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Patronage Hero: LSAC Credit Office President, Gerrit Schouten and LSAC Customer-Owner, Ryan Moore

Patronage Dividends = Cash Back

Sharing Our Earnings with our Customer-Owners

AgTrust Farm Credit is a customer-owned lending cooperative. That means our members are also owners and have the opportunity to share in our earnings through an all-cash patronage dividend. We believe in giving back to the valued membership who make our success possible.

Patronage Dividends

We’re pleased to announce our 2022 patronage distribution to eligible customer-owners this spring.

$26M

patronage distributions on 2022 earnings, the largest distribution in AgTrust’s history

$165M

total distribution returned to borrowers in 10 years

1.25%

average reduction of the effective interest rate paid by borrowers in 2022

19

offices covering 81 counties throughout Texas and New Mexico

This year’s largest cash distribution

We are extremely pleased that AgTrust Farm Credit was able to distribute $26.0 million in patronage dividends on 2022 earnings. The all-cash distribution effectively reduces the interest rate paid by each eligible customer-owner in 2022 by an average of 1.25 percentage points!

This record patronage is a great indication of AgTrust’s continued financial health and commitment to our stockholders and was paid out in two distributions.  With this $26.0 million distribution, AgTrust Farm Credit will have returned $165 million to our customer-owners over the last 10 years!

The Moore Family’s Success Story

Outside the city limits for generations to come.

What is a Patronage Dividend?

Financing rural land with AgTrust Farm Credit has great benefits.

Patronage Program

Annually, the Board of Directors establishes a capitalization plan that considers many factors including anticipated loan growth, interest rate forecasts, among other financial and economic factors. The long-term viability of the Association depends on organically building capital through retained earnings to fund future loan demand and other credit services needed by members. When goals for that capital plan are met, the board typically approves the payment of a portion of net income to members through our patronage program.

Cash patronage is allocated among stockholders based on their economic contribution to Association earnings; that is based on net interest margin calculated as the interest income earned less interest expense. Eligible patronage recipients are those who have conducted Patronage Business with AgTrust Farm Credit during the year which has positively contributed to the Association’s income. Net earnings from transactions that do not qualify as Patronage Business are treated as non-patronage sourced earnings and excluded from the computation of the patronage distribution.

Patronage dividends for the previous calendar year are paid during the first quarter. Assuming the Association meets its financial goals, and other factors do not adversely impact the Association, the board’s objective is to annually return net earnings in excess of those necessary to operate and grow capital in a safe and sound manner.

FAQ’s

AgTrust Farm Credit follows the fundamental cooperative principle of sharing success with its customer-owners in the form of patronage when it does well. Thus, a patronage dividend is a means of allocating a portion of patronage sourced earnings – minus operating expenses and necessary reserves – to our customer-owners.  Annually, the board of directors evaluates the Association’s financial performance, considers long term capital needs, and may declare a patronage dividend to be paid.  The patronage dividend can be in the form of cash, allocated surplus, stock or any combination of these.  AgTrust Farm Credit has well established history of paying an all-cash patronage dividend.

Owning stock or participation certificates may make you eligible to receive patronage dividends.  Exclusions from patronage eligibility are determined by the board of directors annually and include: (a) all loans with the borrower when any loan with such borrower has a charge-off in whole or in part that has not been fully recovered; (b) a loan that is in non-interest earning status, as designated by the Association, as of the end of the year; (c) a loan that was designated by the Association as being in non-interest earning status and was not fully restored to accrual status or was liquidated prior to year-end at an amount less than the full balance owed unless such loan is current and has contributed to interest income on a cash basis; (d) a loan for which the borrower has declared Chapter 7 bankruptcy and, as of the end of the year or as of the time the cash patronage checks are issued, has not reaffirmed the debt or has reaffirmed the debt on terms other than those set forth in the loan documents; (e) a loan for which the borrower has declared bankruptcy and, as of the end of the year or as of the time the cash patronage checks are issued, is not operating under a confirmed plan or is operating under a confirmed plan that modified the terms of the loan documents; and (f) any advances or extensions in connection with debtor-in-possession financing.

Each customer owner’s patronage dividend; unless subject to applicable contractual limitations, is based on their economic contribution to AgTrust Farm Credit’s earnings. In other words, the proportion of interest earned on your loan to the total interest earned by us. Thus, the more you contribute to AgTrust Farm Credit the larger your potential patronage dividend.

Patronage History

Year Total Cash Payout to Eligible Customer-Owners
2022 $26.0 Million
2021 $24.1 Million
2020 $22.2 Million
2019 $19.5 Million
2018 $20.4 Million
2017 $7.0 Million
2016 $13.8 Million
2015 $12.8 Million
2014 $12.1 Million
2013 $12.0 Million

Learn More

Learn more about AgTrust Farm Credit