Patronage Program

Sharing profits with our members

As a cooperative, AgSouth is owned by our members. One of the most important financial benefits is sharing in the profits of the Association through our Patronage program. Patronage reduces the cost of borrowing by returning a portion of our net income to our borrowers based on the proportion of interest paid on their loan and total interest earned by the Association.

Patronage Calculator


Your first year’s 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

*Important Notice: The patronage factor of 20 percent (percent of interest distributed) used in this statement is a projection based on the current estimate of earned interest for 2023 and may be higher or lower than actual amounts. Actual patronage for the year 2024 and all future years will be based on the performance and profitability of AgSouth Farm Credit in those years. Actual patronage factors may be higher or lower or there may be no patronage in some years. No representations are being made to you regarding future interest rates, the amount of any future patronage distributions, or whether there will be any future patronage distributions.

Patronage FAQ

Do you have questions about patronage distributions? Get answers to the most commonly asked questions here:

What is a patronage distribution?

A patronage distribution is one of the great benefits of doing business with a cooperative. As customers and stockholders, members share in the Association’s profits. A customer’s distribution is based on the proportion of interest earned on his or her loan to the total interest earned by the Association. A patronage distribution may be paid in cash, stock or any combination of these methods.


How do patronage distributions benefit AgSouth Farm Credit customers?

Patronage distributions benefit customers by reducing their costs of borrowing. The more business a member does with AgSouth Farm Credit, the larger the member's potential patronage distribution.

Unlike corporations, where profits are taxed twice — once when earned by the corporation, and again when distributed to owners as dividends — a cooperative’s profits are taxed only once, when they are distributed as patronage.

The patronage distribution program is one of the great benefits of doing business with AgSouth Farm Credit. The next time you sit down to write a check to another lending institution, ask yourself, “How much of this interest payment will this bank be returning to me?” If your answer is, “None,” then you should consider doing more of your business where you are a stockholder, like you are with AgSouth Farm Credit. Remember, when you own the bank, you share in the profits.

How do patronage distributions benefit AgSouth Farm Credit as an Association?

Patronage distributions help AgSouth Farm Credit manage its tax expense and maintain a strong capital position. A strong capital position helps all customers because it enables the Association to offer competitive interest rates while ensuring a constant supply of available credit.

How is my patronage distribution issued?

Your patronage distribution may be issued to you by check, direct deposit, or recorded on the Association’s books in a special account called patronage payable. The board sets a minimum check amount as a way of controlling expenses. Cash distributions below the minimum are set up in the patronage payable account.

Members may request the monies in their patronage payable account in the form of a check, have the funds applied to their loans or leave these amounts on account with the Association.


Read: What is Patronage?

Patronage: A Cooperative Benefit

What is patronage and how is it determined at AgSouth?

In this article you'll find:

  • Cooperative definition
  • What is patronage and why it's beneficial 
  • ​How we determine patronage
  • How we calculate patronage

Read Article