Farm Credit East Distributes $70.3 Million to Members in 2012
ENFIELD, CONN. – For the second time in 2012, Farm Credit East has made a major payment to farmers and other customer-members with the redemption of $34.8 million of allocated stockholder equity. This distribution is in addition to $35.5 million paid as a cash patronage payment in February based on 2011 financial results, totaling $70.3 million returned to customer-owners this year. The payment resulted from the successful merger to form Farm Credit East in January 2010.
The Farm Credit East Board reviewed capital levels and approved this redemption at their March meeting. Bill Lipinski, CEO of the financial cooperative, explains, “This $34.8 million represents the planned 2012 redemption of Allocated Retained Surplus from the 2010 Farm Credit East merger agreement, plus the accelerated redemption of Allocated Retained Surplus originally planned for 2013 and 2014.” With this redemption, Farm Credit East will no longer employ Allocated Retained Surplus as part of its capital base.
Farm Credit East customers from across the Northeast will use the two payments at a time of year when agricultural businesses experience heavy cash flow demands. Most customers will reinvest their checks in their businesses as working capital. Others will buy new equipment and some will pay down existing loans.
“In 2009, the Board and Management committed to redeeming this allocated equity in cash back to our customer-owners over a five-year cycle,” said Lipinski. “Based on that commitment our customer-owners overwhelmingly voted for the Farm Credit East Merger. By completing this redemption in only three years, the Board says “thanks” for your continuing trust and confidence in your cooperative.”
Lipinski added, “The Board is committed to being good stewards of our customers’ money and is committed to operating a financially strong, successful cooperative serving Northeast agriculture. The final redemption of the Allocated Retained Surplus exemplifies the result of their efforts.”
Farm Credit East extends more than $4.35 billion in loans from 19 local offices in its six-state service area. In addition to loans and leases, the organization also offers a full range of agriculturally specific financial services for businesses related to farming, horticulture, forestry and commercial fishing. A 15-person Board of Directors leads Farm Credit East. For more information, go to FarmCreditEast.com
Robert A. Smith