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​Patronage Shares

A patronage distribution is our way of thanking you, our members, for doing business with us and being an active member of your community – it gives the credit union an opportunity to share our profits, while maintaining a strong equity position. Credit unions distribute returns based on the amount of interest paid and earned. The more that members entrust their financial lives to us and the more business they do with us, the larger the potential patronage return. Truly, we win together!

​What is a patronage share account?

A patronage share account is an account the credit union opens on the member’s behalf. It accumulates:

  • Patronage distributions
  • Dividends paid on the patronage share account
  • Dividends paid on membership share account 

Members can transfer funds from their patronage share account at any time, but we encourage you to keep your patronage shares to earn possible future dividends.

​Can I buy more patronage shares?

No, you can’t. Patronage shares cannot be purchased – they can accumulate only with dividend payouts and distributions.

​What is the patronage distribution?

A patronage distribution is a way of sharing the credit union’s profits with its members. As an owner of the credit union, you may receive a patronage distribution from time to time.

​How is the patronage distribution calculated?

Each member’s share of the distribution is based on the interest earned on deposits (including registered plans) and interest paid on loans or mortgages.

The distribution is equally shared between savers and borrowers. It is calculated by taking the member’s proportion of total interest earned and/or paid by the credit union during the fiscal calendar year, and applied to the total distribution declared. The minimum distribution amount is $1.

For the fiscal calendar year of 2017, the Board of Directors declared a Patronage Distribution in the amount of $225,000. This was posted to members’ patronage accounts (PatShare) in July 2018.

For the fiscal calendar year of 2018, the Board of Directors declared a Patronage Distribution in the amount of $250,000. Similar to 2017, half of the Patronage Distribution is allocated to members that received interest on their savings and term deposits, and the other half is allocated to members that paid interest on their loans and mortgages.

Simplified examples for 2018 Patronage Distribution of $250,000 ($125,000 to savers and $125,000 to borrowers):

  1. If in December 2017 a member had invested $100,000 into a 5 year term deposit at 2.75%, that member would have earned approximately $2,750 in interest in 2018. In that same year, Moya Financial paid over $2.5 million on savings and term deposits. Therefore, that member would receive a Patronage Distribution of $137.50: $2,750 interest earned divided by $2.5 million multiplied by $125,000 equals $137.50 $2,750 ÷ $2.5 million x $125,000 = $137.50
  2. Similarly, if in December 2017 a member had borrowed $100,000 in a 5 year term mortgage at 3.25%, that member would have paid approximately $3,250 in interest in 2018. In that same year, Moya Financial earned over $6.0 million on loans and mortgages. Therefore, that member would receive a Patronage Distribution of $67.71: $3,250 interest paid divided by $6.0 million multiplied by $125,000 equals $67.71 $3,250 ÷ $6.0 million x $125,000 = $67.71

​How does the patronage distribution benefit members?

Patronage distributions benefit borrowers by effectively reducing their cost of borrowing. They benefit depositors by paying a bonus on their deposits.

​How is the patronage distribution paid?

If the Board of Directors declares a patronage distribution, it is usually paid out the following year into a patronage share account. Members will see “patronage share account” on their online banking page. The amount paid to each eligible member is based on that member’s business with the credit union, with a minimum benefit of $1.

​Is there a maximum dollar amount on my patronage share account?

No, patronage share accounts are unlimited.

​Is the patronage share account protected by FSRA?

No, patronage shares issued by the credit union are NOT covered by the Financial Services Regulatory Authority of Ontario. For more information, visit FSRA's website.

​What is the difference between membership shares and patronage shares?

You must have membership shares to be a member of Moya Financial. Members can increase their membership shares, if they wish, up to $1,000 to take advantage of any possible future dividend payouts by the credit union.

Credit unions open patronage share accounts on behalf of members. The patronage share account accumulates dividends paid on membership shares, dividends paid on the patronage share account, and patronage distributions based on interest paid or interest earned.

​Why did I not receive the patronage distribution?

You may have money in a chequing account, without any other deposit or loan products. Since we don’t pay interest on our no-fee chequing accounts, they don’t qualify for the distribution.

​What are the tax consequences?

Any dividends on membership shares and patronage shares, as well as any patronage distributions are taxable in the year received and will be included on your T5.

​Will the patronage distribution be declared every year?

Not necessarily. But we hope to declare patronage distributions more often. The Board of Directors is authorized to make that decision based on yearly financial profits, while ensuring the long-term financial success of Moya Financial.

​Are dividends paid on my patronage shares?

Yes. The dividend is determined by the Board of Directors and depends on the credit union’s financial performance.

For our 2018 fiscal year, the Board of Directors declared a 4% dividend on Membership and Patronage shares.

The dividends were processed on May 30, 2019. The minimum share value required to receive a dividend is $25 (as directed by the board), resulting in a minimum dividend of $1. This applies to both membership and patronage shares. Both dividends were posted to the patronage share account. Dividends were rounded to the nearest dollar. Share values are the minimum of the amount as at December 31, 2018 and the amount as of May 29, 2019.

For example:

  1. A $50 patronage share received a $2 dividend.
  2. A $60 patronage share received a $2 dividend (rounded down).
  3. A $70 patronage share received a $3 dividend (rounded up).