State Employees’ Credit Union in Raleigh, N.C., plans provide $1,000 in bonus pay to all 7,200 full-time employees to thank them for their hard work and flexibility during the coronavirus crisis.
The announcement came late on March 11, the one-year anniversary of the World Health Organization declaring COVID-19 a global pandemic.
“It’s a reward in recognition of the great work that has been done by our staff under great distress during this time of great disruption in their personal lives,” SECU President and CEO Mike Lord explained Friday. “Our staff have adjusted to the trauma of COVID, served our members very well, and this is a recognition by the board of directors of the fine work they’ve done.”
Many credit unions rolled out hazard pay, raised wages or provided other bonuses in the early days of the pandemic, but many of those efforts had
After taxes, benefits, 401(k) matching and more, the total cost for the bonuses is expected to be about $8.5 million. Call report data from the National Credit Union Administration shows SECU earned $248 million in 2020, about $5 million (2%) over earnings from 2019. SECU is the nation's second-largest credit union and holds assets of more than $47 billion.
Lord said the bonus was driven in part by strong financial performance last year in spite of the pandemic.
“We have to be able to afford it and make sure we’re in good financial shape,” he said. He added that because of uncertainty surrounding the possibility for loan losses, management, “set a tremendous amount aside in our allowance for loan losses to make sure we were safe and sound and adequately reserved.” That equated to a nearly 45% increase in allowance for credit losses, totaling nearly $413.5 million at year-end. Close attention was also paid to managing operational expenses and investments, and the credit union halted hiring on all but mission-critical positions. While loan interest rates were already low due to the economy and actions by the Federal Reserve, SECU also cut its deposit rates.
The credit union finished the year with loan balances up 0.6%, and while many loan categories saw slight declines, first-mortgage balances rose nearly 1.4% to reach nearly $18.8 billion. “We have the largest volume of mortgage activity in our history and a big chunk of that was refinancing,” noted Lord.
SECU’s bonus announcement came on the same day President Biden directed states to make all Americans age 16 and older eligible for the COVID-19 vaccine by the first of May, and Lord was scheduled to receive his second dose of the vaccine by the end of the day Friday. He said the credit union will strongly encourage all employees to get vaccinated, though it
Even with ongoing vaccinations, Lord said SECU, “will probably maintain our work-from-home posture for several more months,” but added that remote work “is going to be a permanent part of our offerings going forward for our staff, because we found a lot of folks like it…we’ve also found a lot of folks who don’t like it at all.”
Last month, Lord
