ST. PAUL, Minnesota.March 2, 2022 /PRNewswire/ — Today, St. PaulAgriBank-based AgriBank announced its financial results for the fourth quarter and full year of 2021, with strong profitability, credit quality, liquidity and capital.

Strong points:

  • Profitability: Net income remained strong at $765.2 million for the year ended December 31, 2021. AgriBank’s year-to-date return on assets (ROA) ratio of 57 basis points was above the target of 50 basis points.
  • Credit quality: The credit quality of the total loan portfolio was strong, with 98.3% of loans rated as acceptable at the December 31, 2021compared to 99.3% at December 31, 2020.
  • Liquidity and capital: Liquidity at the end of the quarter was 158 days, well above the regulatory requirement. Capital also remained well above regulatory minimums and corporate targets.

Cumulative operating results 2021

Net interest income was $779.8 million for the year ended December 31, 2021an augmentation of $65.4 million, or 9.2%, compared to the same period of the previous year. Net interest income increased primarily due to continued increases in wholesale and retail lending volumes.

Non-interest income was $145.5 million for the year ended December 31, 2021a decrease of $44.5 million, or 23.4%, compared to the same period of the previous year. The decrease is mainly due to lower conversion costs, which were significantly high in 2020, partially offset by the increase in mining revenues.

Fourth quarter 2021 operating results

Net interest income was $2060.4 million for the quarter ended December 31, 2021an augmentation of $400.2 million, or 24.2%, compared to the same period of the previous year. These changes were primarily related to higher loan volumes and lower interest expense due to low interest rates, partially offset by lower interest income on our investment portfolio.

loan portfolio

Total loans were $1220.0 billion to December 31, 2021an augmentation of $120.2 billion, or 11.1%, compared to December 31, 2020. This increase is mainly attributable to the increase in loans to wholesalers and, to a lesser extent, to the increase in retail production and in medium-term loans and to agribusinesses. Throughout 2021, the District Associations saw lending growth in the mortgage, production and mid-term, and agribusiness sectors, contributing to our wholesale lending growth.

AgriBank’s credit quality reflects the overall financial strength of the District Associations and their underlying retail loan portfolios. AgriBank’s portfolio consisted of 98.3% of loans classified as acceptable at the December 31, 2021compared to 99.3% at December 31, 2020. Loans classified as acceptable represent the highest quality assets. The credit quality of AgriBank’s retail loan portfolio increased to 95.4%, rated as acceptable at December 31, 2021compared to 94.0 percent acceptable at December 31, 2020. The improvement in the acceptable percentage of the retail portfolio was positively influenced by crowd buying in 2021. In addition, the continued high net farm income and the strength of commodity prices in specific sectors contributed to overall improvement.

Covid-19 pandemic

As national public health measures have been implemented to limit the spread of the coronavirus, including the availability of vaccines, many restrictions have been lifted in the United States. While the emergence of variants of COVID-19 has negatively impacted parts of the United States, the overall economy continues to recover and the outlook is positive for many sectors, including agriculture.

Certain AgriBank employees, at their discretion and in compliance with established health and safety measures, periodically voluntarily returned to the office. In January 2022, AgriBank has terminated the activation of its business continuity protocols, which had been in place since the start of the COVID-19 pandemic. Collectively, AgriBank’s business continuity responses and ongoing measures have enabled it to continue to fulfill its mission.

Agricultural conditions

The U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) has released its first forecast of overall U.S. farm income and financial conditions for 2022. Net farm income (NFI) for 2022 is expected to decline by a $5.4 billionor 4.5%, compared to the revised version $119.1 billion NFI forecast 2021. If achieved at $113.7 billionthe NFI projection for 2022 would be the third highest on record in nominal dollars, behind only 2021 and 2013. After adjusting for inflation, the NFI projection for 2022 equals a $9.7 billion decline, or 7.9%, from the revised 2021 forecast. Despite the projected decline for 2022, the NFI forecast would still be higher than $10 billion higher than the actual 10-year average NFI if the 2021 and 2022 forecasts materialize.

The outlook for U.S. agriculture remains positive despite the challenges of rising expenses, supply chain disruptions and labor issues facing many sectors. However, weather conditions, trade, government policy, global agricultural production levels and the potential for pathogen outbreaks in livestock and poultry could keep agricultural market volatility elevated over the next twelve months. The adoption of cost-effective technologies, marketing methods and risk management strategies will continue to result in a wide range of outcomes among respective growers.

Capital resources and liquidity

Total capital remained very strong at $70.0 billion au December 31, 2021an augmentation of $4260.4 million compared to December 31, 2020. This increase is mainly explained by net profit and net share issues, which were significantly reduced by reported cash rebates, in line with AgriBank’s capital plan. AgriBank exceeded all minimum regulatory capital requirements, including additional regulatory buffers.

Cash and investments totaled $190.7 billion and $190.8 billion to December 31, 2021 and 2020, respectively. AgriBank’s liquidity position at the end of the period represented a 158-day coverage of maturing debt securities, which meets operational requirements, and was well above the 90-day minimum set by AgriBank’s regulator.

About AgriBank

AgriBank is part of the national agricultural credit system owned by the customer. Under the cooperative structure of Farm Credit, AgriBank is primarily owned by local agricultural credit associations, which provide financial products and services to rural communities and agriculture. AgriBank obtains funds and provides financing and financial solutions to these associations. The AgriBank District covers an area of ​​15 states spanning from Wyoming for Ohio and Minnesota for Arkansas. For more information, please visit www.AgriBank.com.

Forward-looking statements

All forward-looking statements contained 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 on these risks and uncertainties is contained in AgriBank’s annual report, which is available no later than 75 days after the end of the year. AgriBank undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

AGRIBANQUE, FCB

CONDITION STATEMENT INFORMATION

(in thousands)





The 31st of December,

The 31st of December,


2021

2020


(Unaudited)


Loans

$121,994,112

$109,785,695

Allowance for loan losses

37,558

39,850

Net loans

121 956 554

109,745,845

Investment securities, federal funds and cash

19,697,622

19,847,121

Accrued interest receivable

519 172

495,635

other assets

243 248

219,533

Total assets

$142,416,596

$130,308,134




Bonds and notes

$134,702,607

$123,029,564

Accrued interest payable

260 462

273,685

Other liabilities

447,612

425,368

Total responsibilities

$135,410,681

$123,728,617




Equity

$7,005,915

$6,579,517

Total liabilities and equity

$142,416,596

$130,308,134




AGRIBANQUE, FCB

INCOME STATEMENT INFORMATION

(in thousands)







For the

For the


three months completed

twelve months ended


The 31st of December,

The 31st of December,


2021

2020

2021

2020


(Unaudited)

(Unaudited)

(Unaudited)


interest income

$503,032

$488,622

$1,967,029

$2,324,599

Interest expense

296,639

322 453

1,187,241

1,610,238

Net interest income

206,393

166 169

779 788

714,361

Provision for credit losses

1,000

2,000

1,000

11,000

Net interest income after provision for credit losses

205,393

164 169

778 788

703 361

Non-interest income

42,236

37,349

145,548

190,088

Non-interest charges

41,156

72,076

159 125

184 270

Net revenue

$206,473

$129,442

$765,211

$709,179






SOURCE AgriBank