Category: News

Do you know an individual or group of individuals whose leadership and vision is changing the future of agriculture and rural America for the better? If so, we want to hear from you! We’re searching for 100 leaders who are positively shaping what is next for rural communities and agriculture.

Whether the leader is a “farm kid” who speaks to youth in urban areas about the importance of agriculture; a business leader respected for commitment to their community and the thriving future of rural America; an agriculture educator who may have inspired thousands throughout the years; or a farmer or rancher dedicated to progress and innovation on their farm or ranch, we invite you to help us identify these dynamic visionaries. Please consider submitting a nomination today.

Following your nomination, a panel of experts on rural matters, including Farm Credit leaders and representatives from around the agriculture industry, will evaluate and help select the top 100 honorees. We will announce the Farm Credit 100 Fresh Perspectives honorees in March 2016.

Farm Credit 100 Fresh Perspectives honorees will have the opportunity to share their stories and inspire with their vision throughout the Farm Credit centennial year in 2016 and beyond. Additionally, ten distinguished Farm Credit 100 Fresh Perspectives honorees — one from each nomination category — will receive a $10,000 award to help further their contributions to thriving rural communities and agriculture. These ten honorees and a guest also will be invited to Washington, D.C. to participate in a special Farm Credit recognition event in 2016. Nominations will be accepted through December 18, 2015. Please see the Farm Credit 100 Fresh Perspectives official rules for further details.

NOMINATE A LEADER

Seven of California’s largest agricultural lenders are once again joining forces to alleviate hunger in drought-stricken farm communities throughout the state.

California’s six Farm Credit associations – American AgCredit, Farm Credit Services of Colusa-Glenn, Farm Credit West, Fresno Madera Farm Credit, Golden State Farm Credit and Yosemite Farm Credit – have pledged $50,000 to rural areas hurt by the historic drought, which has idled hundreds of thousands of acres of farmland and left many farm workers unemployed. Denver-based CoBank, which finances agricultural cooperatives and other agribusinesses throughout the country, including in California, has matched that contribution with an additional $50,000.

The combined $100,000 will be distributed to 18 California food banks. The contribution follows a similar joint contribution made by the lenders in 2014.

“California’s agricultural sector is strategically important to the state and to our nation as a whole,” said   Robert B. Engel, chief executive officer of CoBank. “Farm Credit is committed to supporting this vital industry in good times and bad, not only with dependable credit but with other forms of assistance as well. We hope this contribution will make a meaningful difference for farm workers and their families, and we appreciate the important work that food banks are performing to help them through the drought crisis.”

“One out of three children in the Central Valley goes hungry every day, and the state’s drought conditions have only worsened the problem,” said Andrew Souza, president and CEO of Fresno-based Community Food Bank, one of the food banks that will receive funds from the Farm Credit contribution. “It is no longer just the poor and the homeless who are hungry; working families are also struggling to make ends meet. We are so grateful to CoBank and Farm Credit for recognizing the critical nature of this issue and stepping up to make a difference.”

The Farm Credit System is a nationwide network of banks and lending associations that provide loans, leases and other financial services to agriculture and other rural industries. Farm Credit institutions are cooperatively owned by the farmers, ranchers, growers, cooperatives and other borrowers they serve, and governed by boards elected by their customer-owners. CoBank and the six Farm Credit associations serving California finance every sector of agriculture in the state, including citrus, nuts, vegetables, dairy, cotton, rice, livestock, wine and timber.

WASHINGTON, D.C., June 10, 2015 – Northwest Farm Credit Services, a financial services cooperative that supports rural communities and agriculture, actively supports military veterans who are interested in agriculture. Northwest FCS recognizes that veterans are vital to the success of rural communities and supports veterans though beginning producer programs, career preparation workshops, internship and employment opportunities, partnerships with area colleges, and sponsorship of various programs.

Aaron Fisher, Snoqualmie, Wash. and William Hulings, Spokane, Wash. both veterans with an interest in agriculture, traveled with the Northwest FCS delegation to Washington, D.C. Fisher is an Army veteran and Northwest FCS intern studying Management Information Systems at Washington State University. Hulings is an intern with the Vets on the Farm program, in a partnership between Northwest FCS and the Spokane Conservation District. Hulings, a Navy veteran, is studying Greenhouse Technology at Spokane Community College. The group visited many congressional offices including those of Congresswoman DelBene, Congressman Newhouse, and Congresswoman McMorris Rodgers.

“It is our honor to support veterans like Aaron and Will as they explore agriculture through internships and employment,” said Mandy Minnick, Northwest FCS Washington President. “From helping share their stories to offering programs assisting them as they begin their careers in agriculture, Northwest Farm Credit Services thanks them for their service to our country and looks forward to working with them as they begin feeding the world.”

Nationally, Farm Credit hosted an event on Capitol Hill on June 2 to showcase the contributions of farmer veterans. The event was presented by Farm Credit in collaboration with the House and Senate Agriculture Committees.

Veterans possess the unique skills and character needed to strengthen rural communities, and food production offers purpose, opportunity, and physical and psychological benefits to those veterans. At a time when post-9/11 veterans are experiencing a 7.2 percent unemployment rate[2] (compared to the national average of 5.4 percent), agriculture can be a meaningful solution for veterans returning home and looking to provide for their families.

About Northwest Farm Credit Services

Northwest FCS is a customer-owned financial cooperative providing financing and related services to agricultural, forestry and fisheries business owners in Montana, Idaho, Oregon, Washington and Alaska. Northwest FCS provides approximately $13 billion in loans and is a member of the Farm Credit System, a nationwide network of borrower-owned lending institutions that provide approximately $217 billion in loans to rural America. For more information, go to northwestfcs.com.

A $10.0 million provision for loan losses recorded in the first quarter of 2015 largely offset the positive impacts of higher net interest income as well as increased prepayment income. The provision primarily reflected an increase in average loan volume. No provision was taken during the first quarter of 2014.

Net interest income for the quarter increased 2 percent to $315.3 million, from $309.0 million in the same period last year. Higher average loan volume was a key driver of the increase.

Average loan volume rose 5 percent in the first quarter to $80.6 billion, from $76.4 billion in the same period last year. The increase resulted from higher levels of borrowing from customers in a number of industries, including rural electric cooperatives, rural communications service providers, affiliated Farm Credit associations and food and agribusiness companies.

“We’re pleased with CoBank’s results for the quarter, which reflect solid growth in our portfolio across all of our operating segments,” said Robert B. Engel, CoBank’s chief executive officer. “Though market dynamics vary widely across the rural industries we serve, the strength of the CoBank value proposition is helping to drive broad-based growth throughout the business. We remain focused first and foremost on delivering value to our borrowers and providing them with an outstanding customer experience.”

At quarter-end, 1.76 percent of CoBank’s loans were classified as adverse assets compared to 1.84 percent at December 31, 2014. Nonaccrual loans decreased to $126.1 million at March 31, 2015 from $130.3 million at December 31, 2014. The bank’s allowance for credit losses totaled $607.1 million at quarter-end, or 1.51 percent of non-guaranteed loans when loans to Farm Credit associations are excluded.

“We continue to benefit from strong credit quality,” said David P. Burlage, chief financial officer. “The provision for loan losses taken during the quarter was driven primarily by growth in loan volume. In addition, our allowance for credit losses provides protection for the bank and its shareholders against losses embedded in our loan portfolio.”

Capital levels for CoBank remain well in excess of regulatory minimums. As of March 31, 2015, shareholders’ equity totaled $7.5 billion, and the bank’s permanent capital ratio was 15.6 percent, compared with the 7.0 percent minimum established by the Farm Credit Administration (FCA), the bank’s independent regulator. At quarter-end, the bank held approximately $24.1 billion in cash and investments and had 168 days of liquidity, which was in excess of FCA liquidity requirements.

Engel noted that, despite a strong first quarter, the bank is dealing with a number of market dynamics that have impacted and could continue to impact earnings and overall financial performance this year. “A strengthened dollar, continuing low interest rates and intense competition in the banking industry create a challenging earnings environment for CoBank,” Engel said. “In addition, the bank continues to make investments in people, technologies, public-private partnerships and other strategic initiatives that will position CoBank to generate returns over the long term. That said, the bank remains strong and well-positioned to continue serving as a dependable financial partner for its customers and fulfilling its mission in rural America.”
About CoBank

CoBank is a $106 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation’s rural economy. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

For more information about CoBank, visit the bank’s web site at www.cobank.com.

Increased earnings were primarily driven by 5.3 percent growth in the average loan portfolio compared to the same period of 2014. Total capital increased 2.5 percent during the quarter to $2.0 billion.

In 2015, $64.1 million has been returned to eligible members in the form of cash patronage, based on the association’s strong financial performance in 2014 and their business with the association.

“We are pleased with the continued strong financial performance of our association and our overall customer base,” said President and CEO Phil DiPofi.

“Drought conditions in select areas of the Northwest and lower prices for some commodities are causing concern in the agricultural industry,” DiPofi said. “However, most of our customers are well positioned to deal with these challenges.”

For more information about current market conditions, see Northwest FCS Industry Insights.

Northwest FCS is a customer-owned financial cooperative providing financing and related services to agricultural, forestry and fisheries business owners in Montana, Idaho, Oregon, Washington and Alaska. Northwest FCS provides approximately $13 billion in loans and is a member of the Farm Credit System, a nationwide network of borrower-owned lending institutions that provide approximately $217 billion in loans to rural America. For more information, go to northwestfcs.com.

As a farmer-owned cooperative, Fresno Madera Farm Credit operates for the benefit of its membership, and after meeting its financial requirements each year, returns a portion of profits to the members. “Fresno Madera Farm Credit’s patronage program is an important part of our value proposition as a member-owned financial institution,” stated Jeff Jue, Chairman of the Board.

During 2014, Fresno Madera Farm Credit posted a net profit of $15.8 million and managed to reduce operating expenses, and maintain strong credit quality. Since 2012, Fresno Madera Farm Credit has returned more than $16 million in cash patronage payments to its members. “Our sole focus on serving agriculture, along with our patronage program, go a long way in distinguishing Fresno Madera Farm Credit from other lenders,” indicated President and CEO Keith Hesterberg. “We are working hard to stay ahead of our members’ needs and to serve them by creating the best possible customer experience.”

Founded in 1917, FMFC is a privately-held, farmer-owned cooperative located in one of the most productive agricultural areas in the world. FMFC provides financial services to farmers, ranchers and agribusinesses that grow, process and market more than 350 crops in Fresno and Madera counties. FMFC’s Board and staff are committed to providing constructive, consistent and reliable credit to all eligible borrowers. With more than $1 billion in loan volume, FMFC continues to focus on providing credit to all eligible and creditworthy agricultural producers in Fresno and Madera Counties.

CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced the renewal of its “Sharing Success” charitable contribution program for 2015.

The bank’s board of directors has approved a commitment of $3 million for the program, which will be used to match donations by cooperative and other eligible customers to nonprofit organizations in their communities. The bank will match donations on a dollar-for-dollar basis, from a minimum of $1,000 up to a maximum of $5,000 per customer.

Since its launch in 2012, CoBank’s Sharing Success program has generated nearly $14 million for non-profit organizations throughout the country, predominantly in rural areas.

“Sharing Success has become one of the cornerstones of CoBank’s multifaceted corporate giving program,” said Robert B. Engel, CoBank’s chief executive officer. “It leverages the passion, expertise and local knowledge of our customers to identify and support the causes and programs that best address the unique needs of rural communities. We’re delighted our board has generously re-authorized this program and look forward to partnering with our customers to support people and communities in need around the country.”

CoBank will begin formally accepting applications for funding from customers on April 1. The program will run through October 31, 2015 or the point when the fund is exhausted, whichever comes first. Cooperatives and other eligible customers interested in participating should contact their CoBank relationship manager or visit www.cobank.com/about-cobank/sharing-success for an application and detailed program requirements.

Highlights:

• Net income was $163 million in 2014. Essentially all earnings were from core operations. This compares with $156 million the year before. Most of our growth in earnings was the result of fewer credit losses and continued asset growth.

• Average earning assets grew $398 million or 6.3% in 2014. This is the highest level of growth we have seen since 2009. Total assets were $7.5 billion at December 31, 2014.

• Asset quality improved substantially, with 97.1% nonadversely classified loans at year-end 2014 compared with 95.5% at the end of 2013. We were able to reduce our nonearning asset volume to $72 million at year-end 2014 compared to $96 million the year before.

• Retained earnings increased $100 million during 2014, ending the year at $1.2 billion. The stronger capital position enhances Farm Credit West’s overall financial strength.

These positive results contributed to the Farm Credit West Board’s decision to declare a cash patronage dividend of $57 million, which was paid to eligible customer-owners in February 2015.

Mark Littlefield, President and CEO of Farm Credit West said, “Farm Credit West’s success in 2014 reflects the resilience of California agriculture. While many of our customers were impacted by the worsening drought in California, we were pleased to be able to return $57 million in cash patronage dividends in February 2015 to help them persevere through yet another year of probable drought conditions.

The Board of Directors set the distribution at 75 basis points (0.75%) relative to the average volume of eligible loan and lease assets. Paid entirely in cash, this patronage payment translates to a 75 basis point reduction in customer-owner’s effective interest rate paid during 2014.

As owners of a financial cooperative, Farm Credit West’s customers have the opportunity to share in the financial success of the cooperative through patronage distributions. Farm Credit West’s patronage program has paid $362 million since the program’s inception in 2002. Customers can expect to receive their distribution in late February 2015.

“The ongoing success of Farm Credit West is attributed to our “customer comes first” model, growth in agricultural lending and on our continued focus on maintaining a highly efficient operation,” added Mark Littlefield, CEO of Farm Credit West. “Our patronage program reflects the financial strength of Farm Credit West and in-turn our customers receive a cash advantage.”

Farm Credit West is a lending institution of the Farm Credit System with branch offices in Bakersfield, Carpinteria, Dinuba, Hanford, Santa Maria, Templeton, Tulare, Ventura, Woodland and Yuba City. The corporate headquarters is located in Roseville and Capital Markets staff are located in Paso Robles. 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.

CoBank reported net income of $904.3 million for the year, up 6 percent from $856.5 million in 2013. The increase was driven primarily by higher net interest income. Net interest income increased 6 percent to $1.2 billion, driven by higher average loan volume as well as increased earnings from the bank’s balance sheet positioning. Average loan volume rose 7 percent to $76.6 billion.

“We’re delighted with CoBank’s business and financial performance in 2014,” said Robert B. Engel, CoBank’s chief executive officer. “The bank recorded its 15th consecutive year of growth in profitability on behalf of our customer-owners, an accomplishment matched by few if any other financial institutions in the world. Our credit quality remains strong, and our capital and liquidity levels remain solid. Most importantly, we continue to fulfill our mission of service to rural America.”

During the year, the bank saw higher loan volume from a range of rural industries, including agricultural cooperatives, food and agribusiness companies, electric distribution cooperatives, power supply customers, and communications service providers. The bank’s wholesale loans to its affiliated Farm Credit associations also increased due to heavier borrowing from their agricultural producer customers. “We are pleased that loan volume grew last year in the face of uncertain market conditions,” Engel said. “We continue to benefit from the diversification of our customer base, and the bank’s reputation for providing value and an exceptional customer experience.”

This month, the bank is distributing a record $467.5 million in total patronage, including $378.8 million in cash and $88.7 million in common stock. For most customers, that will represent 100 basis points of average qualifying loan volume during the past year, effectively lowering their overall net cost of debt capital from CoBank. “Strong, dependable patronage is an essential part of the value proposition we offer to our customers,” Engel said. “We’re delighted with the level of patronage our board has approved this year, and we trust that our customers also value this important benefit of doing business with a bank that they own.”

Strong credit quality led to a $15 million net reversal of a portion of the bank’s allowance for loan losses during the year, compared to no provision or reversal in 2013, which contributed to CoBank’s earnings performance. The bank’s allowance for credit losses totaled $596.8 million at year-end, or 1.54 percent of non-guaranteed loans when loans to Farm Credit associations are excluded. As of December 31, 2014, nonaccrual loans were $130.3 million, or 0.16 percent of total loans, compared to $147.8 million and 0.20 percent of total loans at year-end 2013. Adverse assets were 1.84 percent of total loans at year-end, compared to 0.71 percent at December 31, 2013. The increase in adverse assets was due to the downgrade of a wholesale loan to one of the bank’s affiliated associations, which resulted from a sudden significant increase in delinquencies in a discrete portion of that association’s retail loan portfolio. Nonetheless, CoBank does not currently anticipate any losses related to that association’s loans and has not made any provision for loan loss or recorded any allowance for credit loss related to any of its wholesale loans as a result of strong collateralization and other mitigating factors.

For the fourth quarter of 2014, average loan volume increased 8 percent, to $78.1 billion as compared to the fourth quarter of 2013. Net interest income also increased 8 percent, to $312.2 million. Net income for the quarter was $215.4 million, a decline of 5 percent from $227.6 million in the same period of 2013. CoBank recorded a $10.0 million provision for loan losses during the fourth quarter of 2014, compared to a $20.0 million reversal in the prior-year period. “Although profitability was impacted by loan loss estimates, the bank’s performance was solid during the quarter and reflected strong growth in loan demand from our customers,” said David P. Burlage, CoBank’s chief financial officer.

Capital and liquidity levels at the bank remain well in excess of regulatory minimums. As of December 31, 2014, shareholders’ equity totaled $7.4 billion, and the bank’s permanent capital ratio was 15.7 percent, compared with the 7.0 percent minimum established by the Farm Credit Administration (FCA), the bank’s independent regulator. At year end, the bank held approximately $26.2 billion in cash and investments. The bank had 172 days of liquidity at the end of 2014, compared with the 90-day FCA minimum.

Engel noted that despite CoBank’s strong performance in 2014, the bank continues to face a number of challenges, including intense competition from other banks and lenders for the business of its customers, the need for significant investment in people, processes and technologies to serve the needs of customers, and continued low interest rates that negatively impact returns on invested capital.
“Our board and executive management team believe strongly that the best strategy for CoBank is to remain focused on providing value to our customers – as both customers and owners – and on building the bank’s financial strength and stability for the long term,” Engel said. “We remain mindful of the enormous trust our customers place in CoBank and are deeply grateful that they choose us to serve as their financial partner.”

Customer Meetings and 2014 Earnings Webcast and Conference Call
CoBank will provide more information about its 2014 financial results at its ongoing series of regional customer meetings, which will take place in multiple cities around the country through April of 2015. Managers and directors of any CoBank borrower are invited to attend these meetings, as are representatives of all Farm Credit institutions. For complete details about the meeting program, please visit the bank’s meetings page at www.cobank.com/meetings.

In addition, the bank will hold its annual conference call and webcast at 1 p.m. Eastern Time on Wednesday, March 11. The 60-minute call will feature a presentation of 2014 financial highlights and Q&A with CoBank executives.

To join via phone, call 866-515-2911 and use passcode 86121995. To join via the Internet, click here or visit the “Newsroom & Financials” section of the CoBank web site.