The Farm Credit System, of which Mississippi Land Bank is a part, is “a good example of what the federal government can do when it does things right,” says Abbott Myers, chairman of the board of the land bank serving north Mississippi.
The national Farm Credit System is celebrating its 100th anniversary this year, he said at the annual stockholder meeting of Mississippi Land Bank. “In the early 1900s, it was difficult for farmers to get long term loans from banks. FCS was founded as a stockholder owned banking organization, with the mission of providing capital to farmers and ranchers at attractive interest rates.
“I’m proud of what FCS has accomplished over the last century, and of the contributions of the dedicated people who have been a part of the growth and success of Mississippi Land Bank.”
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Myers, a grains farmer at Dundee, Miss., recalled, “My grandfather farmed cattle and cotton. In the fall, he’d go to Memphis to sell his cotton, and would come back on the train to Dundee with a duffel bag full of cash. The reason: If he took his payment in a check, the local bank would charge him a percentage of the check to cash it. There wasn’t much money in farming in those days, and that 3 percent to 4 percent bank charge made a difference in what he had to operate and live on. Everyone was operating on cash to keep from paying those charges.
“Capital is a tool, and we in agriculture use a lot of it,” he says. “Mississippi Land Bank specializes in agricultural loans. Commercial banks sometimes go in and out of the land lending business. Farmers want to work with an institution that’s there for them year-in and year-out, to know that credit will be available for them — and their children and grandchildren, if they choose to farm.
Mississippi Land Bank isn’t subsidized by the government, Myers points out. “We were established with a loan, and we paid that back. We had to borrow more money during the difficult times of the 1980s — which we paid back, at the going rate of interest. We compete for business just like every lending institution.”
Mississippi Land Bank is now a $620 million institution, he says. “We had another great year in 2015, with strong growth. Our long term loans grew 6.2 percent; short term loans grew 12.6 percent. We have a solid capital/assets ratio of 15.6 percent. Our successful loans, at 99.1 percent, is outstanding. Our operating efficiency is excellent, thanks to our knowledgeable, well-trained staff, who know every facet of agriculture and make good, solid loans.”
A foundation for continuing growth
In February, Myers says, Mississippi Land Bank returned $2.5 million in dividends to stockholders. “Since 1996, we’ve paid $27.1 million back to our stockholders. Our philosophy on dividends is to lend money to our customers at the lowest possible interest rate, and if we make a profit, we give it back in dividends. It’s a more efficient process, and our customers get the best rate possible.”
Myers lauded the service of Gary Gaines, who retired as the organization’s CEO at the end of January, after 41 years with the Farm Credit System.
“In the early 1990s, coming off the difficult 1980s, Mississippi Land Bank was reorganizing and our balance sheet was a great big goose egg —zero. When Gary left two months ago, our loan balance was $621 million. He has laid a great foundation for our continuing growth and service to north Mississippi agriculture. He has been a mentor, a dear friend to all of us, and we wish him the best in his retirement.
“We’re excited about the future under the leadership of our new CEO, Craig Shideler. He has been a part of the organization for many years, knows our business intimately, and will build on the foundation that Gary has established. We look for bright things happen in the years ahead under his guidance.
In his report to the stockholders, Shideler noted that the bank had $8.9 million in income for 2015, “and we’re continuing to grow our balance sheet. We’re at $620 million, with almost $105 million in net worth/member equity/liquidity. We’re in good position for the ‘rainy day’ that we know is possible in agriculture. We don’t think this downturn is going to be as severe as the 1980s, but there will be challenges ahead, and we feel we’re in good position to meet them.
“The quality of our portfolio is excellent. Our branch bank performance has been outstanding; new money loaned continues to grow. We closed almost $156 million in new loans in 2015, for a growth rate of 6.8 percent. Our credit quality is 99.10 percent — that’s really strong, and we’re quite proud of it, given the economic situation that exists in agriculture today.”
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As part of the organization’s community outreach, Shideler says, “We continued our scholarship program, with awards going to 10 students who are enrolled in Mississippi universities and community colleges.
“In observance of the 100th year anniversary of the Farm Credit System, which was founded July 17, 1916, we gave away, through our branch offices, 10,000 sawtooth oak trees to be planted by individuals and community organizations within our territory. It’s a beautiful tree that’s deep-rooted, symbolic of the deep roots of the Farm Credit system.”
Mississippi Land Bank is headquartered at Senatobia, Miss., with 10 additional offices throughout northern Mississippi: Clarksdale, Cleveland, Corinth, Houston, Indianola, Kosciusko, Louisville, New Albany, Starkville and Tupelo.
Although most lending decisions are made by local staff members, the Mississippi Land Bank is a part of the nationwide Farm Credit System and is affiliated with the Farm Credit Bank of Texas, located in Austin, Texas.