Northwest Farm Credit Earnings Fall

Though loan volume is up, earnings are down at Northwest Farm Credit Services.

The Northwest’s largest agricultural lender announced Friday that its third-quarter earnings are $12.7 million, from income of $31.7 million. Earnings are down from $13.6 million out of income of $31.6 million a year ago. “From the standpoint of the earnings, it’s a reflection of the decreased spread in what you get on loans and the competitive interest rate,” said Jay Penick, president and chief executive officer.

The spread has narrowed in the last year because of competition from the regional and community banks in the Northwest, Penick said.

Still, he was pleased with company performance, noting that non-performing loans owned and serviced had dropped to 1.9 percent of the portfolio as of Sept. 30, down from 2.5 percent for the first nine months of 1996.

Loan volume is up for the association. Loans made during the first nine months increased to $1.9 billion, from $1.5 billion a year ago.

Earnings for the first nine months are $38.8 million, down from $42.6 million a year ago and Penick said he doesn’t expect the decline in annual earnings to change by the end of the year.

“For most of our producers, the 1997 production year has been good,” Penick said. “As a result, we are very pleased with the continued strong performance of our organization. This strong performance allows us to work with producers in commodities where prices are lower.”

Northwest Farm Credit Services is a farmer-owned association which provides financing and related services to homeowners and agricultural interests in Washington, Idaho, Montana, Oregon and Alaska.

Sacramento-based Ag America Farm Credit Bank is Northwest Farm Credit Services source of money.

, DataTimes