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For Immediate Release
February 27, 2004

AUSTIN, Texas - The Farm Credit Bank of Texas (FCBT), a $7.4 billion wholesale lender, today reported strong earnings for 2003 and one of the largest patronage distributions in the bank's 87-year history.

Bank net income of $64.8 million for 2003 was nearly double the previous year's income of $32.5 million, due largely to the sale of the bank's mineral rights holdings in November 2003-a one-time event.

These strong earnings allowed the Farm Credit Bank of Texas to declare $50.8 million in patronage distributions last year to its stockholders-22 rural financing cooperatives located in Alabama, Louisiana, Mississippi, New Mexico and Texas. These lending associations provide loans and financial services to agricultural producers, agribusinesses, country homeowners and other rural landowners.

"We are extremely pleased that we were able to share our success with our stockholders, who are also our customers, by paying them a substantial patronage on our earnings. That is our way of reducing their effective net cost of borrowing, and it is the single greatest advantage of doing business with a cooperatively owned bank," said Larry Doyle, FCBT chief executive officer.

The bank's gross loan volume of $5.8 billion at Dec. 31, 2003, reflected a modest $8 million increase from Dec. 31, 2002. This figure was impacted by the bank's sale of $300 million in participations in its direct notes from associations in November 2003.

Shareholders' equity at Dec. 31, 2003, totaled $477.6 million, compared with $369.0 million a year earlier. Return on average assets and return on average shareholders' equity for 2003 increased to 0.92 percent and 16.21 percent, respectively, compared to 0.53 percent and 9.43 percent, respectively, for 2002.

In November 2003, the bank issued $100 million in cumulative, perpetual preferred stock in an effort to increase bank capital and fund the expansion of the loan portfolio. Doyle said that in the coming year, the Farm Credit Bank of Texas will continue to streamline its lending practices and strengthen its position as an earnings producer by aggressively pursuing capital markets opportunities involving agribusiness, timber, rural telecommunications and rural utility companies.

The credit quality of the banks' loan portfolio remained exceptionally strong at Dec. 31, 2003, with 99.7 percent of loan volume classified as acceptable. Direct loans to associations accounted for 91.5 percent of the bank's loan portfolio, while purchased participation loans accounted for 7.7 percent of the portfolio.

Established by legislation passed in 1916, the Farm Credit Bank of Texas and its affiliated lending associations comprise the Tenth Farm Credit District. With $7.3 billion in loans outstanding, the Tenth District is the largest rural financing network in the five-state territory it serves.

The Farm Credit Bank of Texas is part of the nationwide Farm Credit System, which reported combined net income of $1.825 billion for the year ended Dec. 31, 2003, as compared with combined net income of $1.773 billion for the prior year.