ROBSTOWN, Texas — This spring Texas Farm Credit is sending more than 3,352 checks totaling a record $8.l million in patronage dividends to its customers.
The checks add up to nearly 40 percent of the lending cooperative’s earnings from 2016. This is the 19th consecutive year that the lender has distributed earnings to its customers, who are also co-op members and owners.
“Patronage is a unique benefit of doing business with a cooperative that allows customers to share in the company’s success very fairly and equitably,” said Mark Miller, Texas Farm Credit chief executive officer. “We keep only the earnings we need to support future growth and operations, and give the rest back to our members.”
Patronage dividends lower borrowing costs by refunding a portion of the interest that customers paid on their loans. On average, a Texas Farm Credit borrower who had an interest rate of 5 percent in 2016 effectively paid just 4.2 percent as a result of the current patronage refund. Another $6.1 million in earnings from 2016 has been allocated for future distribution, which will lower borrowing costs even further.
The distribution is possible because of the strong earnings and 10.7 percent loan growth in 2016 at Texas Farm Credit, which was formed by the merger of AgriLand Farm Credit and Texas AgFinance in 2014.
With a very diverse territory and loan portfolio, the lender finished the year with $1.15 billion in loans, $1.2 billion in assets and $20.4 million net income, all records. Credit quality remained strong, with 98.6 percent of loans classified as acceptable or special mention at year-end.
Texas Farm Credit also offers a variety of financial services, and in 2016 expanded its insurance staff and service territory when it purchased Donaho Insurance Agency in Raymondville. Currently the lender insures 174,000 acres of row crops and 2.9 million acres of pasture.
Part of the nationwide Farm Credit System, Texas Farm Credit finances agricultural operations, agribusinesses, rural homes, and the purchase and improvement of rural real estate such as farms, ranches and recreational property. Headquartered in Robstown, it serves 100 Texas counties and has lending offices in Athens, Bandera, Beaumont, Bonham, Brenham, Clarksville, Fairfield, Gainesville, Hebbronville, Nacogdoches, Paris, Pleasanton, Raymondville, Robstown, San Antonio, Sulphur Springs, The Woodlands, Tyler, Uvalde and Weslaco.
—Texas Farm Credit
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