At a time when many reports coming from the financial world are delivering bad news, Capital Farm Credit is still doing well — and, more importantly, is sharing its success with its borrowers.
More than 13,000 customers of Capital Farm Credit, the state’s largest cooperatively owned rural lender, received checks recently as their portion of an $18.9 million cash patronage dividend. In addition, another $43.5 million of the co-op’s earnings were allocated to customer-stockholders for potential distribution in the future..
“We have an advantage as a cooperative lender, because our borrowers are also our stockholders. That means they are the ones who benefit when we do well, and we are pleased to be returning almost all of our 2007 earnings to them,” said Ben Novosad, Capital Farm Credit chief executive officer. “This cash patronage effectively reduced the interest rate paid by our borrowers in 2007 by an average of 65 basis points, or 0.65 percent.”.
Capital Farm Credit has a history of paying patronage to its customers. Cash distributions have increased over the years, and the lender expanded the program last year by beginning to allocate equity for its borrowers that can be paid in the future. The co-op has returned over $125 million in patronage refunds, dividends and stock retirements to its borrowers since 1997.
This year’s $62.4 million patronage payment and allocation was declared by the board of directors based on the co-op’s 2007 financial results. Capital Farm Credit experienced double-digit growth throughout 2007, ending the year with an 18 percent growth in loan volume over the previous year and a record $65 million in net income. With a loan volume exceeding $3.2 billion, it is one of the largest local lending cooperatives in the nationwide Farm Credit System..
