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Shamrock FCU: Epitomizing the Difference between CUs and Banks
Tuesday, October 13, 2015 6:55 AM

Recently, Cornerstone's VP Asset/Liability Management Debbie Rightmire and Financial Analyst Vicki Larkin were preparing the June 2015 Key Ratio Report for Shamrock Federal Credit Union. 

Through June the Dumas-based credit union reported an operating loss of more than $500,000. "This is a very good credit union," Rightmire suggested. "It typically has positive net income, and we were concerned there had been an error in disclosure. When we contacted the credit union, they told us everything was true." 

Rightmire visited with Shamrock Operations Manager Scott Snyder. He explained that the board of Shamrock FCU decided they had plenty of capital, they were a safe and sound institution, and they wanted to give some of their excess earnings back to their member/owners. To accomplish that, the credit union offered a one percent interest refund to borrowers and a one percent bonus dividend to savers. It was paid during the first six months of 2015 and based on December 2014 average balances on loans for the interest rebate, and December 2014 average balances on regular share and share draft accounts. IRA and CD accounts were not included in the calculation.

The credit union has no plans to make this an annual occurrence, but they decided it was appropriate based on 2014 earnings. "While it did reduce their net worth position slightly," Rightmire said, "the credit union is so well capitalized and experiences good earnings under normal circumstances, it actually had a far less negative impact on their operation than they had anticipated.

Rightmire suggests that “The decision to authorize bonus dividends and interest refunds is one of the many things that make credit unions unique. It is a testament to the fact that the overall credit union movement is strong. In 2014, more than 20 credit unions in the Cornerstone region gave excess profits to their members in the form of bonus dividends and interest refunds. It proves that we think of our members as owners of the credit union are willing to share excess profits when appropriate."