Alabama Ag Credit, a rural lending cooperative serving southern Alabama, recently declared a record $5.6 million cash patronage to its customers. This amount was based on the co-op’s strong 2012 financial results and was approved by the Alabama Ag Credit Board of Directors.
Net income for Alabama Ag Credit grew 15 percent to a record level of $15.1 million. Outstanding loan volume climbed to $695 million. These strong financial results allowed the Board of Directors to distribute the all-cash patronage payout to our borrowers.
This patronage distribution is based on the amount of business a borrower does with the co-op and lowers the borrowers’ net cost of borrowing by 0.85 percent. With this year’s payment, Alabama Ag Credit has returned approximately $49.1 million in cash to our borrowers since 1996. As a cooperative, Alabama Ag Credit is owned by its borrowers/stockholders. When the co-op performs well, it shares its earnings with the stockholders.
"This is a significant financial return to our borrowers," said W. Thomas Dozier III, chairman of the co-op’s member-elected board of directors. "This patronage program is evidence that the cooperative system works and demonstrates our commitment to meeting the mission of enhancing the quality of life for the people of rural Alabama."
A part of the nationwide Farm Credit System, Alabama Ag Credit provides financing for farms, timber and forestry operations, agribusinesses, recreational land and rural homes in 40 counties in southern Alabama. The financing co-op has offices in Demopolis, Dothan, Enterprise, Loxley, Montgomery, Opelika, Selma and Tuscaloosa.