Members of Servus Credit Union might not have been counting on profit-sharing proceeds from the financial institution for their Christmas gift-buying.
Not only has 2009 been blemished by the severe economic downturn, Nov. 1 was the anniversary of the merger of the former Community Savings, Servus and Common Wealth credit unions to create the new Servus entity.
Yet the amalgamated credit union announced on Wednesday that it’s paying out $42.2 million to members for the fiscal year ending Oct. 31, 2009 — $9.1 million more than was distributed by Community Savings, Servus and Common Wealth for 2008.
“I think that speaks to the success of the merger itself,” said Michael Dickinson, Servus’s director of corporate communications. “We’re a larger financial institution; we’ve got more members, more branches.”
Garth Warner, Servus’s president and CEO, echoed this assessment in a news release.
“Our substantial profit share, as well as our growth in a recession, shows our strength. The amalgamation directly contributed to that strength.”
Dickinson said the profit-sharing payments are already in members’ accounts. That’s a departure from the timelines followed by the former Community Savings, which rewarded its members in January.
The breakdown of monies paid to members of each of the pre-merger credit unions consisted of $14.4 million for Community Savings, $18.2 million for Servus and $9.7 million for Common Wealth. Last year, Community Savings members received $14.8 million, and Servus and Common Wealth a combined $18.3 million.
Dickinson pointed out that the 2009 breakdown is based on the geographic regions that each of the former credit unions covered, and that membership numbers have shifted since the merger. He added that the formula for calculating profit-sharing payouts has also changed for all three.
“A lot of what this year’s is based on is the former Community (Savings) plan, which was, we think, in the long run, a more rewarding way for the members.”
The new formula considered average account balances, term deposits and loan amounts, among other factors. Dividends were paid on common shares and investment shares in Servus.
“What it boils down to is the depth of your relationship with the credit union,” said Dickinson.
In the case of commercial and agricultural members, the patronage reward has taken the form of a service charge rebates.
In addition to member profit-sharing, Servus contributed $1.8 million to community programs and charities during the past year.
Servus is in the process of confirming its 2009 earnings, said Dickinson, with audited financial statements expected to be released by the end of January or early in February. Its annual general meeting is scheduled for March 16 in Red Deer.
Servus has about 400,000 members and operates out of more than 100 locations in 62 communities. Its assets exceed $10 billion.