Farmer Mac posted lower net income than during the second quarter of 2015 on a loss on financial derivatives and hedging activities.
Farmer Mac reported a 45% drop in net income year over year to $12 million. Earnings per share came in at $1.15.
Farmer Mac also swung to a $234,000 noninterest loss, from noninterest income of $18.2 million last year. That decreased stemmed entirely from a $4.7 million loss on financial derivatives and hedging activities versus a $14.4 million gain a year ago. But it did see improvement in other sources of noninterest income, such as guarantee and commitment fees and gains on trading securities.
Net interest income rose 7% year over year to $34 million on higher profits from loans and Farmer Mac Guaranteed and USDA securities. Noninterest expense held steady at $10.1 million.
Credit quality was stable during the quarter across Farmer Mac's four business lines in spite of headwinds facing the agricultural industry. Overall, the government-sponsored enterprise recorded $1.3 billion in new business during the quarter.
"As the agricultural economy continues to adjust to lower commodity prices and the persistence of drought conditions in some portions of the West, we continue to believe that Farmer Mac is well positioned to deliver upon its mission as credit becomes somewhat tighter in agriculture," Farmer Mac president and chief executive Tim Buzby said in a news release Tuesday.