Release date: 4/1/2016
Central Kentucky Ag Credit announced at annual meetings this week that member borrowers of the financial cooperative will receive approximately $2.6 million in patronage distribution. Members who did business with the cooperative in 2015 will receive money during March and April.
The current patronage distribution marks the 19th consecutive year that Central Kentucky Ag Credit has declared a patronage distribution. The distribution is determined after all operating expenses and financial reserves are determined. The cooperative’s board of directors then authorizes the distribution.
The current $2.6 million cash patronage is nearly as large as last year, which was $2.8 million.Altogether, during the past 19 years, Central Kentucky Ag Credit has returned patronage to its members totaling nearly $22 million.
Jim Caldwell, President and CEO of Ag Credit, observed that patronage distribution of the magnitude of this year’s payments are major injections in the regional economy. “With grain and livestock prices uncertain this year, more cash to farmers shores up the farm economy and has positive impact on general spending in the central Kentucky region,” says Caldwell.
Marcus Barnett, Vice President and Chief Financial Officer of Ag Credit said patronage distribution by Ag Credit as a cooperative can be compared to stock dividends that are paid by corporations to their stockholders. “The difference is that Ag Credit patronage payments are distributed to those who use the financial service of Ag Credit .. borrowers are, in fact, our owners,” explained Barnett.
Jonathan Noe, Vice President and Chief Lending Officer of Ag Credit said the cooperative’s patronage distribution is made possible in part because borrowers are meeting their loan commitments to Ag Credit in an outstanding manner. “We are a quality lender, and are pleased that our loan portfolio clearly shows we have thousands of quality borrowers.” Noe went on to explain that AgCredit patronage distribution essentially lowers the effective interest rate of borrowers. “Our interest rates are already competitive, and when patronage is paid the cost of borrowing for each beneficiary of patronage is reduced,” says Noe.
Ag Credit’s service to member-borrowers during the past decade has expanded significantly,with more than $400 million in loans outstanding to Ag Credit borrowers. The financial cooperative provides lending services through six full-service offices in the Bluegrass Region
Central Kentucky Patronage Distribution Pattern
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