AgriBank shows robust first quarter 2024 performance

AgriBank, based in St. Paul, has announced its financial results for the first quarter of 2024, revealing robust profitability, credit quality, and solid liquidity and capital positions. The bank reported a net income of $211.7 million for the three months ended March 31, 2024. Its year-to-date return on assets (ROA) ratio was 49 basis points, slightly below the target of 50 basis points. The total loan portfolio maintained a high level of quality, with 99.5% of loans classified as acceptable as of March 31, 2024. Additionally, end-of-quarter liquidity stood at 165 days, well above regulatory requirements, while capital levels remained significantly above regulatory minimums and company targets.

Jeffrey Swanhorst, AgriBank’s Chief Executive Officer, emphasized the continued strong performance of the Farm Credit lenders supported by AgriBank. “The Farm Credit lenders we support continue to excel at meeting the needs of farmers, ranchers, and other rural customers, which translates into strong financial performance for AgriBank,” said Swanhorst. “We have begun the year just as we completed the last one—with strong profitability and credit quality, and capital and liquidity that are well above regulatory requirements. Borrowers have sound reasons to depend on Farm Credit.”

In terms of operations, AgriBank’s net interest income was $235.6 million for the first quarter of 2024, marking a 5.6% increase from the same period in 2023. This growth was primarily driven by higher interest rates and the expansion of the retail portfolio, although it was partially offset by decreased spread income on investment securities. Non-interest income rose to $28.6 million, a 7.5% increase from the same period in 2023, largely due to higher mineral income from increased gas and oil production. However, non-interest expenses also increased, totaling $51.5 million, up 13.4% from the same period in 2023, mainly due to higher loan servicing fees from the expansion of AgriBank’s asset pool programs.

AgriBank’s total loans amounted to $149.3 billion as of March 31, 2024, a 0.4% increase from December 31, 2023, driven primarily by wholesale loan growth. The credit quality of AgriBank’s loan portfolio remained high, with 99.5% of loans classified as acceptable, an improvement from 99.4% at the end of 2023. The credit quality of the retail loan portfolio also improved slightly, with 96.5% of loans classified as acceptable.

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The U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) forecasts a significant decline in net farm income (NFI) for 2024, projecting a nominal NFI of $116.1 billion, a 25.5% decrease from 2023. This decline is attributed to lower cash receipts and higher production costs. Despite this downturn, the farm sector balance sheet remains strong, with an expected 5.2% increase in total farm debt and a 4.7% increase in farm sector assets.

AgriBank’s total capital was $8.5 billion as of March 31, 2024, down $111.1 million from December 31, 2023. This decrease was driven by the redemption of AgriBank’s perpetual preferred stock and declared cash patronage. Cash and investments totaled $25.7 billion, with a liquidity position covering 165 days of maturing debt obligations, well above the regulatory minimum of 90 days. Despite challenging economic conditions, AgriBank’s strong financial performance in the first quarter of 2024 underscores its resilience and ability to support the agricultural sector.