Economic conditions in North Florida and across the country continue to adversely impact the 2009 performance of the Association. A depressed housing market leads to significant declines in new construction, causing depressed lumber prices, which drive real estate values down, resulting in lower tax revenues. Add all this together, and then what? We find higher unemployment, lower consumer and investor confidence, less private investment, and significant cuts in government spending. Yes, the economy has impacted our customers and therefore, the Association’s financial performance. Asset quality has declined and risk has increased, which in turn has caused management and the Board to increase loan loss reserves. The increase in reserves reduces earnings.
After all this good news, the next question has to be…. “What is Farm Credit of North Florida doing about it?” Good question, I’m glad you asked. There is not much we can do about the economy. We can work like heck to help our deserving members work through their problems. There is no ‘one-size-fits-all’ solution for individuals or businesses in financial difficulty. Each customer presents a different challenge, so it is very important for our troubled customers to contact us as soon as they believe they may have problems meeting their financial obligations. They should have current and complete financial information available so that a workable, win-win solution can be found. Our job is to help our customers through difficult times by finding least-cost solutions for customer and Association alike. Our goal is to maintain long-term relationships through good and bad times.
What else are we doing to help our customers and communities through difficult times? We are still making loans! Please understand, the Association is adequately capitalized with 13.39% permanent capital at April 30, and is seeking sound business from existing and new customers alike. I am frequently asked if we are at the bottom of the real estate market. That is a difficult question to answer, and one I don’t dare attempt. Beauty is in the eye of the beholder, one man’s challenge is another man’s opportunity. Do your homework, work the numbers: opportunities exist during all conditions, good or bad. We are still in the business of helping individuals create successful opportunities, which in turn help communities create sound economies. Our staff tells me they are receiving more and more inquiries concerning the availability of financing for the purchase of real estate and other rural needs. And, we have recently seen an increase in sales of smaller tracts. Whether buying or selling, the opportunity is there and interest rates are reasonable. Call us if we can be of assistance.
The year is almost at the half-way point, and Independence Day in drawing near. While working on this message over the Memorial Day weekend, I couldn’t help but think of an experience I had during a recent business trip. As I was boarding a connecting flight out of Atlanta I noticed a young Marine sitting in an aisle seat, I also noticed he was wearing his dress uniform. I told him how much I appreciated him as I walked by and he nodded with a faint smile. Knowing we don’t usually see our service men and women in ‘dress’ uniform, my gut told me this young man was on a special mission. Later during the flight our pilot confirmed what my gut had told me when he announced that we were honored to have a Marine officer on board. The pilot told us the Marine was escorting a fallen friend home and asked that we all remain seated so that the Marine could exit and escort his friend off the plane. My seat allowed me to witness the off-loading ceremony and watch the parents of the fallen Marine as they hugged each other while gently stroking the container carrying their child. I will never forget that scene. Believe me, our economy didn’t even cross my mind. There is a reason Memorial Day comes before Independence Day.
Yes, the economy is tough, but we will get through it. We’ll get through it because we have the determination and freedom to do so. We are very blessed to live in this great country.
Thank you very much for all that you do!
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