PSCU Cuts Dividend, Raises Capital Spending

PSCU, the payments CUSO based in St. Petersburg, Fla., said in its annual report that it achieved record revenue in fiscal year 2022 “despite a challenging ongoing economic climate and a looming recession.”

PSCU announced last December that it paid its 2,400 member credit unions a $16.1 million annual patronage dividend, with 30% paid in cash. That was down 9.6% from $17.8 million paid in 2021.

Its annual report released this year for the fiscal year that ended Sept. 30 showed that the 2022 special dividend was about 1.3% of average assets, down from 1.6% in 2021. The ratio has been falling since at least 2016, when it was 5.5% of average assets.

Instead, PSCU has generally been investing more in capital spending. Last year, its capital spending rose 13% to $61.7 million as revenue rose 16% to $753.6 million.

Capital spending has been more than 8% of revenue since PSCU made a three-year $100 million investment to accelerate its “digital first” strategy in 2020. Total capital spending was $165.8 million in those three years, or 8.3% of revenue, up from $86.2 million, or 5.8% of revenue, for 2017-2019.

“Our level of capital spend, which fuels these investments, increased substantially over the past three years,” President/CEO Chuck Fagan and Chair Sean Rathjen wrote in a letter in the 2022 annual report.

The letter cited a multi-year project announced last November to review and refresh PSCU’s long-term business model.

“Our ‘Transforming Together’ initiative, or ‘T2,’ will not only optimize our operating and service models – it will also enable us to become more agile and efficient, while allowing us to continuously invest in new solutions and services for our Owners as we look towards becoming a $1 billion cooperative in revenue within the next several years,” Fagan and Rathjen wrote.

PSCU’s workforce expanded to more than 3,400, up from 2,800 employees at the end of fiscal 2021 and 2,450 in September 2020.