MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their third quarter financial results for 2014. Net income for the quarter of $12.3 million was up $2.3 million from the $10.0 million for the same quarter of 2013. For the first nine months of 2014, net income increased 9 percent to $34.8 million. This improvement in profitability resulted primarily from a $5.9 million reduction in the loan loss provision for the first nine months of 2014, as compared to 2013. Net interest income for the third quarter of $16.9 million was flat compared to the same time period in 2013. Average accruing loan volume for the first nine months of 2014 was $2.20 billion, an increase of 4.5 percent compared to the same 2013 period.
“The allowance for loan losses represented over 92 percent of nonaccrual loans at September 30, 2014, compared to 85 percent at September 30, 2013,” said John Wheeler, CFO of MidAtlantic Farm Credit. “That is a sign of both our strong reserve, as well as the continuing strength of the agricultural sector in our territory.”
Nonaccrual loans of $27.3 million at September 30, 2014 were up $0.5 from December 31, 2013 but down $1.5 million from September 30, 2013. The Association’s nonaccrual loans as a percentage of total loans also decreased to 1.2 percent at the end of the third quarter of 2014, compared to 1.3 percent at September 30, 2013.
Bob Frazee, CEO of MidAtlantic Farm Credit, stated, “Our performance is continuing on a strong and positive trajectory. Earnings were $34.8 million and are almost 9 percent higher than the same time last year. Credit quality continues to improve and loans are growing. Our volume is increasing as accruing loans are up over 4 percent from the same time last year.”
At September 30, 2014, shareholders equity totaled $509.3 million, up 4.1 percent from December 31, 2013. This year is the first time shareholders equity has exceeded a half billion dollars. The permanent capital ratio was 20.38 percent, compared with the seven percent minimum mandated by the Farm Credit Administration (FCA).
Subsequent to the end of the quarter, the Association was advised that it would receive a special distribution of approximately $21 million dollars, which will be reflected in fourth quarter income.