Northwest Farm Credit Services Reports Second Quarter Earnings
SPOKANE, Wash. (August 6, 2010) – Northwest Farm Credit Services announced 2010 second quarter earnings of $34.1 million, compared to $18.5 million for the second quarter of 2009. Total capital increased 11.2 percent to $1.283 billion when compared to the previous year. Earnings for the first six months of 2010 were $75.2 million compared to $35.6 million at June 30, 2009.
President and Chief Executive Officer Jay Penick said, “The significant increase in our earnings for 2010 over 2009 can be attributed to a number of factors. In 2009, we significantly increased our allowance for loan loss reserves to offset the risks we saw in several of the commodities we finance. Because of this, we didn’t require large provision expenses in 2010.”
Penick explained that 2010 earnings were also affected by a decrease in Farm Credit System’s Insurance Corporation’s premiums for 2010 and a redistribution of previous premiums paid due to the Insurance Corporation’s insurance fund meeting its secured base amount.
Other contributors to increased 2010 earnings were increased income from crop insurance sales and higher spreads on the loan portfolio, due to both lower funding costs and pricing to the increased level of risk in the portfolio.
Non-accrual loans at June 30, 2010, were 3.40 percent of the loan portfolio compared to 2.50 percent at June 30, 2009. According to Penick most of the increase occurred in late 2009 to address increased stress in several commodities. “The 2010 outlook has stabilized for most commodities including dairy, timber, nursery, and grain,” Penick said. “We are still monitoring our dairy portfolio closely as prices have improved only slightly.”
NORTHWEST FARM CREDIT SERVICES, ACA
Consolidated Balance Sheet
(unaudited)
| dollars in thousands |
June 30, 2010 |
June 30, 2009 |
| Loans |
$ 8,012,461 |
$ 8,048,600 |
| Less: allowance for loan losses |
100,000 |
78,000 |
| Net loans |
7,912,461 |
7,970,600 |
| Investment in CoBank, ACB |
304,250 |
274,631 |
| Other assets |
164,583 |
166,081 |
|
Total Assets
|
$ 8,381,294 |
$ 8,411,312 |
| Notes payable to CoBank, ACB |
$ 6,947,936 |
$ 7,095,611 |
| Other liabilities |
150,617 |
162,246 |
| Total Liabilities |
7,098,553 |
7,257,857 |
| Capital |
1,282,741 |
1,153,455 |
|
Total Liabilities and Capital
|
$ 8,381,294 |
$ 8,411,312 |
NORTHWEST FARM CREDIT SERVICES, ACA
Consolidated Statement of Income
(unaudited)
| dollars in thousands |
| For Six Months Ended June 30, |
2010 |
2009 |
| Net interest income |
$ 120,594 |
$ 106,036 |
| Provision for credit losses |
(33,863) |
(51,095) |
| Noninterest income |
41,139 |
30,503 |
| Operating expenses |
(50,648) |
(54,367) |
| Other, net |
(10) |
(10) |
| (Provision)/Benefit for income taxes |
(2,048) |
4,543 |
| Net Income |
$ 75,164 |
$ 35,610 |
Northwest Farm Credit Services provides financing, related services and crop insurance to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, and rural homeowners in Montana, Idaho, Oregon, Washington, and Alaska.
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