Continued strong financial performance reflects AgriBank business model, Association success
ST. PAUL, Minn., Aug. 8, 2025 /PRNewswire/ -- Today, St. Paul -based AgriBank announced financial results for the second quarter of 2025, with strong profitability, credit quality, and liquidity and capital.
Highlights:
- Profitability: Net income remained strong at $470.0 million for the six months ended June 30, 2025. AgriBank's year-to-date return on assets (ROA) ratio of 49 basis points was just below the target of 50 basis points.
- Credit quality: Total loan portfolio credit quality remained strong, with 99.3 percent of loans classified as acceptable at June 30, 2025.
- Liquidity and capital: End-of-the-quarter liquidity was 160 days, well above the regulatory requirement. Capital also remained well above the regulatory minimums and company targets.
"Amid ongoing economic uncertainty and market volatility, AgriBank and our Farm Credit Association-owners remain trusted allies for farmers, ranchers and other Farm Credit borrowers," said AgriBank CEO Jeffrey Swanhorst. "Our strong financial results in the second quarter reflect the strength and resilience of the agricultural producers who depend on us for the reliable, consistent financial solutions they need to grow and prosper."
2025 Results of Operations
Net interest income was $548.9 million for the six months ended June 30, 2025, an increase of $87.6 million, or 19.0 percent, compared to the same period of the prior year. The increase was primarily driven by higher spread income and increased volume in AgriBank's wholesale loan portfolio. Higher loan volume in asset pool portfolios further contributed to the increase in net interest income. These factors were somewhat offset by decreased spread income on investment securities due to the mix of investment securities. Additionally, the benefit of equity financing contributed slightly to the increase in net interest income.
Non-interest income was $55.0 million for the six months ended June 30, 2025, a decrease of $2.3 million, or 4.1 percent, compared to the same period of the prior year, primarily due to the reduction in mineral income related to lower oil prices and production during the first half of 2025. This decrease was partially offset by increases in loan servicing fees due to marginally higher conversion and commitment fees generating additional income during the six months ended June 30, 2025, compared to the same period of the prior year.
Non-interest expense was $112.8 million for the six months ended June 30, 2025, an increase of $8.8 million, or 8.5 percent, compared to the same period of the prior year. The increase was mainly due to dealer incentive expenses related to AgriBank's crop input financing portfolio. Contractor fees also added to increased operating expense related to additional resources for technology projects during the first half of 2025.
Loan Portfolio
Total loans were $169.3 billion at June 30, 2025, an increase of $4.6 billion, compared to December 31, 2024. This increase was primarily attributable to wholesale loan growth and increases in retail loans, driven by real estate mortgage loans related to an asset pool program purchase during the second quarter of 2025.
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 99.3 percent acceptable loans at June 30, 2025, compared to 99.4 percent at December 31, 2024. Loans classified as acceptable represent the highest-quality assets. The credit quality of AgriBank's retail loan portfolio decreased slightly to 95.1 percent classified as acceptable at June 30, 2025, compared to 95.7 percent acceptable at December 31, 2024.
Agricultural Conditions
On February 6, 2025, the U.S. Department of Agriculture's Economic Research Service (USDA-ERS) released its initial forecast of the U.S. aggregate farm income and financial conditions for 2025 and updated its 2024 forecast. The revised 2024 net farm income forecast of $139.1 billion represented an $8.2 billion decline from the 2023 level, down 5.6 percent, and follows the $34.7 billion estimated decline that occurred in 2023 compared to the record-high 2022 estimated net farm income. Although net farm income is forecasted to decline for the second consecutive year, when adjusting for inflation, the 2024 net farm income forecast is $16.8 billion, or 13.3 percent, above the 10-year average (2014-2023) net farm income in 2025 dollars. The initial 2025 net farm income projection of $180.1 billion represents an increase of $41.0 billion, or 29.5 percent, from the revised 2024 net farm income forecast, and if realized, it would be the second-highest inflation-adjusted level in the past 50 years.
Many factors, including weather, trade, government and monetary policy, global agricultural production levels, and pathogenic outbreaks in livestock and poultry, may keep the agriculture market volatility elevated. 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 $9.9 billion as of June 30, 2025, an increase of $468.3 million compared to December 31, 2024. The increase was driven primarily by AgriBank's net income and the issuance of capital stock, which were partially offset by cash patronage declared, consistent with AgriBank's capital plan. AgriBank exceeded all regulatory capital minimum requirements, including additional regulatory buffers.
Cash, cash equivalents, and investments totaled $26.7 billion and $25.1 billion at June 30, 2025, and December 31, 2024, respectively. AgriBank's end-of-the-period liquidity position represented 160 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.
AGRIBANK, FCB | ||
STATEMENTS OF CONDITION INFORMATION | ||
(in thousands) | ||
June 30, | December 31, | |
2025 | 2024 | |
(unaudited) | ||
Loans | $169,301,700 | $164,659,006 |
Allowance for credit losses on loans | 56,297 | 39,641 |
Net loans | 169,245,403 | 164,619,365 |
Investment securities and other earning assets | 26,667,546 | 25,071,437 |
Accrued interest receivable | 1,847,223 | 1,815,644 |
Other assets | 500,860 | 424,514 |
Total assets | $198,261,032 | $191,930,960 |
Bonds and notes | $186,731,389 | $180,795,727 |
Accrued interest payable | 1,217,182 | 1,201,851 |
Other liabilities | 381,082 | 470,261 |
Total liabilities | $188,329,653 | $182,467,839 |
Shareholders' equity | $9,931,379 | $9,463,121 |
Total liabilities and shareholders' equity | $198,261,032 | $191,930,960 |
AGRIBANK, FCB | ||||
STATEMENTS OF INCOME INFORMATION | ||||
(in thousands) | ||||
For the | For the | |||
three months ended | six months ended | |||
June 30, | June 30, | |||
2025 | 2024 | 2025 | 2024 | |
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |
Interest income | $1,982,085 | $1,867,240 | $3,896,119 | $3,669,068 |
Interest expense | 1,702,836 | 1,641,539 | 3,347,244 | 3,207,774 |
Net interest income | 279,249 | 225,701 | 548,875 | 461,294 |
Provision for credit losses | 20,000 | 7,000 | 21,000 | 8,000 |
Net interest income after provision for credit losses | 259,249 | 218,701 | 527,875 | 453,294 |
Non-interest income | 25,910 | 28,648 | 54,954 | 57,278 |
Non-interest expense | 57,711 | 52,481 | 112,798 | 103,985 |
Net income | $227,448 | $194,868 | $470,031 | $406,587 |
SOURCE AgriBank
