Question 1

Alabama Farm Credit's borrowers own its stock. Why?

Accepted Answer

Farmers, ranchers and producers who obtain a loan are required to purchase voting stock. Our borrowers are considered members of Alabama Farm Credit, and have the privilege of being a voice within the cooperation. Your right to vote, in accordance with the Farm Credit Act and Alabama Farm Credit bylaws, allows you to elect the members of your Board. These members work closely with Alabama Farm Credit to ensure that your needs are addressed.

Question 2

What is voting stock and who can buy it?

Accepted Answer

Farmers, ranchers, producers or harvesters of aquatic products who obtain a loan are required to purchase voting stock. The stock includes the right to vote on all matters on which stockholders have the right to decide, in accordance with the Farm Credit Act, regulations by the Farm Credit Administration and rules in Alabama Farm Credit's bylaws.

Question 3

What does stock ownership give me?

Accepted Answer

A holder of voting stock is entitled to: nominate and vote to elect directors of the association's board of directors; vote in the selection of members of the nominating committee; make motions and second motions at the annual stockholders' meeting; vote on measures brought before the meeting; vote on certain other matters relating to corporate governance. In addition, a voting stockholder is generally eligible to serve as a director or as a member of the nominating committee.

Question 4

What are participation certificates?

Accepted Answer

Borrowers obtaining loans for rural homes and certain farm-related businesses are not eligible to hold voting stock, but borrowers must instead purchase participation certificates. In addition, persons who are eligible to borrow may purchase participation certificates in order to qualify for finance-related services. Owners of participation certificates do not have voting rights, with the exception of when stockholders authorize the issuance of preferred stock and are not eligible to serve on the association's board of directors. In all other respects, stock and participation certificates have the same rights and restrictions.

Question 5

What amount of stock must I buy?

Accepted Answer

The minimum level of stock-purchase requirements for loans and finance-related services is determined by the association's board of directors within a range set forth in the association's capitalization bylaws, which are subject to the approval of stockholders. Currently, the required stock investment is the lesser of 2 percent of the borrower total relationship or $1,000.

Question 6

In what form is my stock issued?

Accepted Answer

Your association issues a receipt for stock and participation certificates at the time they are issued. Ownership of the stock or participation certificates is recorded on the books of the association.

Question 7

Do voting stock/participation certificates earn dividents or patronage refunds?

Accepted Answer

Yes, owning stock or participation certificates may make you eligible to receive patronage refunds or dividends. Patronage refunds are based on the amount of business you have done with the association, and dividends are based on the number of shares of voting stock or participation certificates you hold. Declarations of patronage and dividends are made at the sole discretion of the board of directors upon review of the association's financial performance.

Question 8

Does Stock Change In Value?

Accepted Answer

The $5 per share par value of your association stock or the $5 face value of your participation certificates does not change, but the book value could increase or decrease depending on the financial condition of your association. Any retirement, however, will be at the lower cost of par value or book value.

Question 9

How does default affect my investment?

Accepted Answer

The association will have a first lien on your stock or participation certificates as additional collateral for your loan(s) or any other indebtedness to the association. In the event of a default on the loan(s), all or part of the stock may be applied to the loan(s), or under certain circumstances, may be otherwise disposed of as deemed to be appropriate by the association.

Question 10

Is there risk associated with my stock investment?

Accepted Answer

Your ownership of stock or participation certificates is an investment that allows you to share in the association's earnings through patronage refunds and/or dividends, but which is also subject to certain risks that could result in a partial or complete loss of the investment. It is not a compensating balance. The ultimate value of the stock is dependent on the future financial performance and condition of the association over time. Therefore, you cannot assume that stock will be redeemed on demand or upon a certain date or upon the happening of any event, such as a repayment of the loan (as could be the case if the investment were considered a compensating balance). You are responsible for the full amount of your loan, including the amount borrowed to pay for your stock or certificates, regardless of their book value. Members are advised to review the financial reports of Alabama Farm Credit, the association's capitalization bylaws and other available information about the Farm Credit System, copies of which are available from the association upon request.

Question 11

What happens to the stock if the association is luquidated?

Accepted Answer

If the association is liquidated, the law prohibits stock retirements until the assets of the association are used to meet its liabilities. The remaining assets after the liquidation is completed are all divided on a pro-rata basis among current stockholders, according to the proportion of stock they own.

Question 12

What happens to my stock when the loan is repaid?

Accepted Answer

Stock requirements are at the sole discretion of the board of directors based on the association's capital strength and financial performance. They cannot be retired on-demand or on a certain date. However, the association board has policies and procedures to maintain adequate capital and allow for the orderly retirement of stock, when requested by a stockholder, in a safe and sound manner.

Question 13

What amount of stock must I buy?

Accepted Answer

The minimum level of stock-purchase requirements for loans and finance-related services is determined by the association's board of directors within a range set forth in the association's capitalization bylaws, which are subject to the approval of stockholders. Currently, the required stock investment is the lesser of 2 percent of the borrower total relationship or $1,000.

Question 14

What determines the time or method of repayment?

Accepted Answer

Primarily, the nature of the loan, its purpose and the financial capacity of the customer determine repayment options. Repayments are set up to coincide with the borrower's cash flow. They also may be paid in installments from farm operations or non-agricultural sources.

Question 15

What form of collateral is required?

Accepted Answer

All real estate loans must be secured by a first-lien mortgage on real estate, generally on the farm, timberland, agribusiness or rural home that is financed by the loan. Operating, equipment and livestock loans are generally secured by inventory such as crops, livestock, equipment, receivables or other assets of the operation being financed.

Question 16

What access do I have to loans?

Accepted Answer

Ag Banking Online allows you to view loans, unpaid principal or available commitment, interest rates, current amount due and interest paid year-to-date. You can schedule one-time loan payments or recurring payments (daily cut-off times and restrictions may apply).

Question 17

Can I set up reminders or notifications using the app?

Accepted Answer

Yes. You can add alerts relevant to your banking transactions in the app's personalized settings feature.

Question 18

Can users make transactions and payments or is the app limited to viewing account information only?

Accepted Answer

Users can view accounts and transactions, but this online banking tool also allows users to make payments and other transactions (daily cut-off times and restrictions may apply). You can also schedule future one-time payments, set up recurring payments or add alerts and reminders.

Question 19

Where do I download the mobile app

Accepted Answer

Get the free mobile app by searching Alabama Farm Credit Ag Banking on Apple App Store or Google Play.

Frequently Asked Questions

The Organization

Can users make transactions and payments or is the app limited to viewing account information only?

Voting Stock

Can users make transactions and payments or is the app limited to viewing account information only?

Our Loans

Can users make transactions and payments or is the app limited to viewing account information only?

The Mobile App

Can users make transactions and payments or is the app limited to viewing account information only?