Northwest Farm Credit Services, of Spokane, has reported 2009 net income of $106.1 million, down from $124.4 million in 2008.

The federally-chartered ag-lending cooperative set aside $79.4 million in 2009 for potential credit losses, up from $19.2 million in the previous year.

"In spite of the difficult economy and a few commodities experiencing severe downturns, Northwest FCS experienced another year of solid earnings," says Jay Penick, the organization's president and CEO. "The dairy industry is still under stress from a price perspective. The wheat industry, because of price protection, did pretty well" last year. He says the Inland Northwest cherry crop included a large number of small cherries because of weather problems.

Penick adds, "The overall economy is beginning to strengthen, but we expect a longer recovery than in past recessions."

Northwest Farm Credit's capital increased by 7.6 percent during 2009, and the cooperative ended the year with $1.2 billion in total capital.

"With our strong level of capital, Northwest FCS remains well-positioned to continue providing consistent and reliable financing to our customers and prospective customers," Penick says.

The lending co-op's net interest income climbed to $230.8 million in 2009, from $192 million in the earlier year, while its noninterest income rose to $68.8 million, from $59.2 million.

As of Dec. 31, it had $8 billion in loans, up from $7.8 billion a year earlier. It had $8.6 billion in total assets, up from $8.3 billion at the end of 2008.

At year-end, borrowers were delinquent on loans that totaled 1.5 percent of the lender's portfolio, up from 0.8 percent a year earlier, but 1.5 percent is still a relatively lower percentage, Penick says. Nonaccrual loans, on which payments are in question, were 3.3 percent of its portfolio, up from 1 percent at the end of 2008, though "a high percentage are still current," Penick says.

The ag lender posted a 1.27 percent return on average assets in 2009, down from 1.63 percent in 2008. Its net interest income as a percentage of average earning assets increased to 2.9 percent last year from 2.7 percent the year before.