2007 was another solid year for the association. Asset growth, although not at the rate achieved in previous years, met budget and finished the year at just over 4% above of the same point in time in 2006. Asset quality remained at an acceptable level, earnings were again over $10 million, and capital, our ability to manage risk, improved. The result? In December, the board of directors declared a patronage for 2007 and a return of a portion of the association’s allocated surplus. This will be the 19th consecutive year a patronage has been declared. Our mission, “To enhance the economic well being of our North Florida community by providing high quality financial services to all customers and above market returns to our stockholders”, has again been achieved.
Our board and staff are very pleased to present our 2007 annual report. We invite you to review the information contained in the report and welcome your questions and comments.
2008 Outlook
For most of the past 19 years we looked back and wondered how we, Farm Credit and North Florida agriculture, achieved what had been accomplished over the past year. And then we looked forward to the next year and asked ourselves how are we going to do it again. And, somehow we did it.
We all recognize we have come through a period of feverish real estate investment that led to unsustainable increases in prices and growth, and now what? Inventories are high, sales are slow, and prices have declined, or property just hasn’t sold. Depending on to whom you listen, the recovery will begin a month ago or 18 months from now. Who really knows? We do know that interest rates are projected to decline, the stock market has taken a hit, and we will be electing congressmen, senators, and a new president in November. To say the least, it should be interesting.
How will all this impact the association? We believe there will be opportunities throughout our North Florida market and beyond. Our asset quality and capital are at solid levels. Yes, we probably will experience some softening in loan performance - the downturn in the economy will touch some of our customers and to expect differently would not be realistic. Although we are expecting a slower rate of growth, we will continue to serve our existing customers and aggressively seek new business.
Challenges and Commitment
We all have challenges - economic, competition, personnel, personal - what ever they are and how they impact us depends on how committed we are to turning them into opportunities rather than letting them become mountains. Because of our personnel, board, customers, market, and our cooperative Farm Credit System, we have many opportunities to enhance the economic well-being of our stockholders and our community by making funding available at very competitive rates and through our patronage. How? Through our wide variety of loan products and bond funding we are a financial source to our rural community and beyond. Whether you are an individual or corporation, passively or actively involved in agriculture, looking for conservation or recreation opportunities, involved in rural development and infrastructure or a personal rural home loan, large or small, it does not matter. We have the products, systems, services and people to help. We are a trusted lender who has served our market for almost 90 years, and we are committed to making every transaction a positive experience for all involved.
Goals for 2008
We will always be focused on maintaining our sound financial condition, any financial institution or business must keep this goal first and foremost. This has been, and will continue to be, achieved by following our core values and our proven underwriting standards. Because of our condition we are able to adjust to our changing market. We have found that many potential, eligible, customers are either unaware of Farm Credit, or that they can borrow from us. One of our goals for 2008 is to make our services known to a wider audience of eligible customers. Please help us do that.
We also want to improve our service to eligible and worthy Young or Beginning Farmers. A challenge in doing this is, again, identifying and contacting these individuals. We serve a large territory, one in which the rural and agricultural community has rapidly changed. Please help us identify young people, or beginners, involved in agriculture. They may be farmers, ranchers, nursery growers, farm managers, or involved in timber production. Send them to us or give us their names.
As part of our outreach program the board and management has decided to change our annual meeting format. The annual meeting will be an informational meeting only where financials will be reported, the nominating committee report given, and nominations from the floor accepted. No meal will be served. Patronage checks will be mailed or delivered prior to the meeting. Election ballots for director positions and the nominating committee will then be sent to all stockholders. Voting will be by mail.
In lieu of the one centralized stockholder meeting held in the past we will be conducting regional customer appreciation and information exchange meetings throughout the year. These meetings will involve meals and presentations, and will be held at times and places meant to encourage stockholder and guest attendance. Please be on the lookout for your invitation. We are coming to you!
2007 was another good year for the association, the result of dedication and hard work by employees and stockholders alike. Thank you very much for all that you do for the association and our community.
2008 will be full of opportunity for us all. Let’s make it a great year!
J. Charles Thompson
President and Chief Executive Officer
February 28, 2008
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