| For Immediate Release February 26, 2009 |
For more information, contact: Stan Ray, Vice President of Marketing and Corporate Affairs (512) 465-0577 |
Farm Credit Lenders Report Record Patronage Dividends for 2008
AUSTIN, Texas – Tenth Farm Credit District rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas declared a record $152 million, or more than half of their 2008 earnings, in patronage dividends to their customers for 2008 — farmers, ranchers, agribusiness firms, rural landowners and country homeowners.
This latest patronage distribution compares with the district’s patronage distributions of $133.7 million for 2007 and $124.8 million for 2006.
The patronage declaration highlighted the solid 2008 financial results for the Tenth District, which is composed of the Austin-based Farm Credit Bank of Texas (FCBT) and 19 rural lending cooperatives.
"We are extremely pleased to announce this record patronage dividend, especially during these challenging economic times. Returning profits to our borrowers is one of the many ways that Farm Credit cooperatives provide tangible value to their customers," said Ralph W. Cortese, FCBT board chairman.
The district’s net earnings for 2008 totaled $267.7 million. This was a 10.4 percent increase over 2007 net income of $242.5 million. Return on average members’ equity was 11.37 percent in 2008, compared with 10.86 percent in 2007.
The district’s loan portfolio grew last year. Gross loans totaled $16.6 billion at Dec. 31, 2008, an increase of 9.8 percent from the $15.1 billion reported a year earlier. Although high-risk assets at Dec. 31, 2008, increased over the prior year, credit quality remained strong, with 97.1 percent of the loan portfolio classified in the highest regulatory category used to measure credit quality.
"In spite of volatile commodity prices and the turmoil in the financial markets last year, our Tenth District lending cooperatives collectively turned in a solid performance and continued to fulfill their mission to provide qualified borrowers with a competitive and dependable source of credit," said Larry Doyle, FCBT chief executive officer.
"Farm Credit is not immune to the effects of the global financial crisis, but we remain well respected among investors, and going into 2009, we continue to have good access to the capital markets," Doyle said.
The Farm Credit Bank of Texas, which provides funding to the Tenth District’s 19 rural lending cooperatives and five Other Financing Institutions, also reported strong financial results for 2008. FCBT net income of $76.7 million for 2008 was up slightly from the $74.0 million reported for 2007. The bank’s loan portfolio totaled $11.4 billion at Dec. 31, 2008, compared to $10.9 billion at year-end 2007.
The Tenth District is part of the nationwide Farm Credit System, which reported combined net income of $2.9 billion for 2008, as compared with net income of $2.7 billion for the prior year. Established in 1916, the System is the oldest and largest source of financing for agriculture and rural America.