CASH-BACK
DIVIDENDS

As a financial cooperative, we offer a patronage program that returns earnings to eligible customer-owners through cash-back dividends.
Discover the benefits of working with a customer-owned lender.

Along with having a voice in what we do, our customer-owners receive cash-back dividends. The more eligible business you have with us, the more you can benefit from our patronage program.

Each year, our customer-elected Board of Directors determines the amount distributed. Earnings are either returned to customer-owners as cash-back dividends or retained on our balance sheet to support agriculture through economic cycles and to fund development of new products that help our customers succeed.

"It matters to me that Farm Credit is member owned. I think having a voice in what's being done is very important."

Phillip & Kristen

Grain & Livestock Producers, Kansas

Phillip & Kristen

Cash-Back Dividend Payments


In December 2019, the Board of Directors approved a cash-back dividend equal to 1% of a customer’s eligible daily loan balance for a total payout of $17 million that is being distributed in January 2020. Since 2004, we’ve returned more than $113 million in earnings to customer-owners.

Our ability to consistently pay a cash-back dividend reflects a remarkable financial strength. In fact, the Board has targeted a cash-back dividend of at least 100 basis points for the 2020 program, barring unforeseen events and significant changes in the environment.

Cash-Back Dividends in Basis Points

FFC Cash-Back Dividends in Basis Points
Year Millions
2016 53
2017 67
2018 90
2019 100
2020 Target 100

Cash-back dividends are based on eligible loan volume and Association financial results. Prior distributions should not be interpreted as guarantees of future performance.

CASH-BACK DIVIDENDS
2019 DISTRIBUTION MAP


Cash-back dividends offer a significant annual benefit and are based on each customer-owner's average loan volume during the calendar year.

Explore what has been paid in 2019 to our customer-owners in counties near you with this interactive map.

View Kansas distribution map

Select the Kansas map to see county-by-county cash-back dividends paid in 2019.

State cash-back dividend payment amounts are rounded to the nearest $100,000.

Frontier Farm Credit will return a portion of our 2020 net income earned from eligible customers through the 2020 patronage program. For 2020, the Board of Directors has targeted a cash-back dividend of 100 basis points, barring unforeseen events and significant change in economic conditions.
The 2020 patronage program provides for distribution of patronage-sourced earnings from a general pool, which applies to the majority of our customer-owners, and a separate pool that applies to eligible purchased participation loans purchased by Frontier Farm Credit. Distributions will continue to be calculated based on eligible average loan volume during 2020.

However, the Board of Directors has the discretion to distribute different amounts of cash-back dividends to each pool.
Cash-back dividends are a component of Frontier Farm Credit’s customer value proposition and are one of the unique benefits of doing business with a customer-owned financial cooperative. Cash-back dividends are a way to reduce the cost of borrowing from Frontier Farm Credit by sharing in the cooperative’s profits.
The amount of your 2020 patronage distribution will be based on your eligible average loan volume with Frontier Farm Credit during 2020. Generally, the more a customer borrows from us, the more he or she will benefit, financially, from the program. Because your eligible average loan volume and the amount of approved patronage can change each year, your cash-back dividend likely will change from one year to the next.
Yes. Eligible customers generally should include the cash-back dividend in their taxable income in the year that it was received. We encourage customers to consult with a tax advisor about their specific situation. Non-corporate customers will receive an IRS Form 1099-PATR early in 2021 for cash-back dividends paid in 2020. IRS regulations do not require distribution of 1099-PATR forms for corporations.
Retained earnings not distributed in cash-back dividends help Frontier Farm Credit build the necessary capital to fund future growth and to develop new products and services that help you, our customer-owner, succeed.
The cash-back dividend check payee will be the “payor of record” (primary customer) in our loan accounting system as of December 31, 2020. This is the same person whose taxpayer identification number appears on any IRS reporting associated with the customer’s account.
Frontier Farm Credit is dedicated to providing industry expertise, quality customer service and competitive rates. In order to attract investors for Farm Credit System funding, Frontier Farm Credit must demonstrate the ability to generate strong earnings. The program allows Frontier Farm Credit's Board to determine the amount of the cash-back dividend distribution after financial results for the year are known.
Our Board currently intends to distribute cash-back dividends each year. For 2020, the Board and our financial plan targets a cash-back dividend equal to 100 basis points, barring unforeseen events and significant change in economic conditions. The earnings retained by Frontier Farm Credit are used to build the cooperative’s financial capacity to continue serving agriculture.
WHO IS ELIGIBLE?
Generally, customers whose loans are capitalized by stock are eligible for cash-back dividends. These loans include operating and agriculture real estate loans, as well as some consumer-purpose loans secured with real estate (see excluded products).

If a customer paid off a loan during the program year, he/she is eligible for patronage for the period the loan was outstanding, provided no exclusions to eligibility apply.

WHO IS INELIGIBLE?
  • Non-accrual loans past due as of December 31.
  • Forbearance or restructured loan agreements that include patronage waivers.
  • Charge-offs (net), partial or full. All the customer’s loans are ineligible for seven years from the date of most recent charge-off, unless fully recovered, including any loans originated subsequent to the charge-offs.
  • Filed bankruptcy, voluntary or involuntary. The customer will be ineligible for a period of seven years from the date of discharge from bankruptcy or a similar proceeding and concluding on December 31st of that seventh year.
  • Sales contracts (Contracts for Deed) resulting from a loan restructure.
  • Accelerated loans as of December 31. One accelerated loan makes all the customer’s loans ineligible.
  • A loan made expressly on a non-patronage basis.
  • Cash-back dividends of less than $50.
PRODUCTS INELIGIBLE FOR CASH-BACK DIVIDENDS
  • Insurance products, as required by regulations prohibiting the distribution of insurance income directly to customers who generate it.
  • Leases, as required by the lease agreement with our lease processor, Farm Credit Leasing.
  • AgDirect equipment financing made after April 11, 2010.
  • Young and Beginning Development Fund loans.
  • Consumer-purpose loans secured by real estate except those previously issued with patronage pricing before April 15, 2018 and:
    • Closed on or after January 1, 2018.
    • With a completed loan servicing action on or after January 1, 2018, for the following(*):
      • All interest rate conversions
      • Maturity/Extension of Terms greater than 3 months
      • Payment Extensions or Deferments or
      • An additional advance closed on or after April 15, 2018.
        (*Partial-year eligibility is based on servicing action date.)
    • A loan participation or a multi-lender syndicated loan, unless the contract with the borrower specifically provides for the payment of patronage.

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

Frontier Farm Credit serves farmers, ranchers, agribusinesses and rural residents in eastern Kansas. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.