| For Immediate Release November 4, 2008 |
For more information, contact: Stan Ray, Vice President of Marketing and Corporate Affairs (512) 465-0577 |
Farm Credit Lenders Report Strong Third Quarter Results
AUSTIN, Texas – The Farm Credit Bank of Texas and its 19 affiliated rural lending cooperatives today reported strong third-quarter financial results.
Combined net income totaled $73.3 million for the third quarter and $218.4 million for the nine months ended Sept. 30, 2008, reflecting increases of 10.9 percent and 23.0 percent, respectively, from the same periods of 2007. The increases were driven primarily by higher net interest income.
Gross loan volume of $16.5 billion at Sept. 30, 2008, was up 9.4 percent from year-end 2007 and up 14.5 percent from a year earlier.
The Austin-based bank and 19 financing cooperatives, collectively known as the Tenth Farm Credit District (Tenth District), comprise the largest rural lending network in Alabama, Louisiana, Mississippi, New Mexico and Texas.
The third quarter was highlighted by two events that signified the Tenth District’s continued strength. In August, Moody’s Investor Service upgraded the Farm Credit Bank of Texas’ issuer rating to Aa2 from Aa3 and gave the bank an A1 subordinated-debt rating. In September, the bank issued $50 million in subordinated debt.
Tenth District credit quality remained strong, with 97.5 percent of loans classified as acceptable at Sept. 30, 2008. Nonaccrual loans represented 0.96 percent of the loan portfolio at Sept. 30, 2008, compared with 0.54 percent one year earlier.
"We are very pleased with these latest financial results, especially in light of the instability in the global financial sector," said Larry Doyle, FCBT chief executive officer. "Because of our sustained profitability, Farm Credit continues to have access to the financial markets and remains attractive to investors, who provide the funds that we ultimately loan to our customers."
At the end of the third quarter of 2008, all Tenth District lending institutions exceeded regulatory liquidity requirements. Cash and investment securities comprised 14.3 percent of the district’s assets, which totaled $19.7 billion at Sept. 30, 2008. Member equity in the district lending cooperatives totaled $2.4 billion at quarter-end.
"While it’s difficult to predict how the current global credit crunch will impact our nation’s rural economy, the Farm Credit System remains strong and focused on fulfilling our mission: to be a reliable source of credit for agriculture and rural America," said Ralph W. Cortese, FCBT board chairman.
The Tenth District is part of the Farm Credit System, established by Congress in 1916. The borrower-owned Tenth District lenders provide loans and financial services to agricultural producers, agribusiness firms, country homeowners and other rural landowners.
The largest rural lending network in the nation, the System reported combined net income of $817 million and $2.37 billion for the three and nine months ended Sept. 30, 2008. This compares with combined net income of $727 million and $2.02 billion for the same periods last year.