The Experts in Rural Finance

"We put our profits in YOUR pockets!"

As a Farm Credit borrower, you become a member of a cooperative—a business that is owned and controlled by the people using their services. As a cooperative, we can return the profits of our successful operations to our members—the owners—in the form of a patronage refund. This year we are returning more than $6.7 million to our customers!

These dividends are based on the amount of business that you do with the cooperative and can significantly reduce your cost of borrowing money. At the end of each fiscal year, Farm Credit determines its income and expenses. Income remaining after all expenses are deducted (net income) can then be distributed to members in accordance with the bylaws of the company. Your board can elect to; retain all of the net income to strengthen our capital position, or distribute some or all of our net income by declaring a patronage refund.

Do I get a patronage refund on all of my loans?

You are eligible for a patronage refund on all loans that are made and held by Farm Credit. This includes land purchases, farm real estate, livestock and equipment loans, operating loans and almost every other type of loan. The only loans that are NOT eligible are home mortgages made by the Country Mortgages division that are sold in the secondary market.

How much could I get?

A percentage (set annually by the board of directors) of the company's net income is paid to you based on the proportion of interest earned on your loan to the total interest earned by the company.

Is this a good thing?

It is a very good thing for our customers, the community, and Farm Credit. A patronage refund reduces your cost of borrowing money and is a tangible reward for doing business with a lending cooperative. Your community will benefit as you use the money we return to you in trading with local businesses. It also helps the company maintain a strong capital position.

When could I get this refund?

As the board of directors approves a resolution to pay a patronage refund, a check is paid in the spring for the previous year's earnings.

Do I pay taxes on this money?

Generally, a patronage dividend is taxable. Each individual's situation is different and we recommend you consult your tax advisor for guidance.

Does Farm Credit raise its rates to pay this refund?

NO. Because we operate very efficiently and without the overhead of other banks and lenders, we are able to offer very competitive rates AND a patronage refund.

Why don't other banks do this?

Farm Credit is unique in that it is a cooperative owned by its customers. Banks return their profits to investors, who own the bank, but who may not even use the services of the bank.


Our Patronage Refund History













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Colonial Farm Credit, ACA

7104 Mechanicsville Turnpike

Mechanicsville, VA 23111


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