Randy Gorman, chair of the ORNL FCU board, said. “Despite the challenges we have faced for almost two years due to the ongoing pandemic, we continue to experience strong growth. We remain committed to providing value to our members who have made ORNL FCU their trusted financial partner.”

For the third year in a row and coinciding with the special dividend announcement, ORNL FCU also revealed that seven randomly-selected members had their auto loan balances paid off in full. In addition to paying these auto loan balances, the credit union provided each of the winning members with a check to cover the estimated taxes they would owe on the value of their loan payoff.

Coosa Pines’s board decided in October to issue bonuses and interest refunds based on the credit union’s success this year. It announced its bonus dividend and loan interest refund on Nov. 5 to its members, who live or work in a six-county area that includes Birmingham, Ala.

“Sound investments, good decision making and responsible borrowing by our members yield positive results,” President/CEO Don Carden said. “While the purpose of a bank is to make money for its shareholders, as members of a financial cooperative we all share in the success of our credit union.”

The dividend bonus was figured using 5% of dividends earned on the member’s share savings account from Jan. 1 to Sept. 30. The loan interest refund amount was determined by 5% of the loan interest paid for the same nine months. Certain exclusions apply, but the credit union said qualifying members will see a deposit in their share savings account in time for Black Friday shopping.

Like all credit unions, Coosa Pines’s bonus dividend and interest refund are not guaranteed. They are based on the current year’s results and projections for the following year.

“Every member is an owner of Coosa Pines,” Carden said. “Every decision we make is with their financial success in mind. We are elated when we can save them money, reduce financial stress, or share with them a bonus and refund like this.”

Dupaco Community paid its bonus patronage dividends to nearly 64,000 members who participated in its “Thank Use” program in the nine months ending Sept. 30. The average payout this year was $55.

This is the sixth consecutive year Dupaco Community has paid a participation dividend. Since 2016, Dupaco has paid more than $20.5 million in Thank Use directly to member-owners.

The Thank Use campaign rewarded members in relation to each member’s active participation in the credit union. An active share draft checking account was required, and the amount of the dividend was based on a member’s use of services, including loans, savings, checking, insurance, investments, debit card and credit card.

Dupaco Chief Marketing Officer David Klavitter said the Thank Use dividend demonstrates the power of Dupaco’s member-owned, cooperative structure.

“Dupaco is more than local. It’s a financial cooperative, owned by people in our community,” Klavitter said. “The more members use their credit union, the more members, the community and Dupaco benefit.”

Dupaco serves residents in 112 counties throughout Iowa, northwest Illinois and southwest Wisconsin.

In the 2020-2021 season, CU Times tallied 35 credit unions that announced $206.8 million in special dividends. The amount represented about $43 for each of their 4.8 million members as of Sept. 30, 2020 and 27 bps of their 12-month ROA of 0.90%.