Credit Union and Cooperative Patronage Refunds - Filene ...

CoVantage Credit Union
CoVantage Credit Union is based in Antigo, Wisconsin, and operates
nine branch offices in 17 counties (15 in Wisconsin, 2 in Michigan),
most of which are rural and considered to be populated by a
largely blue- collar workforce. CoVantage recently opened its third
branch in the greater Wausau area, the largest community in which
it does business. CoVantage also operates about a half dozen Kids
Credit Unions in Middle Schools across its trade territory. But of the
$850M in assets, less than $125M is from the Wausau membership.
As of December 31, 2010, CoVantage had just over 62,000 members
(6% of potential members), 215 full-time employees, and total loan
volume of $651.0M. Membership grew by 5.98% in 2010. Brian
Prunty is CoVantage’s chief executive officer.
CoVantage is one of the 27 credit unions in Callahan’s database that
paid a patronage refund in each of the last five years, and is in the
top 10 of those 27 credit unions on a number of measures. CoVantage
is 3rd in five-year loan growth, five-year member growth, and
five-year share growth; 5th in one-year loan growth; 7th for its 2004
and 2009 return on assets (ROA); and 10th for its dividend payment
as a percent of total shares (in dollars).
CoVantage’s average cash patronage refund over the last three years
totals $1,341,936, and its earnings (including the refund) averaged
$6,939,880 during that time. So over the past three years,
CoVantage has paid an average of 19.34% of its earnings in cash on
a patronage basis to members, ranking it 19th out of the Callahan 27
for its interest refund as a percentage of earnings.
CoVantage has paid a cash
The leadership of credit unions must evaluate what they are patronage refund since 1981. Its
doing and how well the credit union is performing before they 19th-place ranking for the size
determine whether the credit union can justify paying bonuses of patronage refund as a percentage
of earnings suggests that
or rebates on top of what it is paying for share deposits or
charging for products and services.
paying a patronage refund is not
everything or the only thing.
Many factors determine the
success of any person or business. More important than the size of
the patronage refund is what it says about the business organization.
CoVantage’s patronage refund is consistent with its overall philosophy
that it is a financial co-op that belongs to its members.
Employees view members as the real owners. CoVantage exists
to help its members. Like any credit union, CoVantage does not
allocate its earnings—and equity—to members on the basis of share
ownership or loan volume, but it acts like it does. Hence, CoVantage’s
earnings “belong” to its members, which makes it less difficult
to pay a cash patronage refund to members.
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