AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a wholesale bank that funds 14 rural lending cooperatives in five states, reported strong earnings and loan volume in the first quarter of 2017.
Loan volume increased 2.7 percent from year-end 2016 to $16.3 billion at March 31, 2017. Total assets increased 2.6 percent to $21.8 billion. Credit quality remained very strong, with 99.8 percent of the bank’s overall loan portfolio classified as acceptable or special mention.
“Credit quality is among the best I’ve seen in my career,” said Larry Doyle, FCBT chief executive officer and a Farm Credit veteran. “With highly diversified loans and strong capital, the bank remains well-positioned to provide the steady funding that is so essential for agriculture and rural America.”
The bank funds locally owned Farm Credit lending cooperatives that provide financing and related services to farmers, ranchers and other rural borrowers. It also participates with other lenders in loans to businesses that ag producers and rural communities rely on, such as food processors, agribusinesses and rural infrastructure companies.
Growth in earning assets contributed to the bank’s $46.8 million in net income and $61.7 million in net interest income for the first quarter of 2017, increases of 11.1 percent and 8.4 percent, respectively, compared with the same period of 2016. The quarter’s earnings also benefited from a $1.6 million decrease in provision for loan losses.
Capital and liquidity levels continue to exceed the regulatory requirements set by the bank’s federal regulator, the Farm Credit Administration. Cash and investments totaled $5.2 billion, providing 207 days of liquidity.
“The bank focuses on staying strong and agile so we can meet the needs of people in agriculture and rural communities,” said FCBT Board Chairman Jimmy Dodson. “Farm Credit’s mission is what sets us apart from other financial institutions.”
The bank and its affiliated cooperatives across Alabama, Louisiana, Mississippi, New Mexico and Texas constitute the Texas Farm Credit District, which reported combined loan volume of $22.9 billion in the first quarter of 2017, an increase of 2.0 percent from year-end. District total assets were a record $28.5 billion. At the end of the first quarter, 98.4 percent of district loans were classified as acceptable or special mention, compared with 98.5 percent at year-end.
Together, the district institutions reported $111.7 million in net income for the first quarter of 2017, an increase of 13.3 percent from the same period in 2016.
The district is part of the Farm Credit System, a nationwide network of cooperatives established in 1916. Nationally, the System reported combined net income of $1.24 billion for the first quarter of 2017, compared with $1.16 billion a year earlier.
The bank, district and System results discussed herein are preliminary and unaudited.