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 net income for the second quarter of 2012.
The bank’s gross loan volume at June 30, 2012, totaled $10.98 billion, an increase of 6.7 percent from Dec. 31, 2011. The increase was mainly attributed to growth in the bank’s participation loan portfolio, offset by a decrease in direct loans to its affiliated financing cooperatives.
Credit quality also improved in the second quarter, with 94.2 percent of the loan portfolio classified as “acceptable” or “other assets especially mentioned” at June 30, 2012, compared with 91.2 percent at Dec. 31, 2011. Nonaccrual loans decreased 27.0 percent from year-end 2011, to $75 million at mid-year.
Net income for the three months ended June 30, 2012, was $54.3 million, an increase of 9.8 percent from the same quarter a year earlier. The increase was largely attributed to $9.8 million in refunds from the Farm Credit System Insurance Corporation. Net income for the six months ended June 30, 2012, was $88.5 million, down 3.0 percent from the same period in 2011.
“We are very pleased with the progress achieved in the area of credit quality and our very positive earnings performance,” said Larry Doyle, FCBT chief executive officer. “Our earnings allow our affiliated lending cooperatives to fulfill our mission to extend competitive financing to rural America.”
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 regions 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 has $16.4 billion in outstanding loan volume and is the largest rural lending network in the five-state region.
The institutions in the Texas District reported $126.6 million in combined net income for the quarter ended June 30, 2012, a 26.8 percent increase over the same quarter of 2011. District net income for the first six months of this year totaled $222.6 million, up 16.8 percent from the same period last year. District loan volume was up 4.9 percent at June 30, 2012, from year-end 2011.
“Rains have made a welcome return to much of our territory, improving pasture and growing conditions significantly since last year,” said FCBT Board Chairman Jimmy Dodson. “While ongoing effects of the drought and volatility in commodity prices remain concerns for many of our customers, risk mitigation tools such as USDA loan guarantees and crop insurance continue to provide stability to the district portfolio.”
Nationally, the System reported combined net income of $1.067 billion and $2.119 billion for the respective three-month and six-month periods ended June 30, 2012. This compares to combined net income of $982 million and $1.986 billion for the same periods last year.