I’m pleased to report that the Wright-Patt Credit Union Board of Directors voted to return approximately $5 million in excess earnings to eligible member-owners for their use and support of the credit union during 2011 on January 4th. This is the fourth year in a row we’ve been able to pay such a dividend!
Patronage dividends like this are unique to cooperatives … you’d never find a for-profit bank giving back earnings at the end of the year. Indeed, even among credit unions only a handful make a habit of returning excess profits to their member-owners at the end of the year.
Wright-Patt Credit Union, however, believes in the not-for-profit, member-owned cooperative business model that says WPCU truly belongs to members. Hence, any profits in excess of those needed to pay operating expenses and build strong safety reserves should be paid to members.
Our formula for calculating how much each member receives is based on usage of the credit union. Obviously, a member who has a WPCU mortgage loan, checking account, car loan, eStatement, and maybe a share certificate has provided more resources to the cooperative than has a member who may have only a few dollars on deposit.
The formula for calculating individual dividends recognizes the variety of ways members contribute to our success. Some members are net depositors who keep substantial balances and thus provide the raw material for making loans. Other members are net borrowers whose interest payments create the cash flow for paying dividends, operating expenses, and building safety reserves. Still other members use their credit union in ways that reduce operating costs, such as choosing eStatements or managing transactions electronically rather than visiting Member Centers.
Of course, most members do a little of each … saving some, borrowing some, and using some level of eServices. The point is, we all need each other to make the cooperative work best for everybody, and so any Patronage Dividend must consider all the different ways members support our success.
Patronage Dividends are never guaranteed. The credit union’s ability to pay a Special Patronage Dividend depends on a variety of factors. Most important, members must use their credit union. The more services used by members, the greater the revenue available to pay expenses and strengthen safety reserves. It also depends on management’s ability to efficiently operate the credit union while meeting member needs. The level of safety reserves is also important, as keeping your money safe is our top priority. When all these come together, we have the best chance of being in position to return excess earnings to members.
We are indeed thrilled to be able to pay a dividend for 2011. Yet we recognize that we start all over again on January 1, 2012 when our earnings start again at zero, to be built up through the year based on how much members choose to utilize the cooperative they own. Will we pay a dividend again in 2012? It’s up to the members. So please consider your credit union when thinking about your family’s finances. And tell your friends and co-workers about us. No bank in town will give back their extra earnings, but to us, giving back is exactly the point.
Thank you for choosing to be a member in 2011, we appreciate the trust you’ve shown in us. And we look forward to serving you in 2012.
Douglas A. Fecher
President & CEO
Wright-Patt Credit Union, Inc.