AgriBank Reports Fourth Quarter 2024 and Year-End Financial Results

Strong financial performance reflects model, Association success

ST. PAUL, Minn., March 1, 2025 /PRNewswire/ -- Today, St. Paul-based AgriBank announced financial results for the fourth quarter and full year of 2024, with strong profitability, credit quality, and liquidity and capital.

Highlights:

• Profitability: Net income remained strong at $927.5 million for the year ended December 31, 2024. AgriBank's year-to-date return on assets (ROA) ratio of 51 basis points was above the target of 50 basis points.
  
  
• Credit quality: Total loan portfolio credit quality remained strong, with 99.4 percent of loans classified as acceptable at December 31, 2024.
  
  
• Liquidity and capital: End-of-the-quarter liquidity was 152 days, well above the regulatory requirement. Capital also remained well above the regulatory minimums and company targets.

"Our continued stable and strong financial position and increasing net income results reflect our Funding Bank Model structure and the financial strength and operating performance of our Farm Credit Association-owners," said AgriBank CEO Jeffrey Swanhorst. "AgriBank is well-positioned to continue meeting the Associations' funding needs as they meet the growing needs of farmers, ranchers and other borrowers, all in fulfillment of our mission to support rural communities and agriculture."

2024 Results of Operations

Net interest income was $1.1 billion for the year ended December 31, 2024, an increase of $77.3 million, or 7.8 percent, compared to the same period of the prior year. The increase was primarily driven by higher spread income on retail loans in AgriBank's asset pool portfolio, when compared to the prior year, due to the purchase of a significant number of loan participations during the second half of 2023. Additionally, the benefit of equity financing from higher interest rates compared to the same period of the prior year has also contributed to the increase in net interest income. These factors were offset by market conditions that limited AgriBank's ability to generate income through funding actions and spread income on investment securities.

Non-interest income was $108.9 million for the year ended December 31, 2024, an increase of $3.4 million, or 3.2 percent, compared to the same period of the prior year, primarily related to an Allocated Insurance Reserve Accounts (AIRAs) distribution received from the Farm Credit System Insurance Corporation (FCSIC) during the second quarter of 2024. The increase in non-interest income from AIRAs was offset by other losses.

Non-interest expense was $216.9 million for the year ended December 31, 2024, an increase of $18.5 million, or 9.3 percent, compared to the same period of the prior year. The increase was primarily due to increases in loan servicing fees related to expansion in AgriBank's asset pool programs in the second half of 2023 and throughout 2024.

Loan Portfolio 

Total loans were $164.7 billion at December 31, 2024, an increase of $15.9 billion, or 10.7 percent, compared to December 31, 2023. This increase was primarily attributable to wholesale loan growth and increases in retail loans, from expanded participation in asset pool programs.

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 December 31, 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 95.7 percent classified as acceptable at December 31, 2024, compared to 96.2 percent acceptable at December 31, 2023.

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 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 $9.5 billion as of December 31, 2024, an increase of $879.9 million compared to December 31, 2023. The increase was driven primarily by AgriBank's net income and capital stock issuances. This increase was partially offset by patronage distributions 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, cash equivalents, and investments totaled $25.1 billion and $25.5 billion at December 31, 2024, and December 31, 2023, respectively. AgriBank's end-of-the-period liquidity position represented 152 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.

SOURCE AgriBank