Co-op farm lender pays out $55 million
Ag lender Northwest Farm Credit Services is paying out nearly $55 million in patronage dividends to members of its cooperative.
The patronage dividend for 2012 is up roughly 2 percent from the previous year and has more than tripled since the program began in 2000.
Patronage is based on the cooperative's profitability and is indicative of its financial health, said Tom Nakano, chief financial officer at NWFCS.
Due to poor credit quality and economic malaise in agriculture, companies within the Farm Credit System of government-sponsored lenders struggled in the 1980s and 1990s, Nakano said.
By 2000, however, the cooperative had replenished its capital enough to begin sharing profits with its customer-shareholders, he said. "We had to build up a pretty strong financial position to feel like we could do that year in and year out."
Since then, the Spokane, Wash.-based lender has paid out $377 million in patronage dividends -- effectively reducing the interest rates paid by clients in Washington, Orego, Idaho, Montana and Alaska, Nakano said.
In 2011 and 2012, the cooperative has paid stockholders 0.75 percent of their annual loan balance in patronage, which is the highest ratio in the program's history, he said. In the past, the ratio has hovered between 0.50 percent and 0.70 percent.
-- Mateusz Perkowski