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For Immediate Release
May 3, 2007

AUSTIN, Texas – The Tenth Farm Credit District, a network of rural financing cooperatives, today reported outstanding first-quarter financial results highlighted by record growth and earnings.

The district is composed of the Austin-based Farm Credit Bank of Texas (FCBT) and 20 rural lending institutions in Alabama, Louisiana, Mississippi, New Mexico and Texas.

Total loans outstanding increased to almost $13.5 billion at March 31, 2007, up 4.4 percent from $12.9 billion at Dec. 31, 2006, and up 29.9 percent from $10.4 billion reported at March 31, 2006.

The overall quality of the loan portfolio remained very strong, with 98.8 percent of all loans classified as acceptable at March 31, 2007, a slight increase from a year earlier.

Earnings also increased significantly. Net income totaled $67.1 million for the three months ended March 31, 2007, up 18.5 percent from the $56.6 million reported for the same period of 2006. This increase was largely due to a 14.1 percent increase in net interest income driven by higher loan volume and an increase in noninterest income.

“To achieve 30 percent loan growth and an 18.5 percent increase in net income over the same quarter a year ago is outstanding, but to do so while also improving credit quality is particularly significant,” said Larry Doyle, FCBT chief executive officer. “These results attest to our associations’ sharp focus on competitive loan pricing, customer service, and increased efforts to penetrate their local markets.”

At March 31, 2007, district assets totaled $16.4 billion. Members’ equity in the cooperatively owned lending organizations totaled $2.17 billion.

“We are extremely pleased with the district’s strong start for 2007, because the better we do throughout the year, the more our associations’ customers will benefit through patronage payments after year end,” said FCBT Board Chairman Ralph W. Cortese.

The cooperative structure of the Tenth District financing co-ops allows them to distribute patronage, thereby reducing their borrowers’ costs of financing. In 2006, the Tenth District’s 20 lending cooperatives declared more than $124.8 million in cash and equity patronage distributions.

The Farm Credit Bank of Texas also reported strong first-quarter results, highlighted by $17.5 million in net income at March 31, 2007. This was an 11.5 percent increase from a year earlier.

The Tenth District lenders provide loans and financial services to agricultural producers, agribusiness firms, country homeowners and other rural landowners. They are part of the nationwide Farm Credit System, established by Congress in 1916.

Nationally, the Farm Credit System reported combined net income of $654 million for the quarter ended March 31, 2007, compared with combined net income of $554 million for the same period of 2006.