What is in this article?:
- American AgCredit reaps records in 2011
- 2011 Dividend Payout
- American AgCredit's full‐year earnings and net interest income reached record highs in 2011, and loan quality remained stable throughout the year.
- American AgCredit paid out $34.7 million in dividend distributions to its customers, the highest customer dividend paid out in the history of the Association.
American AgCredit, the nation’s sixth largest Farm Credit Association announced financial results for 2011. Full‐year earnings and net interest income reached record highs, and loan quality remained stable throughout the year. The Associationʹs overall levels of capital and liquidity remained strong.
ʺWeʹre extremely pleased with our financial results and business performance for 2011,ʺsaid President and Chief Executive Officer Ron Carli. ʺDespite an economic environment that remains challenging, we continue to serve as a dependable source of credit for farmers, ranchers and other types of agribusiness in our territories.”
2011 Financial Results
American AgCreditʹs net income for 2011 was a record $180.7 million, up $99.4 million from 2010, and up more than $130 million from 2009. (Adjusting for a one‐time recapitalization transaction from the funding bank, net income would have been $92.7 million, up $11.4 million from 2010.) Average loan volume was $4.39 billion. Net interest income was $128 million, with permanent capital ratio at year-end standing at 21.6 percent.
Net interest income decreased 5 percent in 2011 largely as the result of declining loan volume. Poor economic conditions during the past year have hampered new capital investments by the Association’s customer base, limiting new lending opportunities.
Overall, the Association’s geographic and commodity diversification, along with generally strong financial condition of its agricultural borrowers, have ensured the Association’s continued stability. Credit quality in American AgCredit’s loan portfolio remained stable at 95.9 percent acceptable at December 31, 2011.
Executive Vice President/Chief Credit Officer Bruce Richardson credits the Association’s sound underwriting standards and strong capital base.
ʺWe have the capacity necessary to stand by our customers and to meet their borrowing needs in all kinds of market conditions,ʺRichardson said.
“While credit quality is anticipated to remain sound in 2012, we expect gains in selected sectors combined with fewer government support programs to affect the loan portfolio.”
According to Chief Financial Officer Chris Call, the emphasis on diversification has created an Association that can withstand market shifts throughout various commodities.
“The Association’s steady growth in earnings allows for the payment of large cash dividends while also contributing to a healthy capital reserve,” said Call. “Agriculture is a cyclical business that is heavily influenced by production, operating costs and commodity prices. Based on our strong capital and diversified commodity positions, we are prepared to withstand significant economic volatility.”