Paying patronage is a direct result of our cooperative structure. Because you, our customer, are a part-owner, you share in our earnings. That is the basic philosophy behind our patronage refund program. No other type of lender offers you such an advantage.

Every year, the board of directors decides how much of the association's earnings need to be maintained as capital to fund the association's growth. After that, we are able to return the remainder as a patronage refund to you.

The most important benefit of our patronage program is that it lowers your effective interest rate. For example, the 2009 payment effectively lowered our stockholders' average interest rate for 2008 by 50 basis points, or one-half percent.

You not only receive a competitive rate up front, but you also could receive a patronage dividend in years when the association does well. The more you borrow, the bigger your share of the earnings.

Lone Star Ag Credit was pleased to return $5.43 million to our borrowers this year based on our 2008 financial results. We also reserved a portion of our net earnings to continue to serve borrowers during tough economic times.

Lone Star Ag Credit is proud to give back to those who helped create our success in 2008. Since 1998, the association has returned $45 million in patronage and stock distributions to its member-owners.