U.S. Farm Credit says quarterly earnings up 20.6 pct
CHICAGO Nov 1 (Reuters) - The U.S. Farm Credit System, a government sponsored enterprise and the single largest lender to U.S. agriculture, on Friday said third-quarter earnings were up 20.6 percent, reflecting the strength in the agricultural sector.
The System, which uses proceeds from debt securities issued to domestic and foreign investors to fund farmers and agribusiness, earned $1.253 billion for the quarter ended September 30, versus $1.039 billion for the same period a year ago.
The increase of $214 million "resulted primarily from a loan loss reversal of $32 million, as compared with a provision for loan losses of $121 million for the third quarter of 2012," the Federal Farm Credit Banks Funding Corp, which funds the Farm Credit System's (FCS) securities, said in a statement.
These are prosperous times for U.S. farmers, poised for record income in 2013, benefiting from a bin-busting grain harvest. The U.S. Department of Agriculture is projecting net farm income will reach $120.6 billion this year, up 6 percent from 2012.
"Credit quality indicators continued to improve and reflect a healthy System loan portfolio. Capitalization remains strong," Tracey McCabe, CEO of FCS' Funding Corp, said in a statement.
The system said gross loans rose $2.3 billion, or 1.2 percent to $194.2 billion at September 30, compared with $191.9 billion at December 31, 2012.
The rise reflected an increase in real estate mortgage loans, offset partially by a decrease in agribusiness loans. Real estate loans rose in the quarter amid strong demand for Midwest crop land while financing needs from farm co-ops eased as grain inventories and commodity prices fell.
Net interest income grew $31 million to $1.669 billion for the July-September period, compared to 2012.