AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a cooperatively owned wholesale funding bank, reported strong mid-year results, highlighted by sound credit quality and steady growth in assets and net income.
Total assets were $16.86 billion at June 30, 2014, compared with $16.21 billion at Dec. 31, 2013. Gross loan volume was $12.30 billion, compared with $11.78 billion at year-end.
The bank’s loan portfolio includes direct notes to its affiliated lending cooperatives and other financing institutions, as well as capital markets loans that provide capital and liquidity for regional, national and multinational food, agribusiness, energy and rural infrastructure companies. At mid-year, 98.6 percent of the bank’s loan portfolio was classified acceptable and special mention, compared with 98.2 percent at year-end. Provisions for loan losses decreased $5.8 million during the first six months of 2014 compared with the same period in 2013.
“We have been strengthening our earnings engine by building our portfolios of loans and investments, and are witnessing improvement in our strong credit quality,” said Larry Doyle, chief executive officer. “In addition, the bank has developed and maintains a strong level of capital and sufficient reserves. Our ongoing stability is the key to our mission, which is to be a reliable source of competitive financing for agriculture and rural America.”
The bank maintained strong earnings, despite tightening interest rate margins that are being felt across the banking industry. Net income for the three months and six months ended June 30, 2014, was $46.5 million and $91.3 million, respectively, compared with $42.6 million and $96.4 million for the same periods in 2013.
The Austin-based bank and its 15 affiliated rural lending cooperatives make up the Texas Farm Credit District — the largest network of rural lenders serving Alabama, Louisiana, Mississippi, New Mexico and Texas. Together, the district institutions reported net income of $117.2 million and $223.4 million for the three months and six months ended June 30, 2014, respectively, compared with $103.6 million and $219.4 million for the same periods in 2013.
“Farmers and ranchers in our territory have seen some improvements in economic and climate conditions in the first half of the year,” said Jimmy Dodson, FCBT board chairman. “The quality of the loan portfolios at the bank and across our district mirrors the strength of the agriculture industry in our part of the country.”
Collectively, district lenders reported loan volume of $18.23 billion at June 30, 2014, up from $17.73 billion at Dec. 31, 2013. District assets totaled $23.02 billion at June 30, 2014, compared with $22.37 billion at year-end. Credit quality remained strong, with 98.2 percent of district loans classified as acceptable and special mention, compared with 97.8 percent at year-end. Provisions for loan losses decreased $15.1 million during the first six months of 2014 compared with the same period in 2013.
The results discussed herein are preliminary and unaudited. The bank’s financial statements and the combined statements of the Texas District for the quarter ended June 30, 2014, are expected to be available on or about Aug. 8, 2014.
The district is a part of the Farm Credit System, the nation’s largest source of financing for agriculture and rural America. Nationally, the System reported combined net income of $1.20 billion and $2.34 billion for the three-month and six-month periods ended June 30, 2014, compared with $1.10 billion and $2.25 billion for the same periods in 2013.