By TIM THORNBERRY
Kentucky Correspondent

LEXINGTON, Ky. — It isn’t often those borrowing from a lender receive extra money, but Bluegrass Region customers of Central Kentucky Ag Credit (CKAC) are getting just that.

The agricultural lending co-op, which primarily provides loans and related financial services to the agricultural industry as well as mortgage financing for rural homeowners, recently announced a total of $870,349 is being distributed to its borrowers. That represents a 58 percent increase over last year’s rebates.

The money comes from profits made by the lender, and this year marks the 14th year in a row CKAC has been able to make such a distribution of funds.
“Ag Credit is a financial lending institution and operates as a cooperative,” said Jim Caldwell, president and CEO of the company. “As a lending cooperative, we are the financing component of many farm operations. When Ag Credit achieves sufficient earnings, we can distribute a portion of those profits to our patrons – the farmers who borrow from the co-op.”

Since 1997, the company has returned more than $10 million to its member-borrowers and this year’s amount is one of the larger annual totals divvied up, according to Marcus Barnett, CKAC chief financial officer.

“It was much larger than the last year or two, and it’s one of our largest,” he said. “Anyone who borrows money from us, they also purchase stock in the co-op at that time and it’s a rebate back to them from our profits. It is similar to a dividend. Of course co-ops are set up differently, but it is a similar concept. Hopefully this is a good retention feature.”

Those receiving funds are full- and part-time farmers in a 17-county area in central Kentucky that includes Boyle, Mercer, Madison, Bourbon, Franklin, Harrison, Montgomery, Scott, Marion, Washington, Garrard, Lincoln, Clark, Fayette, Franklin, Jessamine and Woodford counties.

These farmers range from tobacco producers to those in the equine industry, and Barnett said he has seen change in loan needs as agriculture has diversified over the last few years. James L. May, a farmer and chair of the Ag Credit board of directors, said this refund comes at a time when farmers really need it.

“The economy has not been kind to anyone during the nation’s ongoing financial crisis, and distribution of money back to Ag Credit member-borrowers is both timely and helpful,” he said.

The amount of the refund is indicative of not only how strong the 76-year-old co-op is but shows the strength of its borrowers, noted Barnett. “Even through this downturn in the economy in some places, we’ve been able to weather that storm pretty well in central Kentucky and in our association, as well,” he said.
“Hopefully it is indicative of our credit staff and their ability to analyze loans and also to service loans to make sure they are on top of them.”

Barnett also said from an agricultural standpoint, this area has probably fared better than many regions in the southeastern United States.

There are approximately 1,700 stockholders in CKAC who will be receiving checks from a total of six branches around the area. For more on the co-op, go to www.agcreditonline.com