MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their second quarter financial results for 2020. Accruing loan volume for the first six months of 2020 was $2.78 billion, an increase of 0.95 percent compared to the same 2019 period. Net income for the quarter was $11.9 million, a 3.7 percent decrease compared to the second quarter of 2019. For the first six months of 2020, net income of $24.9 million, a 0.83 percent decrease from the same period in 2019. The decrease is a result of the impact of a loan payment deferral program in response to the COVID-19 epidemic. Net interest income for the second quarter was $17.3 million, a 4.6 percent decrease from the same time period in 2019.
Nonaccrual loans of $52.8 million at June 30, 2020 were up $6.5 million from December 31, 2019 and up $3.2 million from June 30, 2019. The Association’s nonaccrual loans as a percentage of total loans also increased to 1.84 percent at the end of the second quarter of 2020, compared to 1.75 percent at June 30, 2019. The Association recorded a $3 million provision for loan losses in the first six months of 2020, compared to a $2 million provision for loan losses in the first six months of 2019. The allowance for loan losses represented 67 percent of nonaccrual loans at June 30, 2020, compared to 64 percent at June 30, 2019.
“The second quarter of this year was a difficult time for our members as the pandemic kept most people at home and limited the amount of opportunities for growth,” says Tom Truitt, CEO of MidAtlantic Farm Credit. “However, our association remained available throughout the quarter, assisting our members in any way possible. Our loan deferral program is a direct reflection of how we are here for our members in both the good times and the bad.”
As of June 30, 2020, shareholders’ equity totaled $671.4 million, up 1.5 percent from December 31, 2019, and the Total Capital ratio was 22.11 percent. That number is compared with the 10.5 percent minimum, including the capital conservation buffer, mandated by the Farm Credit Administration (FCA), the lender’s independent regulator. The Association distributed cash patronage to its member-borrowers of $27.0 million in 2020.