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Spokane, Washington  Est. May 19, 1883
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Farm Credit Group Reports Hefty Profits

Grayden Jones Staff writer

Robust commodity prices and expanding loan volume helped Northwest Farm Credit Services sustain near-record profits in 1996.

The Northwest’s largest agricultural lender today will announce 1996 earnings of $57.7 million on interest and non-interest income of $126.7 million. That is slightly below the record earnings in 1995 of $59 million on income of $105.3 million.

Loans owned and serviced by Northwest Farm Credit rose 11 percent, from $2.33 billion at the close of 1995 to $2.6 billion on Dec. 31, 1996, officials said Monday.

“Our downsizing plan a couple years ago put us in solid position to be competitive and to segment our portfolio,” said Jay Penick, president and chief executive officer. “Our customers have really responded to those changes.”

Penick said the lender also capitalized on strong prices for most commodities, with the exception of cattle and potatoes. However, he warned that declining federal government supports means greater uncertainty in the future for growers and lenders.

Northwest Farm Credit is a farmer-owned association that makes loans to 19,000 borrowers and employs 415 people in Washington, Idaho, Montana, Oregon and Alaska. Later this year, it will move its headquarters from downtown to a new building on Sunset Hill.

The association’s source of funds, AgAmerica Farm Credit Bank, on Saturday will begin a joint management structure with Western Farm Credit Bank of Sacramento. AgAmerica will close its Spokane headquarters.

AgAmerica, which lends money to 62,000 farmers, ranchers and homeowners in nine states, reported earnings in 1996 of $127.2 million on net interest income of $296.3 million. That was down from earnings of $147 million in 1995 on interest income of $278.8 million.

The bank posted year-end loan volume of $7.05 billion in 1996, up from $6.64 billion the previous year.

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