AUSTIN, Texas – Farm Credit Bank of Texas (FCBT), a wholesale funding bank that supports agriculture and rural communities with reliable, consistent credit and financial services, reported record net income for the 10th consecutive year in 2015.

In keeping with its philosophy as a customer-owned cooperative, the bank again returned the majority of its earnings to its owners. Based on its solid performance and capital position, the bank’s board of directors approved the return of $137.4 million in patronage and other dividends, or 71 percent of its $192.2 million net income, to the bank’s affiliated lending cooperatives and other stockholders.

This benefit of Farm Credit’s cooperative structure effectively lowers the cost of funds for the bank’s affiliated lenders, enabling them to pass the value along to farmers, ranchers, agribusinesses and other borrower-owners.

The bank’s double-digit asset growth in 2015 resulted in record total assets of $20.0 billion at Dec. 31, 2015, compared with $18.0 billion in 2014. Total loan volume increased $1.5 billion to a record $14.8 billion. The growth contributed to a 2.6 percent increase in net interest income despite pressure on interest rate spreads and an ongoing low rate environment. The bank took advantage of this environment by calling $5.6 billion in debt and issuing new debt at lower rates, reducing its interest expense.

Highly diversified loans and investments are the bank’s earnings engine, generating the stable income necessary to provide dependable credit and services regardless of cycles in the general and agricultural economies.

Through its direct loan portfolio, the bank funds lending institutions that provide financing and related services to agricultural producers and other rural borrowers. The bank also participates with other lenders in capital markets loans to businesses that ag producers and rural communities rely on. Participation loans finance businesses such as food processors, agribusinesses and companies that provide power, water, telecommunications services, and other essential rural infrastructure and services.

“The Farm Credit Act authorizes us to support the breadth and diversity of agriculture and rural communities,” said Larry Doyle, FCBT chief executive officer. “Diversification minimizes risk and contributes to stable earnings, and the more our cooperative earns, the more we return to our borrower-owners in the form of patronage dividends.”

The bank maintained strong asset quality and relatively low risk exposure, benefiting from its sound underwriting standards, careful portfolio management and the strong, diversified economy in its five-state territory. At the end of 2015, 99.9 percent of the bank’s overall portfolio was considered acceptable or special mention.

Cash and investments totaling $5.0 billion provided 200 days of liquidity. The bank finished the year with $1.6 billion in shareholders’ equity and a permanent capital ratio of 17.7 percent.

“With such strong capital, liquidity and asset quality, the bank is well equipped to manage growth or upcoming challenges,” said FCBT Board Chairman Jimmy Dodson. “Another year of excellent earnings helps ensure our long-term health so we can meet the needs of our borrowers today and in the future.”

In 2015 the bank provided funding to 14 rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas, and three other financing institutions.

The bank and its affiliated cooperatives constitute the Texas Farm Credit District, which reported $426.8 million in net income in 2015, second only to the district’s record earnings the prior year. Combined district loan volume increased 9.5 percent to a record $21.2 billion, reflecting strong lending in several sectors such as agricultural real estate, agribusiness, production agriculture and rural homes. The district reported a record $26.6 billion in total assets at the end of 2015.

Together, district institutions declared a record $245.0 million in patronage based on 2015 earnings. Returning earnings in the form of patronage dividends effectively lowers customers’ borrowing costs.

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 $4.69 billion for the year ended Dec. 31, 2015, compared with $4.72 billion a year earlier.

The bank, district and System results discussed herein are preliminary and unaudited.