Recent Financial Trends for Farm Credit Mid-America
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Date
2025-03
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Abstract
Farm Credit Mid-America (FCMA) is an agricultural institution in the Farm Credit System that provides loans, insurance, and leasing to the agricultural sector, primarily in the Midwestern United States. This report analyzes the financial health and operations of FCMA relative to their prior years of operation and key indicators in the agricultural lending industry, uniquely contextualized with the acquisition of Farm Credit Midsouth in April 2023. First, the report analyzes the growth and distribution of loans in the institution’s portfolio, evaluating information such as the location of loans given, agricultural loans by type, and annual agricultural loan concentration. Second, analysis is done on the organization’s performance as a whole, through metrics such as asset growth, net income, net interest margin, and capital ratios. We found that FCMA performed exceptionally well in 2023, seeing asset growth of 11.9% and only falling behind their growth in 2021 after the economic rebound from the COVID-19 pandemic. Loan quality continues to annually increase as FCMA holds less loans classified as risky. Further, the percentage of loans outside of states explicitly defined in FCMA’s primary service area (Arkansas, Indiana, Kentucky, Missouri, Ohio, and Tennessee) continued to increase, demonstrating an expansion of their service area to coincide with the expansion of their total assets and loans. While simultaneously expanding their service area greatly through the acquisition of Farm Credit Midsouth, FCMA continues to show indicators representative of a healthy and profitable institution, with net assets and loans increasing as risky loan holdings decrease. Further, their capital ratio remained well above the Farm Credit System observed Basel III thresholds and continues to decrease, showing that FCMA continues to maximize the use of their available capital for growth.
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Business, Society, and International Relations (The Ohio State University Denman Undergraduate Research Forum)
Keywords
Agriculture, Farm Credit System, Loans, Banking, Finance