Farm Credit's net reaches $34.1 million
Co-op's earnings double through first six months of 2010, to $75 millionAugust 26th, 2010
Northwest Farm Credit Services has reported second-quarter net income of $34.1 million, up sharply from $18.5 million in the second quarter of 2009.
Through the first six months of this year, the Spokane-based, federally-chartered ag-lending cooperative's net income was $75.2 million, compared with $35.6 million in the year-earlier period.
"In 2009, we significantly increased our allowance for loan-loss reserves to offset the risks we saw in several of the commodities we finance," says President and CEO Jay Penick. "Because of this, we didn't require significant (loan-loss) provision expenses in 2010."
Other factors that contributed to the improved quarterly and year-to-date earnings were increased income from crop-insurance sales and higher spreads on the cooperative's loan portfolio due to lower funding costs, the cooperative says.
It says its total capital increased by 11.2 percent, to $1.28 billion, in the second quarter. Its nonaccrual loans, or loans on which the cooperative isn't earning interest, totaled 3.4 percent of its loan portfolio as of June 30, compared with 2.5 percent a year earlier. Penick says that most of the increase in nonaccrual loans 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," he says. "We are still monitoring our dairy portfolio closely as prices have improved only slightly."
Northwest Farm Credit provides financing, related services, and crop insurance to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, and rural homeowners in Washington, Oregon, Idaho, Montana, and Alaska.