ROCKLIN, Calif. — Today, Farm Credit West announced strong financial results for 2016 with continued growth in net income, earning assets and capital. 2016 is the first full year of combined earnings with Farm Credit Services Southwest since Farm Credit West’s acquisition of Southwest on November 1, 2015. The combined entity has benefited from strong earnings as well as geographic and commodity diversity.
Highlights:
- Net income for 2016 was $206 million. This compares with $169 million in 2015 which included only two months of earnings from Southwest as a result of the timing of the merger. 2016 earnings were positively impacted by the exceptional loan growth experienced last year as well as a full year of earnings from the Southwest subsidiaries.
- Earning assets grew to $9.6 billion by the end of 2016 from $9.1 billion at the end of 2015. Average earning assets were $9.2 billion for 2016 compared to $7.6 billion for 2015. The average earning assets in 2016 included a twelve month average of $0.9 billion for Southwest’s average loan volume whereas 2015 included only two months. Total assets were $10.0 billion at December 31, 2016.
- Asset quality declined slightly to 96.3% non-adversely classified loans at year-end 2016 compared with 96.8% at year-end 2015. Nonearning asset volume increased to $142 million at the end of 2016 compared to $120 million at the end of 2015. While there were significant pay offs of nonearning assets, there were several large loan complexes that were moved to nonaccrual loans during 2016 mostly due to stress in the nursery industry.
- Total capital at the end of 2016 was $1.9 billion compared to $1.8 billion at the end of 2015. Maintaining a strong capital position is critical to ensure the association is protected from unexpected future losses and enhances Farm Credit West’s overall financial strength.
These positive results contributed to the Farm Credit West Board’s decision to declare a record cash patronage distribution of $79.5 million, which was paid to eligible customer-owners in February 2017.
Mark Littlefield, President and CEO of Farm Credit West said, “We are very pleased with Farm Credit West’s success in 2016 and the successful integration of Southwest’s operations. We were especially honored to be able to celebrate the Farm Credit System’s 100th year anniversary in 2016 with our fellow 73 associations and four funding banks located across the United States. Our mission for 100 years has not changed – to ensure that farmers, ranchers and agribusinesses would always have a consistent, affordable and reliable source of funding – in good times and bad. Farm Credit West is proud to serve agriculture today as it has for the last 100 years.”
—Farm Credit West
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