The Association is a cooperative and one of the most important financial benefits of doing business with a cooperative is that, as a customer, you are also a member/owner. This entitles you to share in the Association’s profits through patronage dividends declared by the Association’s Board of Directors. Also, as a cooperative, the Association does not operate for the benefit of outside stockholders and does not pay dividends to investors, thus ensuring that any undistributed profits remain invested in serving our mission.
Under Section 735 of the Association’s Bylaws, the Board is authorized to pass resolutions legally obligating the Association to distribute its patronage earnings in the form of patronage dividends.Your Board of Directors has adopted a patronage program which provides a dividend for a portion of the Association’s net earnings to customers on a patronage basis, effectively reducing the cost of doing business with the Association. Along with our competitive rates, terms, service and agricultural expertise, our patronage program provides an exclusive financial benefit for our customers. The more business you do with us, the more patronage will benefit you.
Under the program, the Association will make an annual distribution of patronage from prior year’s consolidated net earnings as computed under generally accepted accounting principles. The amount distributed to eligible customers (“patrons”) will be the amount of net earnings above what the Board of Directors determines is an appropriate addition to the Association’s permanent capital base. Accordingly, the amount distributed from year to year will fluctuate depending on level of earnings and the Association’s need to build capital for, among other things, capitalizing future growth, cushioning against a downturn in credit quality and meeting the requirements of our federal regulator. On an annual basis, the Board of Directors will review the Patronage Program and may make modifications to the program consistent with the Association’s ByLaws and cooperative principles.