AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a cooperatively owned wholesale funding bank of the Farm Credit System, reported strong financial results for the first quarter of 2013.
Net income for the quarter ended March 31, 2013, totaled $53.8 million, a 57 percent increase from the same period of 2012. The increase was due largely to a $6.4 million increase in noninterest income, combined with a $13.7 million decrease in provision for loan losses.
Return on average shareholders’ equity increased to 16.8 percent for the first quarter of 2013 from 11.2 percent for the first quarter of 2012.
The Austin-headquartered bank’s gross loan volume totaled $11.52 billion at March 31, 2013, compared with $11.34 billion at Dec. 31, 2012. The 1.6 percent increase in the loan portfolio is attributable to growth in the bank’s participation loan portfolio.
Credit quality remains strong and continues to improve, with 97.8 percent of the bank’s loans classified as acceptable or special mention, up from 97.5 percent at Dec. 31, 2012, and 93.8 percent at March 31, 2012. Nonaccrual loan volume decreased 24.2 percent during the quarter to $48.3 million at March 31, 2013.
“While the bank’s overall financial performance in the first quarter was strong, we are particularly pleased with the improvement in credit quality, which is one of the best indicators of a lender’s financial health,” said Larry Doyle, FCBT chief executive officer. “We have worked hard over the past year to improve our asset quality.”
Farm Credit Bank of Texas is owned by 17 rural financing cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas, which in turn are owned by their customers — agricultural producers, agribusinesses, country homeowners and other rural landowners. Together, the bank and its affiliated lenders comprise the Texas Farm Credit District, the largest rural lending network in the five-state region.
Collectively, the district lenders reported $115.8 million in net income for the first quarter of 2013, a 20.7 percent increase from the first quarter of 2012. District loan volume increased to $17.09 billion at March 31, 2013, up 1.3 percent from year-end 2012.
“Agriculture continues to remain a very bright spot in the nation’s economy,” said Jimmy Dodson, FCBT board chairman. “Farm Credit Bank of Texas and our local lending co-ops are proud of our healthy financial performance, which enables us to fulfill our mission to serve the financing needs of farmers, ranchers and agribusiness firms.”
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 $1.14 billion for the quarter ended March 31, 2013, compared with combined net income of $1.05 billion for the same period last year.