SANTA ROSA -- American AgCredit reported $111.2 million in net income in 2013, a 3.7 percent annual increase largely attributed to new loan demand and improved asset quality.
The Santa Rosa-based agriculture lender reported $6 billion in loans at year-end, up 3.9 percent from the end of 2012. That loan volume was up 37.7 percent from a portfolio of $4.4 billion in 2011.
Winery and vineyard loans totaled $1.1 billion at year-end, equivalent to 19 percent of American AgCredit's loan portfolio. It is the lender's largest commodity concentration. That portion grew 29.4 percent from the end of 2011, outpacing the annual growth rate of the overall portfolio by more than 11 percent.
New borrower relationships were the primary driver of that increase, said Chief Executive Officer Byron Enix. American AgCredit focuses primarily on the super- and ultrapremium segments of the wine market, in which borrowers have benefitted from a return of consumer demand in an improving economy, according to the lender's annual report.
Overall loans in the "central" region of Sonoma, Napa, Marin, Mendocino and Lake counties totaled $773 million at year-end, or 13 percent of American AgCredit's loan portfolio.
"It was a very good year on a profit standpoint, and we were able to pay a very strong dividend," Mr. Enix said.
The member-owned financial institution distributed 33.2 percent of its income as dividends in 2013, or $37 million.
Loans considered "substandard" represented 2.2 percent of the overall portfolio, down from 4.2 percent in 2012. The lender had a 0.18 percent loss allowance versus total loans -- less than half of the allowance in 2010 -- and a capital reserve equaling 21 percent of risk-weighted assets.
It is perhaps the strongest balance sheet in the institution's history, one that has executives feeling comfortable amid enduring questions about the implications of a long-term drought in California, Mr. Enix said.