Cash-Back Dividends

Patronage is one of the special benefits of doing business with a member-owned financial institution.  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. 

The amount of a customer’s 2026 patronage distribution will be based on his or her eligible average loan volume with AgCountry during 2026. Generally, the more a customer borrows from us, the more they will benefit financially from the program. Because your eligible average loan volume and the amount of approved patronage can change each year, your cash-back dividend likely will change from one year to the next. 

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. 

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. 

The AgCountry Board currently intends to distribute patronage each year. The Board and our financial plans currently target patronage distributions 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. 

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. 

Generally, customers whose loans are capitalized by stock are eligible for cash-back dividends. These loans include operating and agriculture real estate loans, as well as some consumer-purpose loans secured with real estate (see excluded products).

If a customer has paid off a loan, he/she is eligible for patronage for the period the loan was outstanding, provided it was capitalized at the time of payoff and no exclusions to eligibility apply.

Who is ineligible for patronage?

• Non-accrual loans past due as of December 31.
• Forbearance or restructured loan agreements that include patronage waivers.
• Net charge-offs or debt cancellation, partial or full. Even if subsequent loans are originated, all the customer’s loans are ineligible for a seven-year period, commencing in the calendar year during which the most recent charge-off or cancellation occurred and continuing through the next six successive calendar years.
• Bankruptcy, voluntary or involuntary. If any or all of the debt is subsequently discharged as a result of bankruptcy or similar proceeding, all the customer’s loans are ineligible for a seven-year period, commencing in the calendar year during which the discharge occurred and continuing through the next six successive calendar years.
• Sales contract (Contract for Deed) resulting from a restructured loan.
• Accelerated loans as of December 31. One accelerated loan makes all the customer's loans ineligible.
• A loan participation or multi-lender syndicated loan unless the contract with the borrower specifically provides for the payment of patronage.
• A sold loan participation where the contract with the purchasing institution specifically designates the loan as a non-patronage loan.
• A loan made expressly on a non-patronage basis.
• Cash-back dividends of less than $50.

Excluded products

• Crop insurance, as required by regulations, prohibits the distribution of insurance income directly to customers who generate it.
• Leasing, as required by the lease agreement with our lease processor, Farm Credit Leasing.
• Business Services, including Farm Accounting, Tax, Succession and Retirement services.
• AgDirect equipment financing made after April 11, 2010.
• Certain Young and Beginning program loans.
• Paycheck Protection Program (PPP) loans made through the U.S. Small Business Administration.
• Certain consumer-purpose loans secured by real estate.

Yes. Each January, AgCountry will send an IRS Form 1099-PATR to you. This form will show the total amount of all patronage issued to you during the previous calendar year. Eligible customers generally should include the cash-back dividend in their taxable income in the year that it was received. We encourage customers to consult with a tax advisor about their specific situation. Non-corporate customers will receive an IRS Form 1099-PATR early in 2027 for cash-back dividends paid in 2026. IRS regulations do not require distribution of 1099-PATR forms for corporations.