MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their second quarter financial results for 2014. Net income for the quarter was $12.0 million, comparable to the $12.1 million for the same quarter of 2013. For the first six months of 2014, net income increased 2 percent to $22.6 million. This improvement in profitability resulted primarily from a $3.9 million reduction in the loan loss provision for the first six months of 2014, as compared to 2013. Net interest income for the second quarter was $16.9 million, a 2.5 percent increase from the same time period in 2013. Average accruing loan volume for the first six months of 2014 was $2.2 billion, an increase of 4.7 percent compared to the same 2013 period.
“The allowance for loan losses represented almost 90 percent of nonaccrual loans at June 30, 2014, compared to 64 percent at June 30, 2013,” said John Wheeler, CFO of MidAtlantic Farm Credit.
Nonaccrual loans of $28.8 million at June 30, 2014 were up $2.1 from December 31, 2013 but down $5.7 million from June 30, 2013. The association’s nonaccrual loans as a percentage of total loans also decreased to 1.3 percent at the end of the second quarter of 2014, compared to 1.6 percent at June 30, 2013.
Bob Frazee, CEO of MidAtlantic Farm Credit, stated, “Our performance is continuing on a strong and positive trajectory. Earnings were $22.6 million and are more than 2% higher than the same time last year. Credit quality is improving and loans are growing. Our volume is increasing as accruing loans are up nearly 5% over the same time last year.”
At June 30, 2014, shareholders’ equity totaled $501.8 million, up 2.6 percent from December 31, 2013, and the first time shareholders equity has exceeded a half billion dollars. The permanent capital ratio was 20.5 percent, compared with the 7.0 percent minimum mandated by the Farm Credit Administration (FCA).