Following World War I, which was a prosperous time for farmers, prices collapsed. This resulted in a lack of short-term credit for farmers and ranchers. Congress responded with the Agricultural Credit Act of 1923, which added 13 Federal Intermediate Credit Banks (FICBs), including the FICB of Houston, to the Farm Credit System.

The stock market crash of 1929 touched off the Great Depression, which threw thousands of farmers into bankruptcy. It also strangled the Farm Credit System's ability to finance agriculture. In 1933, Congress passed two laws affecting the future of Farm Credit. One piece of legislation recapitalized the Land Banks with $189 million. The other revamped the FICBs and established a short-term credit delivery system through farmer-owned local Production Credit Associations. A new regulator, the Farm Credit Administration, was set up to supervise all federal agricultural credit agencies.

With the nation’s entry into World War II, demand for food, fiber and other wartime materials increased. Farmers, called “soldiers of the soil,” turned to the Farm Credit System for financing to plant and harvest badly needed crops. As producers discovered the benefits of doing business with a financing cooperative they owned, Farm Credit became their trusted financial partner. By 1945, U.S. agriculture was prospering, and Farm Credit was recovering from the Great Depression.

Congress took steps to bring Farm Credit closer to the cooperative ideal. The Farm Credit Act of 1953 removed the Farm Credit Administration from the USDA, making it an independent federal agency, with policy oversight from a member-nominated Federal Farm Credit Board. The new board presented Congress with a plan to make farmers the full owners of the System, by replacing government’s capital investment with farmer-owned capital.

Meanwhile, agriculture was undergoing an industrial transformation, heralded by equipment innovations and technological advancements. The farm labor force declined, while the amount of capital needed to run a farm increased. Again, Farm Credit responded to the growing need for agricultural financing.

As the “second agricultural revolution” continued in the 1960s, Farm Credit lending cooperatives grew larger and stronger. By 1968, all Farm Credit System lending entities had repaid their federal capital debt and were completely owned by their borrowers.

The Farm Credit Act of 1971, along with amendments added in 1980, expanded the range of lending products and services that farm lending cooperatives could offer. These included rural home mortgages, leasing services, commercial fishing loans, and international and rural utility financing.

The Federal Land Bank of Houston and the Federal Intermediate Credit Bank of Houston changed their names, replacing Houston with Texas. Together with the Texas Bank for Cooperatives, they became known as the Farm Credit Banks of Texas.

Congress further expanded the Farm Credit System’s lending authorities to include basic processing and marketing facilities, provide for the creation of service organizations, and encourage lending to young, beginning and small producers.

During the early- to mid-1980s, American agriculture plummeted into recession. Congress responded with legislation that revised the structure and operations of the System and gave the Farm Credit Administration greater regulatory authority. In the midst of the farm debt crisis, Congress passed the Agricultural Act of 1987, providing up to $4 billion in federal loans to financially stressed Farm Credit institutions. It also required the Farm Credit System to organize into a leaner, stronger cooperative system.

During this period, two new entities were set up — the Farm Credit System Insurance Corporation and the Federal Farm Credit Banks Funding Corporation, a stand-alone institution that manages the sale of Farm Credit System securities.

In 1988, the Federal Land Bank and Federal Intermediate Credit Bank in Texas merged to form the present Farm Credit Bank of Texas. The next year, the bank’s charter was extended to provide mortgage lending in Alabama, Louisiana and Mississippi.

During 1990 to 1991, Congress asked Farm Credit to play a greater role in financing agricultural marketing and processing, as well as water and sewer development in rural communities.

During the ‘90s, Farm Credit Bank of Texas saw more organizational and structural changes, including the extension of the bank’s charter to New Mexico in 1990. In 1998, the bank’s stockholders approved the transfer of direct mortgage lending authority from the bank to its affiliated Federal Land Bank Associations (FLBAs). These FLBAs in turn converted to direct lenders, called Federal Land Credit Associations. Over the next few years, most of these associations would merge with Production Credit Associations to become full-service lenders known as Agricultural Credit Associations.

Farm Credit Bank of Texas completed its first private preferred stock offering in 2003. The issuance of $100 million in perpetual preferred stock was part of a strategic objective to increase capital without seeking additional stock from its association owners.

On July 17, 2016, the Farm Credit System celebrated its centennial. At age 100, the nationwide system was composed of 74 borrower-owned lending associations, or cooperatives, and four wholesale funding banks — AgFirst Farm Credit Bank, AgriBank, CoBank and Farm Credit Bank of Texas. Combined, these cooperatives had more than $238 billion in loans, leases and related services — over 40 percent of the credit extended to U.S. agriculture.

Today, Farm Credit Bank of Texas and its affiliated lending cooperatives remain an important part of the fabric of rural America and a financing partner to the nation's agricultural sector.