American AgCredit, the nation’s seventh largest Farm Credit cooperative, has announced the distribution of $15.8 million of net income to its members. This brings the total to $80 million that American AgCredit has returned to its customers in the past five years. In the Southern California region alone, American AgCredit disbursed over $3 million to local farmers, ranchers and agribusiness customers.
Including American AgCredit’s latest merger with Farm Credit of the Heartland, the combined total distributed to customers in the same period soars past $100 million.
Dividends allow the Association to return a portion of its net income to its member shareholders, who are its borrowing customers. Individual dividend amounts are based upon the average daily balance of the borrower’s loan(s) as a percentage of the total loan balances held in the
According to Ron Carli, American AgCredit’s president and CEO, the association’s substantial capital base and strong credit quality, as well as its market diversity, contributed to the year’s success.
“We are very proud to have had another successful year, and it’s a direct reflection of our strength and stability,” he said. “Our approach to lending is conservative and focused. This has allowed us to continue to offer competitive rates on our mortgage loans and operating lines of credit, and to distribute cash dividends back to the very people who make our success possible – our members. ”
Chris Call, American AgCredit’s CFO added, “Despite a volatile financial market, we had strong earnings this past year. While 140 commercial banks failed during 2009, American AgCredit continued to thrive and pay dividends to its members. This program is another benefit to doing business with American AgCredit, and it’s a clear barometer of our success.”
With the 2009 merger of Farm Credit of the Heartland, American AgCredit is poised for additional success through 2010. The recent merger ensures that the Association remains well diversified in a marketplace that is constantly changing, and strengthens the organization’s core structure.
The 2009 results for the Association showed continued growth and strong earnings. Although the continued decline in interest rates did affect interest earnings on the portfolio of loans, overall net income for the year was more than $49 million. Loan volume remained stable for the year, with assets of $4.9 billion and an additional $4.3 billion in serviced assets. The Association maintains a portfolio of assets that will continue to produce solid interest income and fee income over the long‐term.
Carli points to American AgCredit’s track record of managed, conservative growth and solid earnings history as the reasons for the Dividend Program, and says the advantages to the program are numerous.
“Dividends are just one factor that make locally‐run agricultural cooperatives more attractive to farmers and ranchers than multinational banks. The dividend program effectively reduces the interest rate on our members’ loans by one‐half of one percent in most cases,” he said.
—From American AgCredit press release