2018 Financial Results Announced
ROCKLIN, CA. (March 20, 2019) – Farm Credit West, a cooperative lending institution focusing exclusively on the agricultural industry, recently announced strong financial results for 2018 with continued growth in net income, earning assets and capital. Farm Credit West benefited from strong earnings as well as geographic and commodity diversity as a result of its activities in California and Arizona.
These positive results contributed to the Farm Credit West Board’s decision to declare a record cash patronage dividend totaling $115.7 million, paid in February 2019. Eligible customer-owners received back 1% of eligible average loan balances, a 25 bps increase from patronage distributions in 2018.
“We are very pleased with Farm Credit West’s success in 2018,” said Mark Littlefield, President and CEO of Farm Credit West. “With such a strong finish to last year, we enter 2019 with renewed passion to fulfill the same mission we have held for over 100 years - to ensure that farmers, ranchers and agribusinesses have a consistent, affordable and reliable source of funding – in good times and bad - despite the challenges that agricultural producers face.”
Net income for 2018 was $248 million compared to $220 million in 2017. Net income in 2018 was positively impacted by an increase in net interest income due to solid performance and stability in the loan portfolio as well as the impact of rising interest rates on growing capital.
Earning assets grew to $10 billion by the end of 2018, an increase from $9.7 billion at the end of 2017. Average earning assets were $9.6 billion for 2018 compared to $9.5 billion for 2017.
Asset quality declined slightly to 95.6% non-adversely classified loans at year-end 2018 compared with 95.9% at the end of 2017. Conversely, nonaccrual loans and other property owned decreased to $113 million at the end of 2018 compared to $117 million at the end of 2017.
Total capital at the end of 2018 was $2.2 billion compared to $2.1 billion at the end of 2017. Farm Credit West’s primary capital ratio measurement is common equity tier 1 (CET1). The CET1 ratio was 14.0% at the end of 2018 compared to a CET1 ratio of 13.3% at the end of 2017. Both were well in excess of the regulatory requirements.
Farm Credit West is a lending institution of the Farm Credit System with California branch offices in Bakersfield, Dinuba, Hanford, Imperial, Santa Maria, Templeton, Tulare, Ventura, Woodland and Yuba City; and Arizona branch offices in Tempe, Safford, and Yuma. The corporate headquarters is located in Rocklin, California. The Farm Credit System is a nationwide network of borrower-owned lending institutions and specialized service organizations created by Congress in 1916. The System provides loans, leases, and related services to farmers, ranchers, rural homeowners, agribusinesses and agricultural and rural utility cooperatives nationwide. Visit www.farmcreditwest.com.