The information below has been supplied by dairy marketers and other industry organizations. It has not been edited, verified or endorsed by Hoard’s Dairyman.
The Farm Credit System Insurance Corporation board of directors voted today to maintain the current insurance premium assessment rate on adjusted insured debt at 9 basis points for Farm Credit System banks. The board also announced that it would continue assessing 10 basis points on nonaccrual loans and other-than-temporarily impaired investments. “The board decided to maintain the premium rate on adjusted insured debt because we anticipate growth in insured obligations of 6 percent in 2018, which is within the growth range projected by FCSIC in January 2018,” said FCSIC Chairman Jeffrey Hall. Twice a year, the FCSIC board reviews the insurance premium rate and makes adjustments, if necessary, to maintain the secure base amount, which is 2 percent of the level of adjusted insured debt outstanding at System banks. According to preliminary results as of May 31, 2018, the unallocated Farm Credit Insurance Fund level was 2.02 percent of adjusted insured debt outstanding, or $52 million above the secure base amount. When determining the appropriate premium assessment rate, the board considers the following factors:
- The current level of the Insurance Fund and the projected growth of insured obligations
- The likelihood of any potential Insurance Fund losses
- The financial condition of System banks and associations
- The outlook for the agricultural economy
- Any risks in the financial environment