Farm Credit Services of America, a financial cooperative with more than 88,000 customers and more than $16 billion in assets, last week announced financial results for calendar year 2010. And they are very good.
Net income for 2010 was $419.1 million compared to $229.7 million for 2009, reflecting an increase of 82.4%. Total loan volume increased 15.1% to $15.5 billion from $13.5 billion in 2009. Member's equity increased 13.8% to $2.5 billion after recording a liability for a $110 million cash-back dividend payment to customer-owners. Member's equity was $2.2 billion at the end of 2009.
The increase in net income was due to new business, a decrease in provisions for loan losses, a one-time refund of Farm Credit insurance fund premiums paid in prior years, and a reduction in the insurance fund premium rate. In addition, an increase in patronage paid by AgriBank Farm Credit Bank, and a decrease in tax expense contributed to the increase in 2010 net income.
Cash-back dividends and lower, competitive interest rates
"Our success is the result of ongoing efforts to create an efficient organization that provides cash-back dividends and competitive interest rates in order to fulfill our mission to our customer-owners," says Doug Stark, president and CEO. "These financial successes enable us to continue to make investments in the future to better serve agriculture in the long term," he adds.
FCSAmerica's financial results and continued strength enabled a $110 million cash-back dividend distribution to its customer-owners under FCSAmerica's 2010 patronage program, more than double the 2009 amount. This is the seventh consecutive year of the patronage program, with cash-back dividend distributions since 2004 totaling $425 million. The FCSAmerica board of directors once again approved a patronage program for 2011, the eighth consecutive year. The 2011 cash-back dividends for eligible customers will be determined in December 2011.
Over 24,000 customer loans were converted to lower rates
In addition to cash-back dividends, more than 24,000 customer loans were converted to lower rates in 2010, reducing total customer interest payments by about $44 million in the first year the new rates are in effect. Stark adds, "Our ability to offer programs like these, along with cash-back dividends, distinguishes our cooperative as a valued financial partner compared to other lenders."
Farm Credit Services of America is a farmer-owned cooperative lender that helps finance the growth of rural America, including the special needs of young and beginning producers. With more than 88,000 customers and assets of more than $16 billion, FCSAmerica is one of the region's leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in Iowa, Nebraska, South Dakota and Wyoming. Learn more at www.fcsamerica.com.