AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a cooperatively owned wholesale funding bank in the nationwide Farm Credit System, reported increased loan volume and strong credit quality for the third quarter of 2012.
The bank’s gross loan volume at Sept. 30, 2012, totaled $11.11 billion, an increase of 8.0 percent from Dec. 31, 2011. The increase was attributed to growth in the bank’s portfolio of highly rated participation loans and in direct loans to its affiliated financing cooperatives. These loans, along with investments, contributed to a $1.04 billion increase in average earning assets for the quarter ended Sept. 30, 2012, over the same period of 2011.
Loans classified under the Farm Credit Administration’s Uniform Loan Classification System as “acceptable” or “other assets especially mentioned” were 97.5 percent of the bank’s loan portfolio at Sept. 30, 2012, compared with 91.2 percent at Dec. 31, 2011, and 90.3 percent at Sept. 30, 2011. Impaired loans constituted 0.7 percent of gross loan volume at Sept. 30, 2012, down from 1.0 percent at Dec. 31, 2011, and 1.4 percent at Sept. 30, 2011.
“The efforts of the bank’s management and the positioning of the bank’s loan portfolio have put us in a good credit quality position,” said Larry Doyle, FCBT chief executive officer. “We have a strong base for our earnings engine in the coming year.”
The Austin-headquartered Farm Credit Bank of Texas is the source of funds for 17 rural financing cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas. These lenders, which own the bank, in turn make loans to their owners — farmers, ranchers, agribusiness firms, rural landowners and country homeowners.
Together, the bank and its affiliated lending cooperatives make up one of four districts within the 96-year-old Farm Credit System, the nation’s largest source of financing for agriculture and rural America. Combined, the Texas Farm Credit District is the largest rural lending network in the five-state region, and had $16.59 billion in outstanding loan volume at Sept. 30, 2012, up 6.2 percent from year-end 2011 and up 8.7 percent from Sept. 30, 2011.
The bank’s net income for the three months and nine months ended Sept. 30, 2012, was $41.6 million and $130.1 million, respectively, which decreased 6.5 percent and 4.2 percent from the same periods a year earlier, attributed largely to an increased provision for loan losses in a small number of large participation loans and an increase in noninterest expenses. The institutions in the Texas District reported $98.2 million in combined net income for the quarter ended Sept. 30, 2012, a 2.4 percent increase over the same quarter of 2011. District net income for the first nine months of this year totaled $320.7 million, up 12 percent from the same period last year.
“Our district has seen positive results across the entire financial spectrum,” FCBT Board Chairman Jimmy Dodson said. “We’re proud of the hard work and professionalism of the staff and boards at the bank and our affiliated lending institutions.”
Nationally, the System reported combined net income of $1.039 billion and $3.158 billion for the respective three-month and nine-month periods ended Sept. 30, 2012. This compares to combined net income of $1.008 billion and $2.994 billion for the same periods last year.