Farm Credit West released its 2021 Annual Report highlighting the association’s ongoing commitment to serving the financial needs of farmers, ranchers, and agribusiness throughout California and Arizona. The association is reporting strong financial performance in 2021 with continued growth in net income, earning assets, and capital.
“The events of 2021 – and the year prior – provided key opportunities for our association to seek innovative solutions to achieve success while also finding new ways to be efficient and strengthen our relationships with customers. The ongoing commitment of our staff, the loyalty of our customers, and guidance by our Board of Directors all contributed to the association’s very strong financial performance last year.”
said Mark Littlefield, President, and CEO of Farm Credit West.
This strong performance provided the association with the foundation necessary for the Board of Directors to declare a cash patronage dividend equal to 125 basis points or 1.25% of the eligible customer-owners average loan balance. Core patronage of 1.00% was distributed this February with the second supplemental payment equal to 0.25% distributed in March. This was a direct result of Farm Credit West’s exceptional earnings and maintenance of a strong capital position in 2021.
As a member-owned cooperative, Farm Credit West has distributed over $1.186 billion in cash dividends since the patronage program’s inception in 2002. The varied geographic and commodity diversity of its activities in California and Arizona contributed to the strong earnings results in 2021. Below is a summary of the Association’s financial performance last year:
- Net income for 2021 was $326 million as compared to $296 million in 2020. Net income in 2021 was positively impacted by an increase in net interest income due to strong growth and performance stability in the loan portfolio.
- Earning assets grew to $12.8 billion at the end of 2021 from $11.9 billion at the end of 2020.
- Asset quality improved to 97% non-adversely classified loans at year-end 2021 compared with 95.6% at the end of 2020. Additionally, nonaccrual loans and other property owned decreased to $71 million at the end of 2021 compared to $100 million at the end of 2020.
- Total capital at the end of 2021 was $2.44 billion compared to $2.39 billion at the end of 2020.
- Farm Credit West’s primary capital ratio measurement is common equity tier 1 (CET1). The CET1 ratio was 13.8% at the end of 2021 compared to a CET1 ratio of 13.9% at the end of 2020. Both were well in excess of the regulatory capital requirements.