AUSTIN, Texas – Farm Credit Bank of Texas (FCBT) reported solid earnings, positive loan growth and strong credit quality in the second quarter of 2020.
Net income for the first six months of 2020 totaled $108.6 million, up 14.1% compared with the same period of 2019. Net interest income for the first six months of 2020 totaled $154.1 million, an 18.3% increase compared with the same period of the prior year.
Total loans were $20.6 billion at June 30, 2020, an increase of 5.8% since the end of 2019. Total assets were $27.3 billion, an increase of 6.3% since year-end. Credit quality continues to remain strong, with 99.6% of loans classified as acceptable or special mention.
“Loan demand remained strong in our five-state territory,” said Larry Doyle, FCBT chief executive officer. “The bank also called $11.5 billion in debt in the first half of the year and issued new debt at lower rates given the low interest rate environment. This will reduce our interest expense into the future.”
The cooperatively owned wholesale bank provides funding and support services to 14 Farm Credit cooperatives — also called associations — and two other financing institutions. Those lenders, in turn, provide credit and financial services to farmers, ranchers, rural homeowners, landowners and agribusinesses. The bank also participates with other lenders in loans to businesses that serve agriculture and rural communities.
The bank carries significant cash and liquidity investments to meet its operational needs — and those of the associations and their borrowers. Cash and investments totaled $6.2 billion at June 30, 2020. Total capital ratio was 15.0% and shareholders’ equity was $1.9 billion at the end of the quarter.
The bank continues to fulfill its mission to support agriculture and rural communities during these unprecedented times by providing reliable and consistent access to credit. The overall impact of COVID-19 is evolving rapidly, and future events are uncertain. The bank will continue to monitor the situation closely in coming quarters.
“Farm Credit has a long history of supporting agricultural producers and rural communities in times of adversity,” said FCBT Board Chair Jimmy Dodson. “Many customers are facing uncertainty in the agricultural sector because of the pandemic. The bank and associations are financially strong and prepared to address their needs.”
The bank is part of the Farm Credit System, a nationwide network of cooperatives established in 1916. The System reported combined net income of $1.4 billion and $2.9 billion for the three months and six months ended June 30, 2020, compared with $1.4 billion and $2.7 billion a year earlier.
The financial results discussed here are preliminary and unaudited.