Financing

Patronage Program

Patronage Distribution

A portion of the profits that Idaho AgCredit earns is returned to you as a borrower and stockholder, through a patronage dividend. At the end of each fiscal year, our Board of Directors assess the total income of the cooperative. They forecast our future financial needs and determine how much of our earnings should be retained to provide strength in order to serve our customers through agriculture’s ups and downs. The rest is returned to our customer-owners.

The patronage distribution is based upon the average daily outstanding principal of your loan(s) multiplied by the dividend percentage approved by the board of directors. For example, with a patronage distribution of 1% and an average outstanding loan balance of $500,000, you would receive a cash distribution of $5,000.

Idaho AgCredit has averaged a 1% patronage dividend for the past 5 years.

Patronage FAQ’s

A patronage dividend is a way of allocating Idaho AgCredit’s net income to its member-stockholders. Patronage is based on the proportion of:
– The total average balances of all patronage-eligible loans at Idaho AgCredit
Each year’s Idaho AgCredit patronage distribution is comprised of two components: (1) a cash payment to the customer (a “qualified” distribution) and (2) a non-cash (“non-qualified”) portion that is retained and becomes a part of the Association’s retained earnings account. A qualified/cash patronage dividend is a way to reward you for contributing to the Association’s financial success.
Since Idaho AgCredit allocates patronage based on the average annual balance of the customer’s loans/leases, the more business you do with Idaho AgCredit, the larger your potential patronage dividend.

Qualified/cash distributions vary, depending upon earnings and the overall financial goals of the organization. The qualified/cash payment made in 2021 earnings was 1.25% of your average 2020 borrowing. Idaho AgCredit has paid on average over 1% from 2017 to 2021.

If the Board of Directors approves payment of a qualified/cash patronage dividend from a particular year’s earnings, 100% of the qualified/cash portion of your patronage dividend is paid to you, typically in February of the following year.

Yes. In January of the year following your receipt of a cash patronage distribution, Idaho AgCredit will send you IRS Form 1099, showing the total of all qualified/cash patronage distributions issued to you during the previous year. The non-qualified portion of the patronage allocation will not be reported as taxable income.

No. Because Idaho AgCredit operates very efficiently as a member-owned cooperative, we are able to offer very competitive interest rates and a patronage dividend.

Federal regulations require Farm Credit Associations to charge interest rates that are sufficient to cover all costs, fund provisions to the allowance accounts [potential loan losses] and accumulate capital. The amount of these costs and needs can vary from year to year based on a number of factors. Idaho AgCredit’s pricing philosophy is to charge a market rate, and to pay patronage to reduce our members’ cost of borrowing. In addition, there are financial benefits to the Member, and to the Association when patronage is paid.