The Farm Credit System reported combined net income of $2.993 billion for the year ended Dec. 31, 2004, as compared with combined net income of $1.825 billion for the prior year. Included in the year-end results were one-time reversals of the allowance for loan losses of $1.167 billion, net of related $95 million tax impact, in connection with the completion of previously announced studies to refine the System's methodologies for determining the allowance for loan losses. Excluding the one-time reversals of the allowance for loan losses, net income would have been $1.826 billion for the year.



Jamie B. Stewart, Jr., President and CEO of the Federal Farm Credit Banks Funding Corporation, commented: "The System continued to achieve favorable results for the year ended Dec. 31, 2004, reflecting a healthy agricultural economic environment. The portion of net income resulting from the reversals of the allowance for loan losses was retained in System capital and has minimal impact on the System's overall level of risk funds -- total capital plus allowance for loan losses. During 2004, the System's risk funds - a measure of our risk-bearing capacity -- increased $1.183 billion to $22.181 billion, which represented 23 percent of System loans at year-end 2004."

Net interest income increased $75 million to $2.994 billion for the year ended Dec. 31, 2004, as compared with $2.919 billion for the prior year. This increase was due to income from a higher level of average earning assets, which was $6.9 billion higher than the prior year, due to growth in loan and investment volumes.



Noninterest income decreased $28 million to $340 million for 2004, as compared with $368 million for 2003. The decline was primarily due to a decrease in gains on sales of investments and other assets, reflecting a $30 million gain on the sale of mineral rights by one Bank in 2003.



Source: Company Release