Changes in these ratios relate directly to:
changes in income as discussed below
changes in assets as discussed in the Loan Portfolio
changes in members’ equity as discussed in the Capital Adequacy section.
Changes in Significant Components of Net Income
For the year ended December 31
2015
2014
(in thousands)
Net interest income
Provision for (reversal of) loan losses
Patronage income
Other income, net
Operating expenses
Provision for (benefit from) income taxes
Net income
2013
Increase (decrease) in net income
2015 vs 2014
2014 vs 2013
$86,686
500
11,736
8,613
45,944
8
$83,279
(2,500)
14,250
8,386
41,471
1,093
$79,244
1,000
15,090
9,139
42,267
(386)
$3,407
(3,000)
(2,514)
227
(4,473)
1,085
$4,035
3,500
(840)
(753)
796
(1,479)
$60,583
$65,851
$60,592
($5,268)
$5,259
Net Interest Income
Changes in Net Interest Income
(in thousands)
Changes in volume
Changes in interest rates
Changes in nonaccrual income and other
Net change
2015 vs 2014
2014 vs 2013
$5,335
(2,149)
221
$6,868
(2,888)
55
$3,407
$4,035
Net interest income included income on nonaccrual loans that totaled $1.3 million, $1.1 million, and $1.0 million in 2015, 2014, and 2013, respectively.
Nonaccrual income is recognized when received in cash, collection of the recorded investment is fully expected, and prior charge-offs have been recovered.
Net interest margin (net interest income as a percentage of average earning assets) was 2.7%, 2.7%, and 2.8% in 2015, 2014, and 2013, respectively. We
expect margins to further compress in the future if interest rates rise and competition increases.
Provision for (Reversal of) Loan Losses
The fluctuation in the provision for (reversal of) loan losses is related