Did you know we have a mobile site?

Skip Ribbon Commands Skip to main content
My Access Login
Advanced Search
AgriBank Reports First Quarter 2013 Financial Results
Bookmark and Share

St. Paul based AgriBank announced financial results for the first quarter of 2013.


Source: AgriBank

Contact: Kirstin Grantham at 612-547-6397

AgriBank Reports First Quarter 2013 Financial Results


Today St. Paul based AgriBank announced financial results for the first quarter of 2013.

Highlights

  • Net income rose 22% to $140.0 million for the first quarter of 2013. Net interest income was $128.3 million compared with $109.0 million for same period of 2012. Non-interest income was $40.9 million, up 16% from $35.3 million.
  • Loan portfolio credit quality remains strong as loan loss provisions decreased 82% to $0.5 million and non-adverse loans stood at 99.8%.
  • Cash and investments totaled $12.8 billion at the end of the quarter, compared with $12.1 billion at the end of last year. End of the period liquidity was 165 days, well above the regulatory requirement. Capital increased $102.2 million from year end to $4.4 billion.

“Strong fundamentals in agriculture and efficient funding contributed to continuing strong performance. Enterprises in the AgriBank District continue to perform well and mineral income continues to grow. We anticipate continued loan growth and strong earnings,” said AgriBank CEO Bill York. “This spring we are seeing the effects of the drought reduced significantly, but a late spring and other factors may impact the earnings of some of our customers this year. Credit quality remains strong and we continue to add to our already strong capital base to position us for expected long term growth and potential risks in this vibrant sector.”

Results of Operations

Net income rose 22% to $140.0 million for the first quarter of 2013, up from $114.8 million in the same period of 2012.

Net interest income was $128.3 million compared with $109.0 million in the same period in 2012, driven primarily by an increase in retail volume, including significant growth in loan participations purchased from the AgDirect equipment financing program. Net interest income remains elevated as the Bank continues to take advantage of a favorable interest rate environment by re-pricing callable debt at lower costs.

Loan loss provisions decreased 82% to $0.5 million with current period provisions primarily related to growth in AgDirect.

Non-interest income was up 16% to $40.9 million from $35.3 million in 2012. The increase was attributable to a $4.7 million (38%) increase in income from mineral rights held by AgriBank, the majority of which are in North Dakota.

Loan Portfolio

Total loans declined 3% to $67.7 billion at the end of the quarter, reflecting seasonal paydowns that occur during the first quarter of the year as customers sold crops after year end. AgriBank’s loan portfolio credit quality remains strong with 99.8% non-adverse loans at the end of the period, compared with 99.7% at the end of last year. Nonaccrual loans declined to $51.2 million from $51.4 million at the end of last year while the allowance for loan losses was $12.8 million at March 31, 2013 compared with $13.3 million at the end of last year.

The farm sector continues to perform well despite the effects of the 2012 drought. Multi-peril crop insurance (MPCI) generally mitigated the economic impact of the drought for most crop producers. USDA currently forecasts net farm income of $112.8 billion for 2012, 4.2% lower than 2011. The increased prices for grain commodities are having some negative impact on livestock, poultry, ethanol, and dairy producers who purchase these inputs. Some of this impact is negated by the use of hedging and forward pricing that occurs in these agriculture sectors.

For 2013, the USDA is forecasting net farm income to increase by $15.4 billion to a record $128.2 billion. Higher levels of crop production are forecast but are partially offset by lower projected commodity prices. For this same period, net cash income is projected to decline by $13.2 billion to $123.5 billion. The different trajectories for net farm income and net cash income are mainly due to expectations of substantial increases in the value of corn inventories during the year. Value of inventory change is included in net farm income but only affects net cash income when inventories are sold. The value of corn inventories is expected to rise based on projections of average corn yields and historic corn-acreage levels.

Drought conditions continue in parts of the U.S. but have improved since the fall of 2012. Much of the Midwest now has adequate moisture while parts of the western Corn Belt continue to be in a drought situation. An exceptionally cold spring and excessive precipitation also threaten planting progress on several spring planted crops which could have a negative impact on 2013 crop production.

Liquidity and Capital Resources

Cash and investments (substantially all of which are held for liquidity purposes) totaled $12.8 billion at the end of the quarter compared with $12.1 billion at the end of last year. The Bank’s end of the period liquidity position represented 165 days coverage of maturing debt obligations, well above the 90 day minimum established by the Farm Credit Administration, the Bank’s independent regulator.

Total capital increased $102.2 million during the period to $4.4 billion, driven primarily by earnings of $140.0 million and a reduction in other comprehensive loss of $26.0 million offset by $68.2 million in patronage to Associations.

About AgriBank


AgriBank is one of the largest banks within the national Farm Credit System, with more than $80 billion in total assets. Under the Farm Credit System’s cooperative structure, AgriBank is owned by 17 affiliated Farm Credit Associations. The AgriBank District covers America’s Midwest, a fifteen state area from Wyoming to Ohio and Minnesota to Arkansas. More than half of the nation’s cropland is located within the AgriBank District, providing the Bank and its Association owners with exceptional expertise in production agriculture. For more information visit www.agribank.com.