News Releases

Publications

Media Center

For Immediate Release
August 1, 2007

AUSTIN, Texas — The Farm Credit Bank of Texas and its affiliated lending institutions today reported a 7.3 percent increase in gross loan volume for the first six months of 2007. Gross loan volume at June 30, 2007, was $13.84 billion, up from $12.91 billion at year-end 2006, and 23.4 percent more than the gross loan volume at June 30 last year.

The Austin-based bank and 20 financing cooperatives, collectively known as the Tenth Farm Credit District (Tenth District), make up the largest rural lending network serving Alabama, Louisiana, Mississippi, New Mexico and Texas.

The district’s net income for the quarter ended June 30, 2007, was $44.3 million, compared with $58.5 million at the quarter ended June 30, 2006. Net income for the first six months of 2007 was $111.4 million, compared with $115.1 million over the same period in 2006. The district’s net interest income and noninterest income both increased for the second quarter.

The decrease in net income for the second quarter primarily was the result of one nonaccrual loan, which was originated by a Tenth District association and in which 11 other associations are participating. To absorb probable losses from this loan, the district’s provision for loan losses for the second quarter reflected an increase of $21.8 million over the $3.9 million provision for the second quarter of 2006.

Nonaccrual loans for the district were 0.6 percent of total loans at June 30, 2007, compared to 0.3 percent at Dec. 31, 2006, and 0.4 percent at June 30, 2006.

“Overall, our credit quality remains extremely high at 98.7 percent, and we continue to see opportunities for loan growth in our district,” said Larry Doyle, chief executive officer of the Farm Credit Bank of Texas. “Our loan volume growth in this profitable quarter reflects the competitive pricing, increased marketing and customer service efforts by our associations.”

Combined assets of the district totaled $16.8 billion at mid-year. Members’ equity in the cooperatively owned lending organizations totaled $2.2 billion.

“We continue to grow at a fast pace while maintaining good credit quality,” said Buddy Cortese, board chairman of the Farm Credit Bank of Texas. “Our loan volume is higher than ever, and our net income for the first half of this year has almost kept pace with the records we set last year. We continue to deliver reliable credit and outstanding service, which I believe are the key reasons we continue to see record growth,” he said.

The Farm Credit Bank of Texas reported strong second-quarter results. The bank’s net income for the second quarter was $18.2 million, a 30.7 percent increase from the second quarter last year.

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

Nationally, the Farm Credit System reported combined net income of $640 million and $1.29 billion for the three and six months ended June 30, 2007, as compared with combined net income of $607 million and $1.16 billion for the same periods last year.