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For Immediate Release
February 17, 2005

AUSTIN, Texas - The Tenth Farm Credit District, a network of cooperatively owned rural financing organizations, posted outstanding financial results for 2004. For the fourth consecutive year, the district set new records for earnings, asset growth and credit quality.

The Tenth Farm Credit District is composed of the Austin-based Farm Credit Bank of Texas (FCBT), 21 district associations in Alabama, Louisiana, Mississippi, New Mexico and Texas, and four Other Financing Institutions.

Net income for the year ended Dec. 31, 2004, totaled $342.5 million, compared to $168.6 million for the prior year. Included in the results for 2004 was a one-time reversal of the allowance for loan losses of $153.1 million, net of the related $4.2 million tax impact.

This reversal was recorded upon completion of previously announced studies to refine the bank's and district associations' methodologies for determining their allowance for loan losses. The refinement in methodologies resulted in calculated allowances for loan losses that were significantly less than the previously recorded balance, due to revised loss factors that are more indicative of actual loss experience in recent years and to current borrower analysis.

Also, the 2003 results included a one-time gain of $30.5 million recognized upon the sale of the Farm Credit Bank of Texas' mineral rights portfolio. Excluding the $157.3 million one-time reversal of the allowance for loan losses in 2004 and the $30.5 million gain on the mineral rights sale in 2003, district net income for 2004 would have reflected an increase of $47.1 million, or 34.1 percent, over 2003.

Net interest income of $304.1 million at Dec. 31, 2004, was 14.7 percent higher than the $265.0 million in net interest income reported a year earlier.

The district reported $10.3 billion in interest-earning assets at Dec. 31, 2004, up 16.5 percent from the $8.9 billion in interest-earning assets reported at Dec. 31, 2003.

Gross loan volume totaled $8.44 billion at Dec. 31, 2004, an increase of $1.17 billion, or 16.1 percent, from the $7.27 billion reported a year earlier. The district's portfolio of short-term agricultural loans showed the largest gain, increasing by 47.3 percent over the past year to total $1.55 billion at Dec. 31, 2004.

Loan credit quality also remained strong, climbing to 98.3 percent acceptable volume at year-end 2004 from 97.4 percent acceptable a year earlier.

"Our growth in earnings and assets last year was impressive. This achievement can be attributed largely to the efforts of association and bank staff, who pursued their local markets with new products and more competitive pricing, while expanding their marketing efforts in the agribusiness sector," said Larry Doyle, FCBT chief executive officer.

"We are particularly proud that we were able to accomplish this growth while improving credit quality at the same time," he added. "We plan to leverage this momentum to further penetrate our markets in the coming year."

The Farm Credit Bank of Texas provides funding and services to its affiliated Tenth District financing associations, which make agricultural, rural real estate and agribusiness loans. They are part of the nationwide Farm Credit System, a network of rural lending cooperatives established by Congress in 1916.