AGRICULTURAL LENDING INSTITUTIONS

• COMMERCIAL BANKS• FARM CREDIT SYSTEM• FARM SERVICES ADM.• INSURANCE COMPANIES• INDIVIDUALS• INPUT SUPPLIERS

COMMERCIAL BANKS

• IN 2002, FARM BUSINESS DEBT PROVIDED BY COMMERCIAL BANKS ACCOUNTED FOR 17.6% OF REAL ESTATE DEBT AND 21.8% OF NON REAL ESTATE DEBT.

AGRICULTURAL BANKS• 1987 ==> 4480 AG. BANKS 1999==> 2942 AG. BANKS• 1994 ==> 3548 AG. BANKS 2001==> 2744 AG. BANKS• 1995 ==> 3363 AG. BANKS 2002==> 2644 AG. BANKS

WHAT IS AN AG. BANK?FEDERAL RESERVE DEF.A BANK THAT HAS AN AG. LOAN RATIO GREATER THAN THE AVERAGE FOR ALL COMMERCIAL BANKS.

ON 6/30/02 14.97%

FARM CREDIT SYSTEM• THE FARM CREDIT SYSTEM (FCS) IS

MADE UP OF FOUR REGIONAL FARM CREDIT BANKS.

• THESE BANKS PROVIDE FUNDS FOR PRODUCTION CREDIT ASSNS. (PCAs), FEDERAL LAND BANKS ASSNS. (FLBAS), AGRICULTURAL CREDIT ASSNS. (ACAs), AND FEDERAL LAND CREDIT ASSNS. (FLCAs).

• REGULATED BY THE FARM CREDIT ADM., WHICH IS AN INDEPENDENT AGENCY OF THE FEDERAL GOVT.

As of July 1, 2004, the System was composed of the following lending institutions:

Four Farm Credit Banks (FCBs) that provide loan funds to 79 Agricultural Credit Association (ACAs), and 11 Federal Land Credit Associations (FLCAs). ACAS make short-, intermediate-, and long-term loans and FLCAs make long-term loans.

One Agricultural Credit Bank (ACB), which has the authority of an FCB and provides loan funds to 5 ACAs. In addition, the ACB makes loans of all kinds to agricultural, aquatic, and public utility cooperatives and is authorized to finance U.S. agricultural exports and provide international banking services for farmer-owned cooperatives.

• THE FARM CREDIT SYSTEM ACCOUNTS FOR 20.0% OF REAL ESTATE LOANS AND 10.3% OF NON REAL ESTATE LOANS.

• FUNDING IS OBTAINED BY SELLING BONDS IN THE MONEY MARKETS.

TEXAS BANK

• 13 Ag Credit Assns.• TOTAL LOANS AS OF SEPT. 30, 2014 ==>

$12.704 BILLION

• THERE HAS BEEN CONSIDERABLE CONSOLIDATION OF PCAs AND FLBAs IN THE PAST FEW YEARS

FARM SERVICES ADM.

• THE FARM SERVICES ADM. (FSA) WAS FORMERLY THE FARMERS HOME ADM. (FmHA).

• ACCOUNTS FOR 1.7% OF REAL ESTATE LOANS AND 1.8% OF NON REAL ESTATE LOANS.

• HAS BEEN DECREASING IN AMOUNT OF CREDIT PROVIDED.

DEBT (MIL $)

DIRECT GUARANTEED1986 2807.9 1569.1

1990 921.3 1271.9

1995 563.6 1938.3

1999 1288.9 2550.4

2000 1048.1 2674.1

2001 943.6 2314.9

2002 903.6 2650.9

DELINQUENT LOANS (%)

DIRECT GUARANTEED 1986 31.9 5.6

1990 26.9 4.6

1995 27.1 3.9

2000 15.5 4.5

2001 15.2 4.6

2002 15.9 5.9

LIFE INSURANCE COMPANIES

• ACCOUNTS FOR 6.1% OF REAL ESTATE LOANS.

• ONCE WERE MAJOR LENDERS IN THE AGRICULTURAL REAL ESTATE MARKETS.

INSURANCE COMPAYIES CURRENTLY ACTIVE IN

AGRICULTURAL LENDING ARE:

AEGON-USACItigroup InvestmentsAgriFinanceLend Lease Agri-BusinessMetropolitan LifeMONY Life InsurancePrudential

INDIVIDUALS AND OTHERS• ACCOUNTS FOR 9.6% OF REAL ESTATE

LOANS AND 11.2% OF NON REAL ESTATE LOANS.

• NON-TRADITIONAL LENDERS

-- JOHN DEERE

-- FORD NEW HOLLAND

-- PIONEER HI-BREEDS

LEASING AND FINANCING OF

EQUIPMENT AND SUPPLIES.

FARMER MAC

• FEDERAL AGRICULTURAL MORTGAGE CORP.

• PROVIDES A SECONDARY MARKET FOR AGRICULTURAL LOANS.

• POOLS FARM MORTGAGE LOANS AND SELLS THEM TO INVESTORS.

• SIMILAR TO THE GNMA MARKET.