MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their second quarter financial results for 2017. Average accruing loan volume for the first six months of 2017 was $2.62 billion, an increase of 7.0 percent compared to the same 2016 period. Net income for the quarter was $11.7 million, a 0.2 percent increase compared to the second quarter of 2016. For the first six months of 2017, net income of $23.5 million was up $1.7 million, a 7.8 percent increase from the same period in 2016. Net interest income for the second quarter was $16.9 million, a 2.5 percent increase from the same time period in 2016.
“While we have seen a very strong loan demand over the past year, the competitive environment for quality loan volume has resulted in a slight decline in our net interest margin and little overall net change in our net interest income for the past year,” says John Wheeler, MidAtlantic Farm Credit’s Chief Financial Officer.
Nonaccrual loans of $20.6 million at June 30, 2017 were down $2.3 million from December 31, 2016 and down $0.9 million from June 30, 2016. The Association’s nonaccrual loans as a percentage of total loans also decreased to 0.77 percent at the end of the second quarter of 2017, compared to 0.78 percent at June 30, 2016. The Association recorded a $1 million provision for loan losses in the first six months of 2017, while no provision was recorded in the same 2016 period. The allowance for loan losses represented 123 percent of nonaccrual loans at June 30, 2017, compared to 122 percent at June 30, 2016.
Thomas Truitt, Chief Executive Office of MidAtlantic Farm Credit, states, “While we are beginning to see a slight decline in our credit quality, our portfolio quality overall remains very strong. We increased our membership over 2.2 percent during the past twelve months, further supporting the significant role that Farm Credit plays in providing dependable and reliable financing to farmers and rural areas in our marketplace.”
At June 30, 2017, shareholders’ equity totaled $585.9 million, up 3.5 percent from December 31, 2016, and the permanent capital ratio was 19.79 percent. That number is compared with the 7.0 percent minimum mandated by the Farm Credit Administration (FCA), the lender’s independent regulators.