CHICAGO, Nov 1 (Reuters) - The U.S. Farm Credit System, agovernment sponsored enterprise and the single largest lender toU.S. agriculture, on Friday said third-quarter earnings were up20.6 percent, reflecting the strength in the agriculturalsector.
The System, which uses proceeds from debt securities issuedto domestic and foreign investors to fund farmers andagribusiness, earned $1.253 billion for the quarter endedSeptember 30, versus $1.039 billion for the same period a yearago.
The increase of $214 million "resulted primarily from a loanloss reversal of $32 million, as compared with a provision forloan losses of $121 million for the third quarter of 2012," theFederal Farm Credit Banks Funding Corp, which funds the FarmCredit System's (FCS) securities, said in a statement.
These are prosperous times for U.S. farmers, poised forrecord income in 2013, benefiting from a bin-busting grainharvest. The U.S. Department of Agriculture is projecting netfarm income will reach $120.6 billion this year, up 6 percentfrom 2012.
"Credit quality indicators continued to improve and reflecta 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 1.2percent to $194.2 billion at September 30, compared with $191.9billion at December 31, 2012.
The rise reflected an increase in real estate mortgageloans, offset partially by a decrease in agribusiness loans.Real estate loans rose in the quarter amid strong demand forMidwest crop land while financing needs from farm co-ops easedas grain inventories and commodity prices fell.
Net interest income grew $31 million to $1.669 billion forthe July-September period, compared to 2012.
- Consumer Discretionary
- Farm Credit System