MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their second quarter financial results for 2015. Average accruing loan volume for the first six months of 2015 was $2.26 billion, an increase of 3.6 percent compared to the same 2014 period. Net interest income for the second quarter was $16.2 million, a 4.7 percent decrease from the same time period in 2014. Net income for the quarter of $10.8 million was below the $12.0 million for the same quarter of 2014, but was consistent with the $10.8 million of net income for the first quarter of 2015. For the first six months of 2015, net income of $21.6 million was down $1 million from the same period in 2014.
“The competitive environment for quality loans, coupled with an increase in our cost of funds, has resulted in a decrease in the association’s interest rate margin over the past year,” said John Wheeler, CFO of MidAtlantic Farm Credit.
Nonaccrual loans of $24.5 million at June 30, 2015 were down $0.5 million from December 31, 2014 and down $4.3 million from June 30, 2014. The association’s nonaccrual loans as a percentage of total loans also decreased to 1.1 percent at the end of the second quarter of 2015, compared to 1.3 percent at June 30, 2014. The allowance for loan losses represented over 100 percent of nonaccrual loans at June 30, 2015.
Bob Frazee, CEO of MidAtlantic Farm Credit, stated, “Our performance is continuing on a strong and positive trajectory. Earnings were $21.6 million and we continue to add new borrowers to our cooperative. Credit quality is improving and our nonaccruing loans are at the lowest level since mid-2008. Our volume is increasing as accruing loans are up nearly 5 percent over the same time last year.”
At June 30, 2015, shareholders’ equity totaled $533.5 million, up 3.0 percent from December 31, 2014, and the permanent capital ratio was 20.95 percent. That number is compared with the 7.0 percent minimum mandated by the Farm Credit Administration (FCA), the lender’s independent regulators.