Patronage Refunds and Co-op Information
What is cash patronage?
One of the key financial benefits of being a Legacy Ag Credit member-owner is the opportunity to share in our profits. When the Association meets its annual financial goals, the Board can declare a percentage of our earnings to be paid to our borrowers in the form of patronage dividends. These dividends effectively lower the cost of borrowing and allow our members to directly benefit from our success.
At the end of each year, our member-elected board of directors decides how much of the earnings should be retained as capital to keep the co-op strong and how much should be returned to members as cash patronage. Patronage dividends for the previous year are paid out during the first quarter. The amount of patronage depends on each member’s eligible average daily loan balance—the more business you do with us, the greater your potential patronage payout.
For many of our customers, one of the highlights of the year is receiving their generous patronage check. Many use the money to pay down their loans, reinvest in their businesses, cover household bills, or reward themselves with a vacation.
What is an agriculture cooperative?
Legacy Ag Credit is an agricultural cooperative or “co-op” of the Farm Credit System, meaning customers own the Association, not outside investors. From farmers to producers, we believe that everyone accomplishes more as a collective than as individuals.
This model allows farmers, ranchers, agribusinesses and rural homeowners who use our products and services to be the decision-makers.
What you gain by being a member:
- Patronage
- Reliable credit and financial services
- An equal voice in the business
We make sure our customers have a say in the decision-making process. Six of the seven directors serving on the Legacy Ag Credit Board of Directors are elected by our customer-owners. The seventh one is appointed by the Board.
How does a co-op work?
Each year, the directors make a thorough assessment of projected asset levels, earnings, economic conditions, possible loan losses, and other contingencies. Then, they approve a capital plan for the Association.
Once Legacy Ag Credit hits its capital goal, the Board reinvests part of earning in the co-op, to maintain a strong capital position for investment in future opportunities. The other portion of the net income is returned to customers through the Legacy Ag Credit Patronage Program.
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As a cooperative, we are a stable organization that can withstand challenging economic cycles while continuing to discover unique opportunities for our customers.
Patronage is a privilege reserved only for members of customer-owned financial institutions.
If you want to finance your agricultural plans while enjoying extra profits, consider becoming a Legacy Ag Credit member.
For more details on our Patronage program, contact one of our branches.