The $300 million GFA Federal Credit Union of Gardner, Mass., said Friday it is making good on a five-year-old dividend payoff to its members traced to loan loss recovery on a merger with a tiny Massachusetts CU.
"We're happy to give this money back," said Tina M. Sbrega, GFA President/CEO, commenting on a $4,000 dividend rebate to an estimated 150 members of the since-merged Asnacomet FCU of Hubbardston, Mass. The $300,000 Asnacomet was merged into GFA in 2005.
Under merger terms, GFA established a reserve from the remaining Asnacomet capital to cover potential losses from Asnacomet-issued loans. The last of these loans were recently paid off with losses minimal. "Therefore the remaining reserves will be distributed as agreed in the form of a special dividend," said a GFA statement.
The dividend will be paid on a pro-rated basis to former Asnacomet members who have retained their membership with GFA. The individual dividend amounts were determined as a percentage of each member's deposits as compared to the total deposits of Asnacomet members, at the time of the merger.
"We are pleased to give back to the former Asnacomet members who have remained GFA Members," said Sbrega noting the transaction in this situation "is not uncommon" but is a way of honoring a commitment.