The financial cooperative has returned $80.7 million to customer-owners since 2004
OMAHA, NEBRASKA - Frontier Farm Credit today announced enhancements to its patronage program to share more of the cooperative's earnings with eligible customer-owners.
At its August meeting, the Frontier Farm Credit Board of Directors approved targeting a cash-back dividend equal to 0.90 percent of a customer's eligible average daily loan balance, the highest payout since the patronage program's inception in 2004. The enhancement will be effective for the 2018 fiscal year, and eligible customers should see the higher cash dividend payout in their March 2019 patronage distributions.
Jennifer Gehrt, Frontier Farm Credit board chair, said, "We assess the cooperative's financial strength each year to ensure adequate capital levels. Once those are met, the board typically approves payment of a portion of net income back to our stockholders. Barring an unforeseen event or significant change in the environment, the outlook for our cooperative positions us to provide more certainty around our patronage intentions going forward. We think it is important that our customer-owners know they can count on their cooperative in these challenging times for agriculture."
Frontier Farm Credit has returned $80.7 million since 2004 to its customer-owners in eastern Kansas. "It's one of the most tangible benefits of our cooperative business model," Gehrt said. "Those dividends flow to rural communities all across our service area."
Craig Kinnison, chief financial officer at Frontier Farm Credit, said, "We've spent years building the association's financial strength and operating efficiencies. Our capital base has never been stronger, and the ability to stress test our loan portfolio under a variety of scenarios gives us confidence to target a higher level of patronage for our current planning cycle."
The Frontier Farm Credit board annually approves a capital plan for the association based on projected asset levels, earnings, economic conditions, possible loan losses and other contingencies. The board's patronage payout assumes the association meets its financial goals and other factors do not adversely impact the cooperative.
About Frontier Farm Credit
Frontier Farm Credit is proud to finance the growth of rural America, including the special needs of young and beginning producers. With $2.0 billion in assets and $440.7 million in members' equity, Frontier Farm Credit is one of the region's leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at www.frontierfarmcredit.com.