SANTA ROSA -- American AgCredit today reported net earnings last year increased 88 percent from 2010 to a new record for the Santa Rosa-based agricultural lending giant.

The institution said it also paid its highest-ever total cash dividend to customers last year.

“Our board of directors made a unanimous commitment to return 1 percent of our borrowers’ daily loan balances, effectively reducing customer interest rates,” said President and Chief Executive Officer Ron Carli.

The nation’s sixth-largest farm credit association had net earnings of $180.7 million last year. The $34.7 million in dividends to member-customers for the year was a 25 percent increase from 2010.

Average loan volume in 2011 was $4.39 billion, with $128 million in net interest income and a permanent capital ratio at the end of the year of 21.6 percent.

The cash dividend paid to customers in the institution's central region, an area encompassing Sonoma, Marin, Napa, Mendocino and Lake counties, totaled $6.8 million.

Accounting for a one-time recapitalization transaction this year puts net income at $92.7 million for 2011, up $11.4 million from 2010.

Despite a 5 percent decrease in net interest income in 2011, attributed to declining loan volume, the strong financial condition of its agricultural borrowers and its geographic and commodity diversification of assets have helped maintain a stable portfolio, according to American AgCredit.

The institution described year-end credit quality as stable at 95.9 percent.

American AgCredit has merged with five other lenders since 2000, most recently with this year’s acquisition of Farm Credit of the Mountain Plains  in Greeley, Colo. Those mergers have further diversified  portfolio, according to Mr. Carli.

"Our strength lies in our diversity -- the wide range of commodities financed, the broad geographical area we serve and the spectrum of borrowers, from small family farms to major agricultural operations," he said.

American AgCredit, founded in 1916, specializes in financial services for agriculture and rural customers in California, Nevada, Kansas, Northern Oklahoma, Colorado and New Mexico and in capital markets in 30 states.