Northwest FCS

2021 Annual Report

Northwest Farm Credit: Rural, Real Estate, Operating Loans; Farm Loans; Country Home Loans; Lot Loans; Equipment Financing; Young and Beginning Producers; Crop Insurance; Business Management Education; Property Appraisals

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CHAIR Message Nate Riggers Board Chair ($ in millions) Cash Patronage Paid 2018 2019 2021 2017 2020 $177.2 $165.2 $145.1 $138.4 $108.1 Annual Report 2 LAC members for helping us better understand our communities' needs, changing economic conditions and customer sentiments across our diverse association. As our board looks toward the future, we are keenly aware of our responsibility to assure our association remains financially strong with adequate capacity and services to support future generations of business owners. Following considerable analysis and discussion, our board unanimously agreed to sign a letter of intent to merge with Farm Credit West, which serves producers, agribusinesses and related industries in California, Arizona and parts of Nevada. We are both successful, financially strong Farm Credit associations who have partnered together for many years to jointly finance customers, serve rural markets, and collaborate in operational areas. We are currently assessing the benefits of a merger for stockholders and are finalizing merger agreement terms. Following review by our regulator, the Farm Credit Administration, the merger proposal will be submitted to customer-stockholders of both associations for their consideration and vote of approval in the fall. On behalf of the board, I want to thank Northwest FCS employees and management for continually finding ways to serve our customers effectively, despite changing conditions. We sincerely appreciate the customer-members who support this cooperative and contribute to our exceptional results. We look forward to continuing to support your businesses. I'm extremely proud of our Northwest FCS customers. Despite continuing challenges of the pandemic, and extreme drought and fire conditions across the Northwest, our customers continue to be great stewards of their businesses and sound risk managers. It's encouraging to see sustained sound credit quality in our loan portfolio as we support the Northwest agriculture, forestry, and fisheries industries. By all measures, 2021 was a strong year for the associa- tion. Based on our financial performance, the board voted to provide cash patronage dividends at 1.25% of our customers' eligible average daily loan balances. For 2021, total patronage was $165.2 million. Our board is commit- ted to provide our customer-members with a reliable and consistent level of patronage which is an important benefit of being a cooperative member. Since 2000, Northwest FCS has paid more than $1.4 billion in cash patronage which has provided a significant economic boost to the rural commu- nities we serve. In addition to patronage, we increased our stewardship investment throughout the Northwest. In 2021, the board designated an additional $4 million in investments to universities and colleges to support the vital role higher education plays in industry research and developing our future producers and employees. The board also designat- ed $4 million for our Local Advisory Committee members to guide stewardship investments towards local non-profit organizations in 2022. Our LAC members have been instrumental in supporting our Rural Community Grant program by identifying worthy causes and writing letters of support. We believe they understand better than anyone the unique needs in our local communities. We thank our

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