Farm Credit Bank of Texas, part of the Farm Credit System, the single largest source of loans in the USA for agriculture, agribusiness, rural real estate and country homes, has made a significant investment in powerful commercial lending software from Misys, the global application software and services company.
The move will help the bank to record and service increasingly complex capital market transactions in its rapidly growing farm credit business.
The lender will initially implement Misys Loan IQ, a comprehensive software solution that covers the entire life cycle of commercial loans, at its Austin, TX head office. The platform will enable more streamlined processing of complex loan deals, participations and syndicated loan transactions across back and middle office operations, and improve accounting and risk management. Affiliated lenders located in Alabama, Texas, Louisiana, Mississippi, and New Mexico are also expected to adopt Misys Loan IQ in the future.
Surging commodity prices and growth in the U.S. agricultural sector have contributed to an increase in demand for complex transactions in the farming loan industry. According to The Farm Credit Administration (FCA) the independent government agency responsible for regulating and supervising the banks, associations, and related entities in the Farm Credit System (FCS or System), gross loan volumes have grown 54% since 2003.
In turn, Farm Credit Banks' capital markets group, which provides capital and liquidity for food and agribusiness firms, rural utilities and rural communications companies, has experienced 156 per cent growth in loan volumes over the past three years. This has created a pressing need to scale up its systems.
Allen Buckner, VP of Lending Systems at Farm Credit Bank of Texas comments: "We operate in a market that involves a broad range of stakeholders, from various lending institutions to farmers, ranchers, agribusiness firms and country homeowners - as well as capital markets customers so our systems need to be extremely robust and scalable. This globally proven Misys solution enables us to process complex deals, participations, and syndicated loan transactions much faster with more emphasis on risk management
Misys was chosen as a strategic partner after a review of competitive software solutions, including Fidelity's ACBS Loan Systems. The new system is projected to 'go-live' at the bank in July 2009.
Ken Katz, Global Solutions Manager for Misys Loan IQ in Misys' Solutions for Treasury & Capital Markets business comments: "We all know about the current squeeze in US credit markets, but this deal shows how banks can use technology to innovate and offer new services to their customers in sectors that are still growing. Also, throughout the commercial lending world, the trend is still towards multiple lenders, multi-tiered deals and frequently changing market drivers, so it is increasingly important for financial institutions to leverage front-to-back platforms when managing their portfolios."
Misys Loan IQ, part of Misys' Solutions for Treasury & Capital Markets portfolio, currently handles one third of the world's syndicated loans and half of the world's secondary loan trades. Misys Treasury & Capital Markets has 18 years of loan market experience and unrivalled software development expertise. It creates integrated, comprehensive solutions for financial institutions to manage their capital market activities across multiple asset classes.