The Tenth Farm Credit District has passed the $7 billion mark in agricultural and rural mortgage loan volume for the first time in the Austin, Texas-based institution's 86-year history.

In its third quarter financial report, the district reported a loan portfolio of $7.14 billion at Sept. 30, 2003, a 7.1 percent increase over the $6.67 billion reported a year earlier.

The Tenth District, the largest rural lending network in Alabama, Louisiana, Mississippi, New Mexico and Texas, is composed of the Austin-based Farm Credit Bank of Texas (FCBT) and 22 affiliated financing associations.

“The continued growth of our loan portfolio is attributed to the low interest-rate environment of the last two years, enhanced marketing and customer service efforts, and continued demand for real estate in most areas of the district,” said FCBT Chief Executive Officer Larry Doyle.

“Despite a decline in interest income during the first nine months of the year, we successfully reduced our cost of debt to generate positive net interest income,” he said.

District net income for the quarter ended Sept. 30, 2003, totaled $37.8 million, a 12 percent increase over the $33.6 million reported for the third quarter of 2002. Net income for the nine-month period ended Sept. 30, 2003, was $104.7 million, a 14 percent increase over the $92.2 million in net income for the same period of 2002.

District credit quality remained strong, with 97 percent of gross loan volume rated acceptable at Sept. 30, 2003, down only slightly from 97.4 percent acceptable at Dec. 31, 2002, and 97.1 percent acceptable at Sept. 30, 2002. Doyle said that the portfolio benefited from government support to farmers, associations' use of Farm Service Agency guarantees and the availability of off-farm income to a large number of producers.

The bank and associations' combined assets totaled $8.36 billion at Sept. 30, 2003, compared with $7.69 billion at Dec. 31, 2002.