Non-interest expense was $158.4 million for the nine months ended September 30, 2024, an increase of $17.8 million, or 12.6 percent, compared to the same period of the prior year. The increase was mainly due to expected increases in loan servicing fees related to expansion in AgriBank’s asset pool programs in the second half of 2023 and continuing into 2024.

Loan Portfolio

Total loans were $159.0 billion at September 30, 2024, an increase of $10.3 billion, or 6.9 percent, compared to December 31, 2023. This increase was primarily attributable to wholesale loan growth.

AgriBank’s credit quality reflects the overall financial strength of District Associations and their underlying portfolios of retail loans. AgriBank’s portfolio was composed of 99.4 percent acceptable loans at September 30, 2024, and December 31, 2023. Loans classified as acceptable represent the highest-quality assets. The credit quality of AgriBank’s retail loan portfolio decreased slightly to 96.0 percent classified as acceptable at September 30, 2024, compared to 96.2 percent acceptable at December 31, 2023.

Agricultural Conditions

The U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) updated its 2024 forecast of the U.S. aggregate farm income and financial conditions on September 5, 2024. The release also converted the 2023 forecasts to estimates. The 2023 U.S. net farm income (NFI) estimate of $146.5 billion was $9.4 billion below the previous early 2024 forecast due to higher than forecast expenses, which more than offset higher than forecast cash receipts for crops and animals and animal products. USDA-ERS estimates that 2023 NFI decreased by $35.6 billion, or 19.5 percent, from the 2022 level in nominal terms due to declining cash receipts and rising expenses. While NFI decreased in 2023, it followed the record-high 2022 level. When adjusting for inflation, the 2023 U.S. NFI estimate was still 21.1 percent ($26.1 billion) above the ten-year average level.

Many factors, including weather, trade, government, and monetary policy, global agricultural production levels, and pathogenic outbreaks in livestock and poultry, may keep agriculture market volatility elevated for the next few years. Implementation of cost-saving technologies, marketing methods, and risk management strategies will continue to cause a wide range of results among the respective agricultural producers.

Capital Resources and Liquidity

Total capital remained strong at $9.2 billion as of September 30, 2024, an increase of $586.1 million compared to December 31, 2023. The increase was driven primarily by AgriBank’s net income and capital stock issuances. Offsetting these were cash patronage declared, consistent with AgriBank’s capital plan and the redemption of $250 million of perpetual preferred stock. AgriBank exceeded all regulatory capital minimum requirements, including additional regulatory buffers.

Through effectively leveraging existing District capital and in supporting the achievement of AgriBank and Associations’ business goals through the increased use of pool programs, AgriBank redeemed all its outstanding shares of preferred stock on January 1, 2024.

Cash and investments totaled $25.3 billion and $25.5 billion at September 30, 2024, and December 31, 2023, respectively. AgriBank’s end-of-the-period liquidity position represented 155 days coverage of maturing debt obligations, which supports operational demands, and was well above the 90-day minimum established by AgriBank’s regulator.

About AgriBank

AgriBank is part of the customer-owned, nationwide Farm Credit System. Under Farm Credit’s cooperative structure, AgriBank is primarily owned by local Farm Credit Associations, which provide financial products and services to rural communities and agriculture. AgriBank obtains funds and provides funding and financial solutions to those Associations. AgriBank and those Associations compose the AgriBank District. The District covers a 15-state area stretching from Wyoming to Ohio and Minnesota to Arkansas. For more information, visit www.AgriBank.com.

Forward-Looking Statements

Any forward-looking statements 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 about these risks and uncertainties is contained in AgriBank’s annual report, which is available approximately 75 days following the end of the year. AgriBank undertakes no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE AgriBank