Farm Credit West Reports Strong 2020 Financial Results
ROCKLIN, CA. — March 11, 2021 – Earlier today, Farm Credit West – a cooperative lending institution focusing exclusively on the agriculture industry – announced strong financial results for 2020 with continued growth in net income, earning assets and capital. These strong results positively positioned the Association to distribute 1.5% of eligible average outstanding loan balances in 2020 to customer-owners in a cash patronage dividend. This included a special pandemic related relief payment of 50 basis points (or .5%) declared by the Board mid-year and paid during the summer of 2020.
“The agricultural industry was among those most impacted by the COVID-19 pandemic and related closures,” Mark Littlefield, President and CEO of Farm Credit West noted. “The continued financial strength of our Association in 2020 placed us in the ideal position to distribute an increased patronage dividend to our customers when they most needed it. I commend our Board of Directors; whose actions continually exhibit wise governance practices as they prioritize our customers’ needs in every decision.”
As a member-owned cooperative, Farm Credit West has distributed over $1.014 billion in cash dividends since the Patronage Program’s inception in 2002. The varied geographic and commodity diversity of its activities in California and Arizona contributed to the strong earnings results in 2020. Below is a summary of the Association’s financial performance last year:
- Net income for 2020 was $296 million as compared to $255 million in 2019. Net income in 2020 was positively impacted by an increase in net interest income due to strong growth and performance stability in the loan portfolio.
- Earning assets grew to $11.9 billion by the end of 2020 from $10.6 billion at the end of 2019. Average earning assets were $10.9 billion for 2020 compared to $10.0 billion for 2019.
- Asset quality improved slightly to 95.6% non-adversely classified loans at year-end 2020 compared with 95.4% at the end of 2019. Additionally, nonaccrual loans and other property owned decreased to $99.6 million at the end of 2020 compared to $126.4 million at the end of 2019.
- Total capital at the end of 2020 was $2.4 billion compared to $2.3 billion at the end of 2019. Farm Credit West’s primary capital ratio measurement is common equity tier 1 (CET1). The CET1 ratio was 13.9% at the end of 2020 compared to a CET1 ratio of 14.4% at the end of 2019. Both were well in excess of the regulatory capital requirements.
Farm Credit West is a lending institution of the Farm Credit System with California branch offices in Bakersfield, Dinuba, Hanford, Imperial Valley, 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.