Frontier Farm Credit will return a portion of our 2021 net income earned from eligible customers through the 2021 patronage program. For 2021, the Board of Directors has targeted a cash-back dividend of 100 basis points, barring unforeseen events and significant change in economic conditions.

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 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 participation loans purchased by Frontier Farm Credit.

In each pool, the amount of a customer's 2021 patronage distribution will be based on his or her eligible average loan volume with Frontier Farm Credit during 2021. 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 2022 for cash-back dividends paid in 2021. IRS regulations do not require distribution of 1099-PATR forms for corporations.