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For Immediate Release
November 3, 2010
For more information, contact:
Stan Ray, Chief Administrative Officer
(512) 465-0577

Farm Credit Bank Announces Solid Third Quarter Financial Results

AUSTIN, Texas – Farm Credit Bank of Texas (FCBT) reported solid financial results for the third quarter of 2010, highlighted by strong growth in net income and increases in liquidity and shareholders’ equity.

Net income for the quarter ended Sept. 30, 2010, totaled $32.75 million, up 62.1 percent over the same quarter of 2009. Net income of $113.78 million for the first nine months of 2010 was up 77.4 percent over the first nine months of 2009.

The increase in net income was largely the result of a $6.27 million or 14 percent increase in net interest income for the quarter, and a $5.28 million decrease in the provision for loan losses.

Larry Doyle, FCBT chief executive officer, said the bank took advantage of the continuing low-interest-rate environment to improve the bank’s overall financial position.

“Through a prudent debt management strategy of calling higher-cost debt and replacing it with lower-cost debt, we achieved a significant increase in earnings, which allowed us to absorb adversity within our loan portfolio,” Doyle said.

The bank reported loan volume of $10.61 billion at Sept. 30, 2010, a 3.8 percent decrease from Dec. 31, 2009. The decrease was attributed to declines in the bank’s direct loans to its affiliated Farm Credit cooperatives and Other Financing Institutions, offset by growth in the bank’s participation loan portfolio.

The bank’s total assets increased to $14.19 billion at Sept. 30, 2010, from $13.78 billion at year-end 2009. This increase was due to a planned strategy to increase the bank’s liquidity position through growth in high-quality investment securities and cash by 31.8 percent to $3.47 billion. During the same period, total shareholders’ equity increased by 49 percent to $1.22 billion, due to earnings of $113.78 million for the nine months ended Sept. 30, 2010, and the issuance of $300 million of non-cumulative subordinated perpetual preferred stock in August of 2010.