The Farm Credit West Preferred Stock program (also known as H Stock) provides eligible existing stockholders the opportunity to further invest in their association while earning a competitive return on their investment. Below is a summary of some of the key features of this program. For a complete description of the terms and conditions of the Farm Credit West Preferred Stock program, you may request FCW’s Preferred Stock Disclosure Statement.
Who’s Eligible?An existing stockholder of any class of common stock or participation certificates of Farm Credit West who is an eligible accredited investor may purchase shares of Preferred Stock.
How are Dividends Paid?
- Rate - The dividend rate is established by the Farm Credit West Board of Directors on or before the last day of each calendar month. Current dividend rate and rate history can be found on the Farm Credit West website or obtained from your local Farm Credit West office.
- Automatic Reinvestment of Dividends - Under the terms of the Subscription Agreement, any dividend paid on Preferred Stock will be applied to the purchase of additional shares of Preferred Stock at par value. Accordingly, holders of Preferred Stock will not receive cash distributions until stock is retired by redemption. Instead, any dividend paid on Preferred Stock will result in an increase in the number of shares held by each holder.
- Declaration - Dividends will be declared in the order accrued (i.e., the oldest first) and will be payable upon declaration by the Farm Credit West Board. Dividends will be paid on the effective date of the declaration to holders of Preferred Stock during the period specified by the declaration.
When can I request retirement?Preferred Stock has no fixed maturity, term, or retirement date. A holder of Preferred Stock may request retirement at any time. Retirement requests must be for a minimum of 1,000 shares ($1,000). Shares of Preferred Stock may be retired only at the discretion of the Farm Credit West Board provided certain regulatory requirements are met. Retirements may also require the approval of the Farm Credit Administration. All shares approved for retirement will be retired at an amount equal to the share’s par value, plus accrued but unpaid dividends.
When are my transactions processed?Farm Credit West processes Preferred Stock Program investments and retirements only on the first business day of the month. The amount of Preferred Stock issued to each holder will be on a “first come, first served” basis after considering any individual or program issuance limitations then in effect.
Is my Preferred Stock Transferable?Preferred Stock is transferable only to another holder of Preferred Stock subject to maximum hold limits and then only after the transferor provides written notice to Farm Credit West.
Preferred Stock is an “At-Risk” InvestmentThe purchase of Preferred Stock is an “at risk” investment in Farm Credit West. It is not a deposit or compensating balance. Neither the return of the purchaser’s investment, in whole or in part, nor the receipt of any dividends thereon, is guaranteed by the Association or any affiliate thereof, any federal or state government or agency, or any third party.
What are the Tax Consequences of holding Preferred Stock?The Association will comply with applicable dividend reporting requirements under federal income tax laws. Any dividends paid by Farm Credit West on Preferred Stock will be reported annually to you and to the Internal Revenue Service on Form 1099-DIV. Each holder of Preferred Stock is urged to consult their own tax advisor as to specific tax consequences, including tax return reporting requirements and the applicability and effect of federal, state, local, and other applicable tax laws.
Click here to view the Farm Credit West Capitalization Bylaws
Click here to view the Farm Credit West Annual and Quarterly Reports