It’s nice to walk out to your mailbox and get a good surprise for a change. “The first time a check showed up in the mail, I just thought, ‘What the devil is this?’ It was a complete surprise,’” remembers Texas cattle rancher Cary Otto.

That was 12 years ago, when Otto received his first patronage check from Capital Farm Credit. “That paid for a good Christmas,” Otto added.

Capital Farm Credit, a Texas-based cooperative with nearly 70 locations across the state, has a different relationship with its customers compared to most traditional lenders. In Capital Farm Credit’s case, the customers are the owners, which means they receive a share of the profits through the Capital Farm Credit Patronage Dividend Program.

“We’re very passionate about the program,” said Capital Farm Credit Vice President and Relationship Manager Jeri Langehennig, who has been with the Mason branch since 2006. “We want our customers to feel confident when they do business with us and know that we’re committed to paying back the earnings they helped generate.”

Langehennig and Otto have been working together since the former moved back to her hometown of Mason in 2006, but the story of their partnership is generations in the making.

“Cary’s father, August, began his relationship with Capital Farm Credit in 1970,” Langehennig said. “Then Cary and I picked things back up in 2006 when he had a new transaction.”

It was Langehennig’s father who helped Otto’s father with his very first loan when he started ranching, before becoming director with the Federal Land Bank for the next 25 years.

“I’m the third generation to work in Farm Credit,” Langehennig said. “I remember Cary’s dad from growing up when he was on the board at the Federal Land Bank of Mason and my father was the manager — it’s come full circle.”

Those deep-rooted relationships are key to understanding what each customer needs, helping to deliver solutions that are viable for their growth and tailored to their operation.

“We very much try to differentiate ourselves on our local expertise,” Langehennig added. “Not only in the marketplace, but with the connections that we’re able to make. Those connections help our existing customers and those who may be new to the area.”

For customers like Otto, the Patronage Dividend Program is something they can factor into their forecasting and operational costs during the season, adding a little certainty to a line of work where it’s welcome.

“I have one payday a year, and that’s in July,” Otto said. “These payments come in November and March, so it really does help me plan and budget for the year.”

The two checks Otto mentions refer to both the cash payment and the allocated equities he receives.

“We’re operating a sound financial institution so that we can pay both a substantial cash patronage and the equities assigned to long-term customers over the years,” Langehennig said. “We’re basically one of very few Farm Credit associations across the nation who pay back nearly 100% of our earnings to our members.”

Some of those earnings are retained to help grow the cooperative. As a healthy cooperative grows, it generates new capital and is able to retire older capital from previous years. So, when a borrower pays off his or her loan and retires his or her stock, those earnings rightfully belong to that member and will be paid out to them in the future through allocated equities.

“It really is something that benefits our members for a much longer timeframe, past having an active loan with us,” Langehennig said.

And we’re not talking a small sum here. Since 2004, Capital Farm

Credit has paid out more than $1 billion to their customers. That’s money that goes right back into their operations and to local economies.

“The Patronage Dividend Program is why Capital Farm Credit can give us the best rates,” Otto said. “I look at it as a refund on the interest I’ve already paid in, which makes the cost of business a whole lot cheaper for me.”

As for what’s next for Otto? Well, expanding the operation is high on his list. “I’m looking to expand the operation soon, once I find the right land,” Otto said. “Then we can keep expanding on that 49 years of history,” Langehennig added.

Cary Otto, Texas cattle rancher

“I have one payday a year, and that’s in July. These payments come in November and March, so it really does help me plan and budget for the year.”

Jeri Langehennig, Vice President & Relationship Manager

“It really is something that benefits our members for a much longer timeframe, past having an active loan with us.”

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