AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a wholesale bank that provides funding for rural lending cooperatives, reported strong financial results for 2009, in spite of last year’s weak economy.
FCBT net income for 2009 totaled a record $106.6 million, an increase of 38.9 percent over 2008 net income. This increase was driven principally by an increase of $49.8 million, or 41.7 percent, in net interest income, but offset partially by higher operating expenses and an increased provision for loan losses.
Return on average assets and return on average shareholder’s equity increased to 0.74 percent and 13.07 percent, respectively, at Dec. 31, 2009, from 0.54 and 10.19 percent, respectively, a year earlier.
“Given the downturn in the nation’s economy and the difficulties that certain sectors of the agriculture industry faced last year, a modest decline in the size and quality of our loan portfolio was expected,” said Larry Doyle, FCBT chief executive officer. “In spite of these challenging conditions, however, we are proud that we were able to achieve record earnings and thus improve our capital position.”
After several consecutive years of growth, the Austin-based bank’s loan portfolio totaled $11.0 billion at Dec. 31, 2009, which was a 3.2 percent decrease from 2008. At year-end 2009, the bank had assets totaling $13.8 billion, compared with assets of $14.8 billion a year earlier.
“We are very pleased with the bank’s financial performance, particularly during a year that was unusually stressful for many traditional banks,” said Ralph W. Cortese, FCBT board chairman. “Our sustained progress is rooted in our cooperative business model. We are committed to achieving success, because it is in the best interest of our customer-stockholders.”
Established in 1916, Farm Credit Bank of Texas receives its funding through the sale of Farm Credit notes and bonds to investors in the nation’s capital markets. It provides funding to its owners — 19 rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas, and four Other Financing Institutions. These lenders, in turn, finance agricultural production, agribusiness and rural real estate.
The bank is part of the Farm Credit System, the nation’s oldest and largest source of financing for agriculture and rural America. The System reported combined net income of $2.85 billion at Dec. 31, 2009, compared with net income of $2.92 billion the previous year.