Patronage Program

About Us - Patronage Program

Being a member has its rewards...

An important benefit of being a member-owner of AgCountry Farm Credit Services is the ability to share in the earnings of the association. While most businesses return their profits to outside investors, we believe in the importance of cooperative ownership.

AgCountry’s patronage program grants the Board of Directors the ability to distribute a portion of net income back to its member-owners.

As a cooperative organization, we pride ourselves on our ability to offer value added initiatives and opportunities. We have continually worked to build and maintain a strong and stable organization, and we feel the patronage program is another great way to better serve you.


Frequently Asked Questions... 


Why does AgCountry offer a Patronage Program?

Patronage is one of the special benefits of doing business with a customer-owned financial institution. Also, AgCountry is able to offer a cash patronage program because of the financial strength we have achieved. This strength helps us remain financially strong to overcome unexpected changes in the agricultural economy while supporting future business growth.

What is patronage based on, and how is it calculated?

Patronage eligible business is defined as loans which are in good standing originated by AgCountry to B-stock and Participation Certificate holders. Asset Pool loans and loan participation or syndication interests which are either purchased or sold where the underlying contract requires payment of patronage are also patronage eligible business. RFL loans, all leases, and all financial services are not patronage eligible business. Loans receiving financing pursuant to AgCountry’s Consumer Home Loan Program with closing dates after January 1, 2018 are not eligible to receive patronage.

Loans closed under the Consumer Home Loan program prior to January 1, 2018 were originated as patronage eligible loans and are therefore eligible to receive patronage. Recognizing that these “Consumer Home Loans” were originated through a separate program with special pricing, underwriting and compliance requirements, the patronage calculation for 2019 for such loans also takes into account an adjustment whereby the 2019 patronage dividend is arrived at by factoring the patronage amount by a percentage (not to exceed 100%) corresponding with the 2018 year-end return on assets for the Consumer Home Loans. The Board approved this mechanism to better ensure an equitable contribution to retained earnings from these loans while still paying patronage to our patrons based on the value and volume of business. For 2019, these Consumer Home Loans will received 100% of the eligible patronage based on the expected return. Consumer Home Loans includes only those patronage eligible consumer loans secured by a dwelling originated pursuant to the AgCountry Consumer Home Loan Program and the United FCS Consumer Home Loan Program.

How and when will patronage for a given year be determined?

At the end of each calendar year, the Board of Directors will assess, among other factors, the association’s capital position, earnings, and asset growth outlook, and will determine if a patronage distribution is to be made and set the amount to be distributed.

How will the patronage program affect my interest rates?

Your Board’s stated intent is to not increase interest rates in order to pay patronage. In keeping with this philosophy, AgCountry will first and foremost maintain a competitive pricing program and distribute patronage from any earnings in excess of those needed to maintain a strong capital position and financially sound business.

Will AgCountry distribute patronage every year? If so, will patronage payout be consistent year-to-year?

The AgCountry Board currently intends to distribute patronage each year. The Board and our financial plans currently target patronage distributions equal to 100 basis points for the foreseeable future, barring unforeseen events and significant change in economic conditions. However, patronage may vary as the earnings and capital needs of the cooperative change.  

Do I have to pay taxes on patronage payments?

Yes. Patronage distributions are taxable and eligible customers should generally include the patronage payment in their taxable income. We encourage you to consult with your tax advisor about your specific situation.

What changes have been made to the 2020 patronage program? 

The 2020 patronage program provides for distribution of patronage-sourced earnings from a general pool and will no longer include a separate patronage allocation for the patronage eligible Consumer Home Loans. Distributions will continue to be calculated based on eligible average daily loan volume during 2020.

Will I receive a tax notification regarding my patronage?

Yes. Each January, AgCountry will send an IRS Form 1099-PATR to you. This form will show the total of all patronage issued to you during the previous calendar year.