Farm Credit Bank of Texas doubles up

By MONETTE TAYLOR | South Central Texas Edition

Steve Fowlkes

May 6, 2004 -- It could be a sign of good times when the Farm Credit Bank of Texas reports a net income that doubled from the previous year's.

During the Tenth Farm Credit District annual meeting in Austin, earlier last month, the bank reported a net income of over $64 million for 2003, compared to just over $32 million net income in 2002.

The increase is due, largely, to the sale of the bank's mineral rights holding in November 2003. Also, in early 2003, the bank's new chief executive officer, Larry Doyle, came onboard with fresh ideas for the financial entity.

The $8.8 billion credit union is composed of the Farm Credit Bank of Texas and 21 rural financing cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas. It is the largest rural financing network in the five-state territory, with approximately 63,000 loans to agricultural producers, country homeowners, agri-business firms and other rural landowners.

Steve Fowlkes, senior vice president and chief credit officer, stated that be-tween 2002 and 2003, 87 percent of the loans were for real estate, and the other 13 percent were ag-related.

Also, he said that 1,773 agribusiness firms accounted for $50 million or more in sales.

Fowlkes talked about barriers which affect the farm credit system, such as market-based loans pricing and structure; lending practices and processes and overlapping charters of the various

organizations. He advised the organizations to "work together versus the commercial banks," but did say each association will have to make the decision to change or not.

"In a 50-yard dash against others (banks), Farm Credit Bank has a 10-yard headstart," explained Doyle. "We certainly have people with the right stuff ... human capital."

Doyle expressed the importance of training and said that it "improves skills and sets philosophies," and said that Farm Credit Bank should be the "preferred lender to ag, since we have all the options."

Doyle explained there is a need for new ideas to regain the farmers who go to other banks for their funding.

"We are what we do every day and the signals we send," he added. "We don't like to ever lose!"

Buddy Cortese, chairman of the board, said the "fear of new (ideas) can be the most crippling foe," and that everyone needs to stay on top of the new business trends.

Also during the meeting in Austin, the newly-elected Farm Credit Bank of Texas Board of Directors were introduced: Ralph W. "Buddy" Cortese, chairman; Jon "Mike" Garnett, vice chairman; Jimmy Dodson, Kenneth Andrews, William Staats and Joe Crawford.

"As part of the $115 billion federally regulated Farm Credit System, the largest agricultural financing organization in the United States, we benefit from having a dependable and competitively priced source of capital: Our funds come primarily from the sale of System bonds and notes in the nation's money markets," cited in the 2003 annual report.