Farm Credit Services of America Board Authorizes $110 Million Cash-Back Dividend Payment for 2010
Dec 16, 2010
- Largest Distribution in Farm Credit Services of America History -
Omaha, Nebraska (December 16, 2010) – The Farm Credit Services of America (FCSAmerica) Board of Directors has approved a 2010 cash dividend of $110 million to eligible loan customers – an amount more than double the prior year’s distribution.
The $110 million cash-back dividend is the largest in FCSAmerica’s history. The 2010 payment will bring FCSAmerica’s total cash distributions since 2004 to more than $425 million.
“The Board is pleased to provide our eligible customer-owners with a significant cash dividend for a seventh consecutive year,” said Dan Shaw, Board Chairman. “This has been a great year financially for the cooperative. With our strong overall business results, we are able to return a cash-back dividend while building capital for future generations.”
President and CEO Doug Stark attributed the strong results to multiple factors and the cooperative’s underlying financial strength. “We planned for a good year and due to several factors including new business growth and a decrease in credit losses, we are able to return a significant cash dividend to eligible loan customers while offering competitive interest rates,” he said.
Rate Conversion Initiative Cited
Stark pointed to FCSAmerica’s rate conversion initiative as an example of an effort that both strengthened the cooperative’s position and benefited customers.
Declining market interest rates in 2010 produced an opportunity for the cooperative to offer customers reduced interest rates. More than 15,700 customers had loans converted to lower rates this year – an average reduction of just over one percent – while reducing their total interest payments by approximately $42.8 million in the first year the new rates are in effect.
“Since the interest savings continue each year for the life of the converted loans, which may vary from three to 30 years, the long-term impact will be significantly greater than the first-year calculations,” Stark said. “Our ability to offer programs like these, along with cash-back dividends, really distinguishes our cooperative as a valued financial partner when compared to other lenders.”
Cash-Back Dividend Details
The Board of Directors has adopted a patronage program every year since 2004. Each customer’s cash-back dividend from the program is based on the amount of net interest income and related fees earned on each of their eligible loans during 2010. The more loan business an eligible customer has with the cooperative, the more they benefit financially from the patronage program. Eligible customers can expect payments to be distributed in March 2011.
The FCSAmerica Board also approved a patronage program for 2011 at their meeting this week. The Board will determine the cash-back dividend for the 2011 program in December 2011.
About Farm Credit Services of America:
Farm Credit Services of America is proud to finance the growth of rural America, including the special needs of young and beginning producers. With more than 85,000 customers and assets of $15.3 billion, FCSAmerica is one of the region’s leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For more information, visit www.fcsamerica.com.