Northwest Farm Credit Services, of Spokane, says it had second-quarter net income of $56.1 million, up sharply from $29.4 million in the 2011 second quarter.

For the first six months of 2012, the federally chartered ag lender reports earnings of $101.1 million, up from $71.6 million in the first half of last year.

The cooperative says the increased income is due mostly to a reduced provision for loan losses and a refund of premiums paid to the Farm Credit System Insurance Corp. It's a federally controlled entity that ensures the timely payment of notes, bonds, and other obligations on behalf of Farm Credit System banks.

Northwest Farm Credit Services also cites the regional agricultural industry's overall strength, remaining on the upswing even as extreme dry conditions have hurt the industry in the Midwest and some other parts of the U.S.

"Overall, agriculture has performed very well," says Phil DiPofi, Northwest Farm Credit's president in a press release. "Most producers have strengthened their balance sheets and are positioning themselves for growth opportunities."

The association received a total $11.2 million refund from the Farm Credit System Insurance Corp. for premiums paid in 2010 and 2011. The premiums are collected each year to help guarantee bonds that the Farm Credit System issues. The refunds occur occasionally when the federal organization accumulates what it deems to be excess funds in the premium pool.

Total loans owned and served by the association stood at $10 billion at the end of the quarter, which is the same amount it held the end of June last year. Meanwhile, nonaccrual loans, on which the association isn't collecting interest, dropped to 2.6 percent of its loan portfolio from 3.2 percent a year earlier.

Farm Credit had total assets of $8.9 billion at the end of the quarter, compared with $8.51 billion a year earlier.