WILLISTON, Vt. — Yankee Farm Credit today announced third quarter financial results for 2020. Yankee is a farmer-owned credit cooperative serving Vermont, New Hampshire, and parts of New York. The Association, like many businesses, has been impacted by the COVID-19 pandemic and we encourage stakeholders to read our quarterly shareholder reports found on our website to learn more about those impacts. Quarterly earnings were up from the prior year, and loan quality improved. Overall capital levels and earnings remain healthy at the Association.
Q3 Financial Results
Quarterly net income for Yankee was $3.9 million, an increase of $922 thousand from the same period in 2019. Net interest income decreased 1.6 percent, compared to the same period in 2019, to $4.9 million. There was a reversal to the provision for loan losses of $622 thousand in the third quarter of 2020 compared to a provision for loan losses of $267 thousand in the third quarter of 2019. Two primary drivers to the reversal for loan losses were improvements in credit quality as well as reduced default rate estimates in the portfolio. Noninterest income increased $194 thousand, primarily due to fees related to financial related services. Noninterest expense increased $83 thousand from the same period in 2019.
Loans held by the Association at September 30, 2020 were $544.1 million, down $3.7 million from year-end but $1 million higher than September 30, 2019. The loan portfolio continues to be concentrated in the dairy industry, with 46 percent of total loan volume invested in dairy businesses, compared to 49 percent at June 30, 2020. The second largest concentration is timber, at 14 percent of the loan volume at quarter end, with maple being the third largest concentration at 12 percent.
Credit quality across Yankee’s loan portfolio saw improvement during the quarter and continues to be well within the risk-bearing capacity of the Association. At quarter end, 1.02 percent of the Association loans were classified as nonperforming, down 0.18 percent from the end of 2019. There were no significant charge-offs or recoveries in the quarter. The Association’s permanent capital ratio at quarter end was 19.00 percent, up slightly from 18.62 percent at the end of 2019.
–Yankee Farm Credit