MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their third quarter financial results for 2016. Average accruing loan volume for the first nine months of 2016 was $2.48 billion, an increase of 8.3 percent compared to the same 2015 period. Net income for the quarter was $12.1 million, a 4.4 percent increase compared to the second quarter of 2016 and up 7.6 percent compared to the third quarter 2015.
For the first nine months of 2016, net income of $33.9 million was up $1.1 million from the same period in 2015. Net interest income for the third quarter was $17.0 million, a 6.0 percent increase from the same time period in 2015.
“Strong loan growth coupled with a continued reduction in nonaccrual loans were the contributing factors to the increase in net interest income for the quarter and year to date,” says John Wheeler, CFO of MidAtlantic Farm Credit.
Nonaccrual loans of $18.9 million at September 30, 2016 were down $6.0 million from December 31, 2015 and down $7.8 million from September 30, 2015. The association’s nonaccrual loans as a percentage of total loans also decreased to 0.7 percent at the end of the third quarter of 2016, compared to 1.1 percent at September 30, 2015. The allowance for loan losses represented 127 percent of nonaccrual loans at September 30, 2016, compared to 94 percent at September 30, 2015.
Thomas Truitt, CEO of MidAtlantic Farm Credit states, “Over the past year, we have increased the number of shareholders we serve by over five percent. In a market where borrowers have choices, this further evidences the value which Farm Credit brings to the agricultural sector.”
At September 30, 2016, shareholders’ equity totaled $564.4 million, up 4.6 percent from December 31, 2015, and the permanent capital ratio was 19.91 percent. That number is compared with the 7.0 percent minimum mandated by the Farm Credit Administration (FCA), the lender’s independent regulators.
Subsequently to the end of the quarter, the Association was advised that it would receive a special distribution of approximately $12 million dollars from AgFirst Farm Credit Bank, which will be reflected in fourth quarter income. A similar special distribution from AgFirst was also received in the fourth quarter of 2015.