AgTexas Farm Credit Services Reports Record Earnings

LUBBOCK, Texas - AgTexas Farm Credit Services, a local rural financing cooperative, reported strong 2010 financial results, highlighted by the highest level of earnings in its 76-year history.

Record net income of $9.4 million for the year ended Dec. 31, 2010, was nearly triple the previous year’s income of $3.2 million. The increase was attributed largely to a reduction in the cooperative’s cost of funding, as well as to improved weather and market conditions for many AgTexas customers.

“We are extremely pleased with our improved profitability, because it allowed AgTexas to declare $3.1 million in patronage to our customers, who are the owners of the cooperative,” said Mitchell Harris, AgTexas chief executive officer. “Of this amount, a record $2.2 million in cash will be distributed to qualified borrowers in March.”

Since 1994, AgTexas has refunded nearly $39.8 million in patronage to its customer-stockholders, including $27.9 million in cash distributions.

AgTexas also reported increases in capital and in return on members’ equity and return on assets in 2010.

“It is significant that we were able to improve our profitability, in spite of less-than-ideal economic conditions, while maintaining relatively stable interest rates. The strong momentum we achieved last year will continue to move the cooperative forward in 2011,” Harris said.

The lending cooperative reported $543.2 million in gross loans at Dec. 31, 2010, which was a 4.5 percent increase from the previous year. The quality of the loan portfolio remained strong, with 97 percent of loans considered acceptable or “especially mentioned” at year-end 2010. The risk profile of the loan portfolio improved considerably, with high-risk assets declining to $4.7 million at year-end 2010 from $12.8 million a year earlier.

AgTexas is a full-service lender that finances agricultural production, agribusiness, rural land and country homes. It is headquartered in Lubbock and has credit offices in Brownfield, Burleson, Hillsboro, Levelland, Lubbock, Ralls, Seminole and Stephenville.

The cooperative is part of the nationwide Farm Credit System, which reported combined net income of $3.495 billion for the year ended Dec. 31, 2010.