We put our profits in your pockets.

Our unique cooperative structure allows us to return some of our profits to our borrowers. Each year, the Board of Directors reviews our financial position and determines if the Association’s capital position allows for a distribution to our members. When that occurs, our members receive a check, based on the amount of interest you’ve paid in the previous year. Interested in determining your amount?

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The Farm Credit advantage:
We share our profits.

When you do business with Farm Credit, you become a member. As a cooperative, we return our profits to those who borrow from us.

*Patronage distributions are at the discretion of the Board of Directors.

Patronage Calculator


Here is your estimated Patronage Distribution: ESTIMATED PATRONAGE

After receipt of your distribution, patronage effectively lowers your total interest cost for the first year of your loan from $XXXXX to: EFFECTIVE INTEREST EXPENSE

This effectively lowers your interest rate from XXXX to: EFFECTIVE INTEREST RATE

*Results based on 10-year average refund totals. Past performance not a guarantee of future payouts. Calculations do not account for time value of money or distinguish between returns made in cash and in allocated surplus. Talk to a loan officer for details.

Patronage FAQs

Does patronage affect my borrowing costs?

Absolutely—in a very positive way. The Association, like other lenders, offers competitive rates and terms, which typically results in a profit. When our board of directors elects to return a part of those profits, the distribution is based on the amount of interest members have paid on their loans. As a result, patronage effectively lowers each member’s borrowing costs.

What is a patronage distribution?

A patronage distribution is a way of distributing the association’s profits to its members. The amount of patronage distributed to a member is based on the amount of business the member conducts with the Association (in other words, how much you borrow).

How does patronage benefit the Association?

The Association may deduct qualified patronage, including cash and the retirement of nonqualified surplus, from taxable income when computing its taxes. The result is a tax effective way of providing value to members.

How is the amount of patronage determined?

The obligation to pay patronage is established by the Association’s bylaws and board resolutions. Pursuant to these governing documents, our Association’s board of directors determines the overall amount of patronage and form of patronage. These determinations are based on the Association’s profits and capital needs. As a regulated financial institution, the Association must build and maintain adequate capital to ensure we have the financial strength to continue serving our market. Distributions are made only if capital requirements are achieved.

Note that, in certain circumstances, your loan may not be eligible for a patronage distribution. For example, if your loan is placed in nonaccrual status, you may not be eligible for patronage with respect to that loan.

What forms of patronage dividends may be declared?

Patronage may be paid in cash and/or any of the following forms of retained earnings, each of which is evidenced in a written notice form (usually in the patronage distribution notice).

The Cash portion of your patronage distribution may be issued to you by check or recorded on the Association’s books in a special account. When any portion of a patronage distribution is paid in cash, your board of directors may elect to set a minimum check amount as a means of controlling expenses. Cash distributions below the minimum check amount are recorded in a special account called Patronage Payable.

What is Non-qualified Retained Surplus?

Nonqualified Retained Surplus is an amount retained by the Association in the member’s name. However, unlike Qualified and Nonqualified Allocated Surplus, the board of directors considers Nonqualified Retained Surplus as earnings permanently invested in the Association. As such, there is no plan to retire or redeem Nonqualified Retained Surplus, except upon liquidation of the Association. The Association does not deduct Nonqualified Retained Surplus from its income for tax purposes. Consequently, the member does not have to recognize an allocation of Nonqualified Retained Surplus as taxable income.

*Normal credit and underwriting requirements apply. New customers incur cost of one time stock purchase. Patronage distributions are at the discretion of the Board of Directors.

Patronage History

Southwest Georgia Farm Credit has a strong history of returning profits.