While reviewing what was deemed a financially successful 2004 for the Federal Land Bank Association of North Mississippi, company leaders cited various new organizational changes to improve the way it transacts business with farmers.

During the company's annual stockholders meeting held in Oxford, Miss., new features mentioned ranged from new branch offices to the adoption of new Web-based technology to improved auditing protection measures.

Ed Hester, chairman of the board, said the bank's overall future goal continues to aim at meeting the needs of “young, beginning and small farmers.”

He reported that during 2004, the bank saw a closing of 347 loans for $73.6 million in new money loaned, two record-breaking statistics.

He described 2004 as a “successful but challenging year” for the company. “Collections were good and we were able to enhance our capital position to a very good level,” Hester said.

In October 2004 the board approved reducing the capital stock requirements on all loans from 2 percent with no cap to 2 percent with a $1,000 cap per loan.

“This amounted to returning over $3.8 million of capital to shareholders,” he said, adding that since 1996, the association has returned over $10.1 million of capital to shareholders.

Gary Gaines, board president, reported that the company's net income in 2004 was $9.3 million, up from $6.7 million in 2003 and $4.5 million in 2002. He said those numbers indicate a significant upward trend.

The board, Hester said, remains committed to offering highly competitive interest rates and returning a portion of interest rates to shareholders annually.

Noting an era in which accounting disclosures are increasingly scrutinized, Hester said having shareholders' confidence in corporate financial statements is crucial.

While the Farm Credit System is exempt from the Sarbanes-Oxley Law — legislation passed in 2002 to flag accounting irregularities, in reaction to recent corporate financial scandals — the Land Bank has begun taking steps to voluntarily submit to external accounting oversights as structured by the Securities Exchange Commission (under the law).

Hester said system leaders believe voluntary compliance will help keep the cost of funds at low levels.

A recent, preliminary exam review held between external auditors and the association's financial committee, Hester added, went “extremely well.”

Hester said the board continues to value the advantages of technology in business operations. He said technology is the “key to helping the Land Bank be competitive.”

Despite the fact that the company's Web site underwent a major upgrade about two years ago, the board has agreed upon a plan for another one in the near future.

That strategy, Hester said, will pivotally incorporate online banking, thus offering patrons a direct access to information on a particular loan in a secure environment.

Financial growth and new business resulted in the company's hiring of four new employees in 2004, in addition to facility relocations and renovations.

Gaines reported that Noxubee and Sunflower counties topped the list of highest loan volume distribution areas. Also, in 2004, most commodity loans were designated for livestock (27.5 percent), followed by cotton (17.6 percent).

Gained noted that the company's credit quality has greatly improved in recent years, improving from a 96.1 percent credit rating in 2003 to a 98.8 percent rating in 2004.