SUN PRAIRIE, Wis. — Compeer Financial, a member-owned Farm Credit cooperative based in the Upper Midwest, announced financial results for the second quarter of 2020, including strong net income levels, above-average asset growth and solid credit quality.
Compeer Financial reported total assets of $23.4 billion as of June 30, 2020, which is an increase from $22.2 billion at close of 2019. This growth is due to an increase in loan volume within the capital markets and core sectors, as well as the Agri-Access portfolio, which provides land loans to the agriculture industry.
As the COVID-19 pandemic reached the United States and brought volatility to agricultural markets, the organization worked with clients to weather the storm. Though physical offices were closed to the public throughout quarter two, Compeer team members reached clients through phone and online meetings, online banking tools and virtual webinars to keep farmers and agribusinesses up to date with the latest information and the implications for individual clients.
“The impacts of COVID-19 and trade disruptions continue to affect agriculture and rural America,” said Rod Hebrink, president and CEO of Compeer Financial. “Our aim has always been to work in partnership with our clients to navigate whatever challenges they face. For some, this has meant a new approach to the way they do business or a change in their management practices. No matter the situation, Compeer is committed to providing insights, education and financial solutions for our clients’ individual needs.”
Net after-tax earnings were reported at $201 million for the first half of 2020, compared to $194.7 million during the first half of 2019. While net interest income increased about $6.6 million compared to last year, non-interest income grew significantly, from about $113.6 million at June 30, 2019, to $136.3 million at June 30, 2020. This strong increase in non-interest income was driven by a $16.2 million increase in fee income from the Rural Living Solutions and capital markets sectors, conversion activity and Paycheck Protection Program (PPP) loans.
“The Paycheck Protection Program has been critical for our clients, and since the funding was first announced, Compeer has been laser-focused on making sure our clients take full advantage of the opportunity,” said Hebrink. “This is a vital program that has helped our producers and ag businesses keep their employees on staff and production going.” Thus far, Compeer Financial has processed more than 3,000 PPP loan applications, totaling $158.4 million.
Net interest income and fee income increases were partially offset by increases in provisions for loan losses and salary expenses. Provision expense continues to increase as a result of the challenging time in the market, with total provision for the year of $30 million at the end of Q2, compared to $13.6 million at the same time in 2019. This provision expense funds the organization’s reserve for loan loss, which will continue to be closely monitored as credit quality and economic conditions change throughout the remainder of 2020.
Overall credit quality remains solid, with a decrease in nonaccrual loans; 0.6% being nonaccrual at the close of Q2 2020, compared to 0.8% at year-end 2019. Total regulatory capital remains strong at 15.1%.
In April, the Compeer Financial Fund for Rural America announced a $830,000 commitment to coronavirus relief efforts in communities across its territory of Illinois, Minnesota and Wisconsin. The support included donations to local community foundations for COVID-19 response efforts, grants for organizations and emergency response providers, funding for local foodbanks, donations to rural healthcare facilities and more.
About Compeer Financial
Compeer Financial is a member-owned Farm Credit cooperative serving and supporting agriculture and rural communities. The $23.4 billion organization provides loans, leases, risk management and other financial services throughout 144 counties in Illinois, Minnesota and Wisconsin. Based in the Upper Midwest, Compeer Financial exists to champion the hopes and dreams of rural America, while providing personalized service and expertise to clients and the agriculture industry.
Compeer Financial is the third largest cooperative of the Farm Credit System, a nationwide network of lending institutions supporting agriculture and rural communities with reliable, consistent credit and financial services. Learn more about Compeer Financial.
— Compeer Financial
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