The Tenth Farm Credit District, the largest rural lending network serving Texas, New Mexico, Alabama, Louisiana and Mississippi, recently reported record loan volume and net income for the year ended Dec. 31, 2002. The “strong” financial results, district officials say, occurred in spite of a weak economy, tight agricultural export markets and adverse weather conditions in some parts of the district during 2002.

The district comprises the Austin-based Farm Credit Bank of Texas and 22 financing cooperatives in the five-state region.

Gross loan volume totaled $6.796 billion at year-end 2002, representing an increase of 13.1 percent and 29.8 percent from Dec. 31, 2001 and 2000, respectively. This was the eighth consecutive year that district loan volume reached a new record level.

All of the loan volume growth last year occurred in the district's mortgage portfolio, which totaled $5.850 billion at Dec. 31, 2002. The increase is attributed to aggressive marketing by district associations, improved customer service and the low interest-rate environment, which kept land values stable and fueled demand for rural real estate outside urban areas.

In addition, the bank and associations increased their loan volumes by participating together in large loans.

The overall quality of the district's loan portfolio remained strong, with 97.4 percent of loan volume at Dec. 31, 2002, classified as “acceptable.” Total high-risk assets decreased by 24.8 percent from $90.1 million at Dec. 31, 2001, to $67.8 million at Dec. 31, 2002.

District net income totaled $128.1 million for the year ended Dec. 31, 2002, reflecting an increase of 14.3 percent from net income of $112.1 million for the previous year. Net interest income increased by 14.2 percent from 2001 to total $237.0 million for 2002.

As customer-owned financing cooperatives, the Farm Credit Bank of Texas and its affiliated local lending associations place a high priority on sharing their success with their customers, district officials say. In 2002, the district returned $26.1 million in patronage and dividend distributions to stockholders, compared with $25.2 million in distributions in 2001.

The Farm Credit Bank of Texas provides funds and services to 10 Federal Land Credit Associations, which provide rural mortgage financing, and 12 Agricultural Credit Associations.