Farm Credit Update

First quarter shows continued growth at FCSAmerica

Farm Credit Services of America today reported growth in net income and loan volume for the first quarter of 2008. The company’s loan volume increased $734 million from year-end to $12.9 billion at March 31, 2008.

Net income for the first quarter was $49.1 million compared to $42.5 million in the first quarter of 2007.  The increase in net income is due to an increase in net interest income from the loan volume partially offset by an increase in noninterest expense and tax expense.

“FCSAmerica is maintaining a very strong financial position and is able to meet the increased credit demands we find in the diverse conditions of agriculture today,” commented Doug Stark, President and CEO.   “During the first quarter our customer-owners also received their patronage checks, allowing them to reinvest in their own operations and their local communities through sharing of our profits.” [News release: Download 2008_1st_qtr_earnings_release.doc ]

CoBank reports financial results for first quarter 2008

CoBank announced financial results for the first three months of 2008, reporting exceptional growth in loan volumes and net earnings. In addition, credit quality remained strong.

Net earnings rose 45 percent in the first quarter to $149.6 million, compared with $103.5 million for the same period in 2007. Net interest income rose 36 percent to $217.7 million, from $159.5 million the year before. Total loans and leases outstanding for CoBank increased to $46.8 billion at March 31, 2008, compared to $40.5 billion at year-end 2007.

Higher commodity prices for grain and oilseeds were a primary driver of loan growth and earnings for the quarter. While all of the bank’s lending units experienced growth in average loan volume, the most significant increases were in loans to agribusiness customers serving the grain and oilseeds markets. Increased prices and demand for farm supplies were also important factors.

“We continue to serve our agribusiness customers during what are extraordinary conditions in U.S. agricultural markets,” said Robert B. Engel, president and chief executive officer. “Since its formation, CoBank has established itself as a trusted financial partner to the nation’s grain cooperatives and other agribusinesses in virtually every key sector of the American farm economy. Today, those deep relationships are proving to be a significant source of value for our customer-owners throughout the country.” [News release: Download cobank_1q08_financial_results.pdf ]

Tenth Farm Credit District reports strong first-quarter financial results

The Tenth Farm Credit District reported strong first-quarter financial results, despite changing economic conditions.

“Although agricultural commodity prices and exports are at record high levels, rising input costs are making it more expensive to produce a crop and feed livestock,” said Larry Doyle, chief executive officer of the Austin-based Farm Credit Bank of Texas (FCBT). “These factors combined are beginning to put heavy credit demands on agricultural lenders, including Farm Credit cooperatives,” Doyle said.

“However, the Farm Credit System was established to provide agriculture with a reliable source of credit, even when other lenders may be facing funding and liquidity hurdles in today’s tight credit markets,” he said. 

Tenth District net income totaled $69.8 million for the quarter ended March 31, 2008, up 4 percent from the same period of 2007. The increase was primarily the result of an increase in net interest income, largely attributable to loan volume growth. The district set a new loan volume record, with gross loans totaling $15.7 billion at quarter end, a 3.8 percent increase from Dec. 31, 2007, and a 16.4 percent increase from a year earlier.

While the volume of total high-risk assets increased by $34.7 million, or 27.7 percent from year-end 2007, the credit quality of the district’s loan portfolio remained very strong. Loans classified as acceptable accounted for 98.8 percent of the portfolio — unchanged from three months ago and a year earlier.

“Recently, our Tenth District lending cooperatives returned $133.7 million in patronage to their customers, based on 2007 earnings. We hope that these patronage payments will help defray rising operating expenses for our agricultural producers,” said Ralph W. Cortese, FCBT board chairman.

AgSouth Farm Credit returns record $32.7 million to members

AgSouth Farm Credit CEO William P. Spigener, Jr. recently announced that on March 24, 2008, the cooperative distributed a record $32.7 million in patronage to its members. More than $9.3 million of the total patronage was returned in cash, with the remaining $21.7 million designated as allocated surplus. The patronage return represents nearly 28% of the total interest earned by AgSouth for the year ending December 31, 2007.

According to Spigener, “Since 1991 AgSouth has put more than $315 million of our profits into members’ pockets. The 2007 patronage we returned is nearly 28% of interest earned by the association. This means that for every $1.00 paid in interest on an AgSouth loan, members received 28 cents back. In February, the association revolved nearly $12 million in qualified surplus to members from the 2002 surplus pool. This year our customers have seen more than $21.5 million dollars in cash returned to them through the patronage program.” Spigener attributes the strength of the patronage program to the strong financial position of the cooperative and the commitment of the association’s directors, management, and staff. [News release: Download 2008_patronage_release.doc ]

Peggy Jo Jones appointed to First Pioneer Farm Credit Board

First Pioneer Farm Credit recently announced the appointment of Peggy Jo Jones, of Boise, Idaho, as an outside director on its board of directors.

Jones is a consultant providing training and human resource services to Albertsons LLC, a major food and drug retailer.  Prior to her current role, Jones held positions of increasing responsibility with Albertsons over her 31-year tenure with the organization, most recently as vice president of human resources for its Southern California division, which includes 292 stores and two distribution centers and employs more than 30,000 associates.

Jones’s professional profile also includes the chairmanship of the board of directors for Northwest Farm Credit Services, one of First Pioneer’s sister associations in the national Farm Credit System.  The Northwest association, headquartered in Spokane, Washington, serves farmers and ranchers in Montana, Idaho, Oregon, and Washington.  In addition, Jones chaired that board’s compensation committee and served on its audit, finance, and financial services committees. [News release: Download PeggyJone_OutsideDirector_April18.doc ]

Carolina Farm Credit to issue patronage checks

Member-borrowers of Carolina Farm Credit soon will receive patronage refunds checks for 2007, Michael R. Morton, CEO, announced recently. The amount of patronage to be paid and revolved in the future for borrowers of Carolina Farm Credit will total nearly $18.7 million.  Borrowers will receive a refund of 20 percent of the interest that accrued on their loans in 2007.  A cash refund of $5.6 million will be paid, and the remainder will be placed in allocated capital accounts for future revolvement.

"Carolina Farm Credit had another successful year in 2007. We're pleased to be able to share our success with our borrowers by putting our profits in their pockets," said Tony Ragan, Chairman of the Carolina Farm Credit board.  "This is the twentieth consecutive year we've paid a patronage refund.  In addition, the board of directors plans to retire the allocated surplus we issued in 2002 totaling $10.3 million in the fall of 2008.  Since 1988, Carolina Farm Credit has declared patronage totaling more than $304 million to be paid to its member-borrowers through patronage refunds and retirements of allocated surplus." [News release: Download 2008_patronage_refund_press_release.doc ]

Carolina Farm Credit hosts Ag Leadership Conference

Carolina Farm Credit recently held its eighth annual Agricultural Leadership Institute in Asheville, NC at the Grove Park Inn. This educational conference brings together and celebrates young, beginning, and small farmers and was created to equip young and beginning farmers to meet the challenges of modern agriculture and to encourage the sharing of ideas and networking within the industry.  There were 30 participants this year, either farm couples or individuals from across Carolina Farm Credit’s territory, selected for their farm leadership and achievements.

This dynamic and interactive seminar is led each year by Dr. David Kohl, Professor Emeritus at Virginia Tech and professional speaker, focusing on “Mega Forces of Agriculture.” Dr. Kohn’s topics are designed to enlighten and help participants meet the daily challenges of modern agriculture while maintaining balance between family business, family life, and personal life, and included Population and Farming Trends, Finances & Credit, and the Golden Rules for Success in Business & Family.

“Each year I am amazed by the quality of the young, beginning and small farmers who attend this event”, says Mike Morton, CEO of Carolina Farm Credit.  “Their commitment to and passion for agriculture renews my faith that the future of North Carolina agriculture is in good hands.  By allowing opportunities to network and create relationships, we are hopeful that these young couples get much more from the weekend than the academic information provided.  I know that we at Carolina Farm Credit feel that building relationships with these young farmers helps our company create a link to agriculture’s future and allows us to stay connected to our customer base,” says Morton. [News release: Download Ag-Leadership_press_2008_no-couple.doc ]

FCS Financial awards $30,000 in scholarships

FCS Financial is pleased to announce the recipients of their 2008 Scholarships. Those receiving a $1,000 scholarship are Aaron Earley, Cameron; Adam Casner, Carrollton; Cayanne Schlueter, Carrollton; Rikki Thompson, Clinton; Chelsea Chamberlin, Cole Camp; Elizabeth Gayer, Columbia; Laura Mooney, Fredericktown; Alex Callow, Graham; Morgan Quinn, Hale; Mason  Ritter, Halfway; Dana White, Hardin; Kimberly Rohlfing, Hermann; Lauren Smithey, Lebanon; Elizabeth Miles, Leonard; Lillie Raasch, Liberty; Micah Parker, Lockwood; Ryne Watts, Macon; Rosalind Thiel, Marshall; Brandon Thiel, Marshall; Brett Jones, Mt. Vernon; Adam Coats, Mtn. Grove; Kate Crabill, Philadelphia; Kyra McNeal, Pleasant Hill; Ashton Starbuck, Queen City; Megan Westerhold, Rich Hill; Erica Bussell, Rogersville; Jamie Fitzgerald, Salisbury; Samuel Cope, Truxton; Brett Fitchpatrick, Wentworth; and William Kimbrough, West Plains

More than $150,000 has been distributed through the FCS Financial Scholarship Program since it was established by the FCS Financial Board of Directors in 2004.  The program is designed to encourage and support higher education for dependents of FCS Financial members. To qualify, applicants must be a graduating senior at a Missouri high school and a child or grandchild of an FCS Financial member. Additionally, they must attain a 2.5 or higher GPA, an ACT score of at least 26 or rank in the top 20 percent of their senior class. The scholarship applicants are then judged by a non-partisan committee on leadership roles, work experience, community involvement and essays.

Bob Bahl named President and CEO of AgCountry Farm Credit Services

Commitment to customers and the future of agriculture and Rural America will continue to be the top priority for AgCountry Farm Credit Services under new leadership. Bob Bahl, who has been with the Farm Credit System for 28 years, became the agricultural lender’s President and Chief Executive Officer effective April 1st.

Bahl was President and CEO of Farm Credit Services of Grand Forks for 14 years. He began his Farm Credit Services career as a tax specialist, and then moved to VP of Administration, Chief Credit Officer and Executive VP before being named CEO in 1993. Bahl has served as Chief Operating Officer for AgCountry Farm Credit Services since April 1, 2007, under the joint management agreement of the merger process between FCS of Grand Forks and AgCountry Farm Credit Services. The merger was final on January 1, 2008. 

“I am excited to be a part of a company with such a passion for agriculture, “said Bahl. “Our talented staff continues to provide a depth of knowledge that is second to none in the agriculture industry, while providing the best quality products and financial services available to our customers.” [News release: Download bob_bahl_president_and_ceo4.doc ]

First Pioneer stockholders re-elect Dickinson, Gilbert, Lyman, and Wells to the board

Stockholder-customers of First Pioneer Farm Credit, ACA, re-elected four northeastern agricultural producers to its board of directors.  As a customer-owned lender dedicated to supporting agriculture, commercial fishing and forest products, these four individuals will continue as part of the 13 member board of directors that provide governance for the cooperative.

• John Dickinson operates Ideal Dairy Farm in Hudson Falls, NY with his wife, Denise, and parents, Nate and Lorraine.  Together they own and manage a 700-cow dairy farm and crop 2,000 acres of farmland.
• Andy Gilbert, a dairy farmer from Potsdam, NY, owns and manages Adon Farms, in partnership with his brother, Tony.  Together, the partners run a 750-cow operation while raising their own replacements, forage, and corn grain.  They also haul their own milk.
• John Lyman III is executive vice president of The Lyman Farm, Inc. in Middlefield, CT, an eighth-generation 1,100-acre diverse family farm, including a 400-acre orchard; a pick-your-own operation; agritainment; a thriving farm market, and an expanding bakery and pie business.
• Lyle Wells operates Wells Homestead Acres in Riverhead, NY with his children Jessica, Matthew, and Logan.  The eleventh-generation operation produces 85 acres of vegetables and cut flowers for sale through a variety of wholesale brokers into local supermarkets, restaurants, and institutions.  The family also markets directly to local farm stands.

“On behalf of the entire First Pioneer family of customers, directors, and employees, I congratulate these outstanding individuals on their re-election,” First Pioneer President and CEO Bill Lipinski said.  “All are proven leaders in their industries and dedicated to keeping First Pioneer at the forefront of successful companies serving Northeast agriculture, commercial fishing, and the forest products industry.” [News release: Download press_release_director_election_results_2008.doc ]

CoBank donates $2,500 to Leadership Hendricks County

eadership Hendricks County has received a $2,500 check from CoBank on behalf of Kevin Still, a director on the cooperative bank’s board. Still is also the CEO and treasurer of Co-Alliance LLP, a Danville-based farm supply, energy, and grain and swine marketing partnership of Midland Co-op, Inc., IMPACT Co-op, Inc., Laporte County Coop, Inc., and Frontier Co-op, Inc.

Since 1993, Leadership Hendricks County has given citizens the background and inside information they need to take on effective leadership roles in the local community. The donation will go toward helping the organization reach a broader and more diverse group of potential leaders. Money will be used to expand access to materials, speakers and other opportunities.

Leadership Hendricks County receives the gift as part of CoBank’s corporate giving program, which allows employees and board members to direct bank donations to their choice of nonprofit organizations and programs. Through the program, CoBank donated more than $1 million last year to benefit local communities where its employees and directors live and work. [News release: Download still_lhc.pdf ]

CoBank donates $2,500 to Indiana Agricultural Leadership Institute

The Indiana Agricultural Leadership Institute (IALI) has received a $2,500 check from CoBank on behalf of Kevin Still, a director on the cooperative bank’s board. Still is also the CEO and treasurer of Co-Alliance LLP, a Danville-based farm supply, energy, and grain and swine marketing partnership of Midland Co-op, Inc., IMPACT Coop, Inc., Laporte County Co-op, Inc., and Frontier Co-op, Inc.

The IALI was founded in 1983 to facilitate communication and create networks within Indiana’s agricultural industry and build support among business, industry, production, education and government. The money will go toward supporting IALI’s training program, helping the institute build strong leadership skills and encouraging the public dialogue.

“I strongly support CoBank’s philosophy of giving back to the communities in which we operate,” Still said. “I’m particularly proud that the bank is underwriting IALI and its efforts to promote Indiana’s agricultural industry.” [News release: Download still_iali.pdf ]

AgCredit of South Texas distributes patronage to customers

AgCredit of South Texas, ACA recently distributed $737,475 in patronage payments to its customers. The patronage refund effectively reduces the interest rate paid by borrowers last year by 64 basis points, or 0.64 percent.

This is the second consecutive year that AgCredit of South Texas has returned a portion of its annual earnings to its borrowers. With this latest patronage refund, the rural lender has distributed more than $1.58 million in patronage — nearly half of its net income — to its customers during the past two years.

“It is a great pleasure to share our earnings with our borrower-stockholders when we do well, which we did last year,” said Larry Wade, AgCredit of South Texas chief executive officer. “Patronage payments are an important benefit of doing business with a cooperative.”

ArborOne Poll Reveals 40% of Respondents Likely to Buy in Rural South Carolina

ArborOne Financial announced new research which shows that 40% of respondents would consider buying a home in rural South Carolina. An additional 33% remained undecided. Most respondents were active executives and professionals and had a college education or higher. The poll included current South Carolina residents, as well as subjects from the Northeast, Florida, and nearby cities of Charlotte, NC; Atlanta, GA; Knoxville, TN; Savannah, GA; and Raleigh/Durham, NC.

And while many home communities in nearby states like Florida are experiencing the strain of foreclosure, South Carolina home loans remain an attainable goal for many buyers looking to relocate, retire, or escape. And with ArborOne South Carolina mortgage brokers, the risk of a subprime debacle is not even an option.

"We do not offer subprime mortgages," says Jack Shuler, President and CEO of ArborOne Financial. "And that's kept us afloat when many other South Carolina mortgage companies have not. We don't tease our customers with introductory rates, we want them to qualify for what their credit deserves, and be rewarded with the hard work they've put in to their investments." [News release]

Holt named president and CEO of Farm Credit of Central Florida

Reginald T. Holt has been named president and CEO of Farm Credit of Central Florida. He joined Farm Credit in 1982 serving as branch manager in Swan Quarter, N.C. Since 1977 he has been director of agribusiness lending with the Farm Credit of Central Florida. [Lakeland Ledger]

AgriLand distributes $3.9 million in patronage to customers

AgriLand Farm Credit, ACA recently reported outstanding 2007 financial results, highlighted by strong earnings of nearly $4.8 million and a hefty patronage refund. As a result of the strong earnings last year, AgriLand achieved an 11.5 percent return on average stockholders’ equity and will return $3.9 million in earnings to customers in the form of patronage.

The AgriLand Farm Credit Board of Directors approved the patronage distribution, which consists of $.7 million in cash and $3.2 million in allocated equities scheduled for disbursement in April.

"Our mission is to enhance the economic health of agriculture and rural America communities through constructive financing of their needs.  We accomplish this with quality service and competitive interest rates.  Our patronage program is an additional benefit to our customers. “, said AgriLand Chief Executive Officer Roger Brist.

News release: Download press_release_2007_agriland_results.doc

First Pioneer promotes senior staff members

At a recent Meeting, the First Pioneer Board promoted the following veteran leaders of the Northeast’s largest farm lending organization:

• David Boone is named Executive Vice President
• Steve Rickenbacher is named Senior Vice President
• Bob Smith is named Senior Vice President

CEO William J. Lipinski, who recommended the new titles to the Board, comments “I am proud to have Dave Boone, Steve Rickenbacher, and Bob Smith as part of my leadership team here at First Pioneer.  They are all highly skilled veterans who have demonstrated their ability to get things done many times over.  Each is committed to First Pioneer and its 8,500 customer-owners.”

News release: Download press_release_officer_promotions_2.doc

AgTexas returns $2 Million to customers as patronage

AgTexas, FCS recently returned $2 million in earnings to its borrowers, following a year of outstanding growth. The amount was distributed as a cash patronage and was based on the association’s financial performance in 2007.

This latest patronage payment reduced AgTexas customers’ average interest rate by 58 basis points in 2007, and highlighted the co-op’s solid 2007 financial results. The cooperative reported net year-end loan volume of $416 million at Dec. 31, 2007, a 39.1 percent increase from Dec. 31, 2006. Net income of $4.53 million in 2007 was up compared to the $4.34 million reported at Dec. 31, 2006.

“We had another successful year during 2007,” said Mitchell Harris, AgTexas, FCS, chief executive officer. “Our new loan growth exceeded our goals, which in turn, meant more earnings to continue a strong patronage program. We will continually strive to increase growth, enhance financial stability and expand patronage in the years to come.”

FLBA of South Alabama to distribute $3.2 million to borrowers

The Federal Land Bank Association of South Alabama, FLCA  will distribute $3.2 million in cash patronage to its borrowers, based on the FLBA’s financial performance in 2007.

“We are pleased to continue the long history of sharing our financial success with our stockholders,” said Thomas Dozier, chairman of the board of directors. “This $3.2 million cash refund effectively lowers our stockholders’ interest rate for the year by approximately 65 basis points, or 0.65 percent, proving once again that it pays to do business with the Federal Land Bank.”

This is the tenth year that the FLBA of South Alabama has declared a dividend or patronage payment to its customers. With this year’s distribution, the lending cooperative has returned more than $24 million in stock refunds, dividends and patronage to stockholders since 1996.

AgCarolina Financial to issue patronage checks

In the next few weeks, customers of AgCarolina Financial will receive patronage refund checks for 2007, it was announced this week by Gene Charville, President. The patronage refund for 2007 totaled $7.2 million resulting in an average interest rate discount to the cooperative’s customers of .92%. 

“As a cooperative, we can return the profits of AgCarolina Financial’s successful operations to its customers.  This distribution reflects the association’s continued commitment to share its financial success with our loyal customers,” said Dick Tunnell, Chairman of the AgCarolina Financial Board.  He continued, “The association’s financial strength and stability have enabled the association to issue patronage refunds for the past twenty years.” Since 1988, AgCarolina Financial has returned more than $141 million to its member-borrowers through patronage refunds and retirements of allocated surplus. 

“When we distribute our profits to our borrowers, it reduces their effective cost of borrowing,” Gene Charville stated, “and it proves that there are distinct financial benefits in doing business on a cooperative basis.” [News release: Download 2007Patronage.doc ]

Capital Farm Credit customers receive nearly $19 million cash dividend

Capital Farm Credit, Texas' largest cooperatively owned rural lender, distributed more than 13,000 checks totaling $18.9 million in cash to its members. [San Antonio Business Journal]

Officials with the Bryan, Texas-based lender distributed the funds as part of its cash patronage dividend. Capital Farm Credit also allocated another $43.5 million of the co-op's earnings for member for a potential distribution in the future.

"We have an advantage as a cooperative lender, because our borrowers are also our stockholders. That means they are the ones who benefit when we do well, and we are pleased to be returning almost all of our 2007 earnings to them," Capital Farm Credit CEO Ben Novosad says.

"This cash patronage effectively reduced the interest rate paid by our borrowers in 2007 by an average of 65 basis points, or 0.65 percent," he says.

Capital Farm Credit experienced double-digit growth throughout 2007, ending the year with an 18 percent growth in loan volume over the previous year and a record $65 million in net income. The lender's loan volume exceeded $3.2 billion.