AgriBank Reports First Quarter 2025 Financial Results
SOURCE AgriBank
Continued strong financial performance reflects model, Association success
ST. PAUL, Minn., May 9, 2025 /PRNewswire/ -- Today, St. Paul-based AgriBank announced financial results for the first quarter of 2025, with strong profitability, credit quality, and liquidity and capital.
Highlights:
- Profitability: Net income remained strong at $242.6 million for the three months ended March 31, 2025. AgriBank's year-to-date return on assets (ROA) ratio of 51 basis points was above the target of 50 basis points.
- Credit quality: Total loan portfolio credit quality remained strong, with 99.4 percent of loans classified as acceptable at March 31, 2025.
- Liquidity and capital: End-of-the-quarter liquidity was 160 days, well above the regulatory requirement. Capital also remained well above the regulatory minimums and company targets.
"Our strong financial performance in the first quarter of 2025 is a testament to the resilience and dedication of our team and the success of our Farm Credit Association-owners," said AgriBank CEO Jeffrey Swanhorst. "AgriBank and the Associations stand ready to support farmers, ranchers, and other Farm Credit borrowers navigate what we expect will be continued economic and market uncertainty and volatility, bolstered by the smart business practices of the producers themselves."
2025 Results of Operations
Net interest income was $269.6 million for the three months ended March 31, 2025, an increase of $34.0 million, or 14.4 percent, compared to the same period of the prior year. The increase was primarily driven by higher spread income and increased volume in AgriBank's wholesale loan portfolio. Additionally, the benefit of equity financing contributed slightly to the increase in net interest income. These factors were somewhat offset by decreased spread income on investment securities due to the mix of investment securities and reduced spreads on money market instruments.
Non-interest income was $29.0 million for the three months ended March 31, 2025, an increase of $415.0 thousand, or 1.4 percent, compared to the same period of the prior year, primarily related to an Allocated Insurance Reserve Accounts (AIRAs) distribution received from the Farm Credit System Insurance Corporation (FCSIC) during the first quarter of 2025. The increase in non-interest income from AIRAs was partially offset by a reduction in mineral income.
Non-interest expense was $55.1 million for the three months ended March 31, 2025, an increase of $3.6 million, or 7.0 percent, compared to the same period of the prior year. The increase was mainly due to dealer incentive expenses related to AgriBank's crop input financing portfolio.
Loan Portfolio
Total loans were $164.7 billion at March 31, 2025, a decrease of $7.3 million, compared to December 31, 2024. This decrease was primarily attributable to retail loan repayments, largely offset by wholesale loan growth.
AgriBank's credit quality reflects the overall financial strength of District Associations and their underlying portfolios of retail loans. AgriBank's portfolio was composed of 99.4 percent acceptable loans at March 31, 2025, and December 31, 2024. Loans classified as acceptable represent the highest-quality assets. The credit quality of AgriBank's retail loan portfolio decreased slightly to 95.1 percent classified as acceptable at March 31, 2025, compared to 95.7 percent acceptable at December 31, 2024.
Agricultural Conditions
On February 6, 2025, the U.S. Department of Agriculture's Economic Research Service released its initial forecast of the U.S. aggregate farm income and financial conditions for 2025 and updated its 2024 forecast. The revised 2024 net farm income forecast of $139.1 billion represented an $8.2 billion decline from the 2023 level, down 5.6 percent, and follows the $34.7 billion estimated decline that occurred in 2023 compared to the record-high 2022 estimated net farm income. Although net farm income is forecasted to decline for the second consecutive year, when adjusting for inflation, the 2024 net farm income forecast is $16.8 billion, or 13.3 percent, above the 10-year average (2014-2023) net farm income in 2025 dollars. The initial 2025 net farm income projection of $180.1 billion represents an increase of $41.0 billion, or 29.5 percent, from the revised 2024 net farm income forecast, and if realized, it would be the second-highest inflation-adjusted level in the past 50 years.
Many factors, including weather, trade, government, and monetary policy, global agricultural production levels, and pathogenic outbreaks in livestock and poultry, may keep the agriculture market volatility elevated. Implementation of cost-saving technologies, marketing methods, and risk management strategies will continue to cause a wide range of results among the respective agricultural producers.
Capital Resources and Liquidity
Total capital remained strong at $9.6 billion as of March 31, 2025, an increase of $88.5 million compared to December 31, 2024. The increase was driven primarily by AgriBank's net income, which was partially offset by cash patronage declared, consistent with AgriBank's capital plan. AgriBank exceeded all regulatory capital minimum requirements, including additional regulatory buffers.
Cash, cash equivalents, and investments totaled $25.8 billion and $25.1 billion at March 31, 2025, and December 31, 2024, respectively. AgriBank's end-of-the-period liquidity position represented 160 days coverage of maturing debt obligations, which supports operational demands, and was well above the 90-day minimum established by AgriBank's regulator.
About AgriBank
AgriBank is part of the customer-owned, nationwide Farm Credit System. Under Farm Credit's cooperative structure, AgriBank is primarily owned by local Farm Credit Associations, which provide financial products and services to rural communities and agriculture. AgriBank obtains funds and provides funding and financial solutions to those Associations. AgriBank and those Associations compose the AgriBank District. The District covers a 15-state area stretching from Wyoming to Ohio and Minnesota to Arkansas. For more information, visit www.AgriBank.com.
Forward-Looking Statements
Any forward-looking statements in this press release are based on current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from expectations due to a number of risks and uncertainties. More information about these risks and uncertainties is contained in AgriBank's annual report, which is available approximately 75 days following the end of the year. AgriBank undertakes no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
AGRIBANK, FCB | ||
STATEMENTS OF CONDITION INFORMATION | ||
(in thousands) | ||
March 31, | December 31, | |
2025 | 2024 | |
(unaudited) | ||
Loans | $164,651,687 | $164,659,006 |
Allowance for credit losses on loans | 38,061 | 39,641 |
Net loans | 164,613,626 | 164,619,365 |
Investment securities and other earning assets | 25,829,392 | 25,071,437 |
Accrued interest receivable | 1,724,881 | 1,815,644 |
Other assets | 454,620 | 424,514 |
Total assets | $192,622,519 | $191,930,960 |
Bonds and notes | $181,624,651 | $180,795,727 |
Accrued interest payable | 1,177,073 | 1,201,851 |
Other liabilities | 269,223 | 470,261 |
Total liabilities | $183,070,947 | $182,467,839 |
Shareholders' equity | $9,551,572 | $9,463,121 |
Total liabilities and shareholders' equity | $192,622,519 | $191,930,960 |
AGRIBANK, FCB | ||
STATEMENTS OF INCOME INFORMATION | ||
(in thousands) | ||
For the | ||
three months ended | ||
March 31, | ||
2025 | 2024 | |
(unaudited) | (unaudited) | |
Interest income | $1,914,034 | $1,801,828 |
Interest expense | 1,644,408 | 1,566,235 |
Net interest income | 269,626 | 235,593 |
Provision for credit losses | 1,000 | 1,000 |
Net interest income after provision for credit losses | 268,626 | 234,593 |
Non-interest income | 29,044 | 28,629 |
Non-interest expense | 55,087 | 51,503 |
Net income | $242,583 | $211,719 |
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