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For Immediate Release
March 6, 2002

AUSTIN, Texas - The Tenth Farm Credit District today announced solid financial results for the year that ended December 31, 2001.

The district is composed of the Austin-headquartered Farm Credit Bank of Texas (FCBT) and 22 local credit cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas. It is the largest rural financing organization serving the five-state region.

Gross loan volume totaled $6.009 billion at December 31, 2001, a 14.8 percent increase from the $5.236 billion in loan volume reported a year earlier. This loan volume growth came from the district's mortgage loan portfolio, which totaled $5.041 billion at year-end 2001, up 19.1 percent from the $4.233 billion reported at year-end 2000.

"Declining interest rates kept the district in a very competitive position throughout the year and contributed to a stable rural real estate market in spite of a downturn in the general economy. These factors, combined with increased marketing and customer service efforts, contributed to a 45 percent increase in new mortgage business last year," said Arnold Henson, FCBT chief executive officer.

The short- and intermediate-term agricultural loan portfolio totaled $968.2 million at December 31, 2001, down 3.5 percent from $1.003 billion at December 31, 2000. This decrease resulted largely from newly formed Agricultural Credit Associations transferring loans qualifying as long-term mortgages from their Production Credit Association subsidiaries to their Federal Land Credit Association subsidiaries.

The quality of the district's loan portfolio remained extremely high last year, declining only slightly to 97.5 percent classified as acceptable at December 31, 2001, from 97.6 percent acceptable at year-end 2000.

The district's net income totaled $112.1 million for the year ending December 31, 2001. This compares with $80.2 million in net income the previous year. Net interest income totaled $208.4 million in 2001, an increase from the $192 million reported in 2000. The district's return on average assets increased to 1.83 percent for the year ending December 31, 2001, from 1.48 percent for the prior year.

Farm Credit lenders follow the cooperative principle of sharing a portion of their earnings with their borrower-stockholders. For the year that ended December 31, 2001, approximately $25.2 million in cash dividends and patronage distributions have been paid or declared for payment to Tenth District stockholders.

Pointing out that many producers relied on federal support payments to help meet their debt obligations in 2001, Henson said the lack of a new Farm Bill is creating uncertainty for a majority of farmers. "As the 2002 planting season gets underway, we also remain concerned about ongoing large supplies of commodities and weak export markets," he added. "It is encouraging, at least, to know that pasture and planting conditions in most parts of our district are the best they have been in the last several years."

The Tenth District's 22 local lending cooperatives include 12 Agricultural Credit Associations, which make short-, intermediate- and long-term loans, and 10 Federal Land Credit Associations, which provide long-term mortgage financing. Together, these lenders have nearly 60,000 loans outstanding to farmers, ranchers, agribusiness operators, and rural homeowners and landowners.

The Tenth Farm Credit District is part of the nationwide Farm Credit System. The System reported combined net income of $1.785 billion for the year ending December 31, 2001, as compared with combined net income of $1.422 billion for the prior year.