| For Immediate Release May 05, 2009 |
For more information, contact: Stan Ray, Vice President of Marketing and Corporate Affairs (512) 465-0577 |
Farm Credit Lenders Report Steady Loan Volume in First Quarter
AUSTIN, Texas –The Tenth Farm Credit District today reported strong first-quarter financial results, despite changing economic conditions.
The Tenth Farm Credit District reported steady loan demand and continued profitability in the first quarter of 2009.
"In spite of economic pressures, our Tenth District lending cooperatives have experienced steady loan demand this year from farmers, ranchers and agribusinesses throughout the region we serve," said Ralph W. Cortese, board chairman of the Farm Credit Bank of Texas (FCBT). "We continue to manage our resources in order to meet the financing needs of creditworthy customers in rural America, which has been our mission since 1916."
The Austin-based bank and 19 rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas compose the Tenth District. They are part of the Farm Credit System, the nation’s largest source of financing for agriculture and rural real estate.
The district’s gross loan volume totaled $16.5 billion at March 31, 2009, down 0.6 percent from Dec. 31, 2008, but up 5.1 percent from a year earlier. At March 31, 2009, 95.5 percent of the district’s loans were classified as "acceptable" or "other assets especially mentioned," compared to 97.1 percent at year-end 2008.
High-risk asset volume increased by $107.9 million, or 30.6 percent, during the quarter, due largely to seven large nonaccrual loans. Impaired loans, consisting of nonaccrual loans, formally restructured loans and accrual loans past due 90 days or more, constituted 2.7 percent of gross loans at March 31, 2009, compared with 2.1 percent at Dec. 31, 2008.
"While our impaired loans increased during the quarter, as expected, our overall loan portfolio continues to look relatively stable, especially given the difficult economy and stress that lenders everywhere are experiencing," said Larry Doyle, FCBT chief executive officer.
District net income for the first quarter of 2009 totaled $49.9 million, a $19.9 million decrease from the record first-quarter earnings of 2008. Although net interest income for the quarter increased by $11 million, or 9.6 percent, from the same period a year earlier, a decline in noninterest income, higher provision for loan losses and an increase in noninterest expense contributed to the decrease in net income.
The Tenth District held assets of $19.9 billion at the end of the first quarter of 2009. Members’ equity totaled $2.4 billion at March 31, 2009, a 2.9 percent increase from Dec. 31, 2008.
The Farm Credit Bank of Texas, which provides funding to its 19 affiliated Tenth District lending cooperatives, reported net income of $16.6 million for the three months ended March 31, 2009, compared to $21.0 million for the same period of 2008.
The bank’s loan portfolio totaled $11.5 billion at March 31, 2009, compared to $11.4 billion at Dec. 31, 2008. Nationally, the Farm Credit System reported combined net income of $615 million for the quarter ended March 31, 2009, as compared with combined net income of $760 million for the same period last year.
Nationally, the Farm Credit System reported combined net income of $615 million for the quarter ended March 31, 2009, as compared with combined net income of $760 million for the same period last year.