FOSTORIA, Ohio — Ag Credit, an Ohio rural lending cooperative, will distribute a near record $14.2 million in profit-sharing to stockholding borrowers this month in the form of checks ($9.2 million) and allocated equities ($5.0 million).
The refunds amount to 25.36 cents on every dollar of loan interest accrued last year. With the cooperative’s average rate of 4.70 percent, that would reduce a borrower’s interest for 2012 to 3.51 percent.
Ag Credit, part of the national Farm Credit System, is a financial co-op that provides loans to farmers, agricultural businesses and rural homeowners.
As a cooperative, Ag Credit’s borrowers are its stockholders. The board of directors determines annually the portion of the cooperative’s profits to be distributed to eligible stockholders in the form of patronage checks issued twice a year.
In other words, when the cooperative earns a profit, it puts a portion back into the pockets of its stockholders.
“Ag Credit’s profits come from a number of earnings engines,” Ag Credit President Neil Jordan said, including interest on loans and leases, investments, life and crop insurance, rural home loans, services, and equity earnings.
Dividends are being paid in a combination of cash and allocated equities to more than 5,100 farmers and other borrowers in northwest and north central Ohio.
In the past 26 years, customer-owners of Ag Credit have earned more than $166 million in dividends from their ownership of the cooperative.