Capital Farm Credit Approves Patronage Refund

Capital Farm Credit is pleased to announce that the Board of Directors recently approved a resolution to pay a patronage refund based on the Association’s 2009 earnings. We take pride in the fact that our efficient operations allow us to make this distribution even in an economic environment where many other financial institutions have ceased to pay dividends. Our patronage allocation totals $57.6 million, and as in prior years, we will distribute 30 percent of this allocation in cash and 70 percent in the form of allocated equities. The distribution is expected to occur on or before March 31, 2010.

This distribution demonstrates our financial strength and commitment to our membership at a time when many other financial institutions are constrained from a capital position. The general economic conditions, along with adversities faced by agriculture this past year, such as dry weather and lower commodity prices, had a direct impact on our borrowers’ operations and, accordingly, the credit risk of our loan portfolio. While the Association added to its allowance for loan loss account, we also improved our regulatory capital ratio levels.

The Board of Directors believes it is prudent to preserve, protect and improve the Association’s capital position in times of uncertainty and deteriorating loan portfolio trends. For this reason, the Board decided not to retire any outstanding allocated equities in 2009. Please keep in mind that borrowers are not taxed on allocated equity refunds until those refunds are paid to borrowers in cash. Capital Farm Credit will continue to manage our capital position so as to offer competitive interest rates, operate efficiently, and ensure long-term viability. We understand the importance of retiring allocated equities to our stockholders and will continue to evaluate such decisions on an annual basis.

We are proud to share these earnings with our stockholders, and trust that they take pride in having us as their financial partner. We appreciate each customer’s continued support and business.