An Analysis of Factors that Affect the Quality of Federal Land Bank Loans

William E. Hardy, Stanley R. Spurlock, Donnie R. Parrish and Lee A. Benoist

Journal of Agricultural and Applied Economics, 1987, vol. 19, issue 2, 175-182

Abstract: Financial conditions existing in agriculture are placing severe pressure on lenders as well as borrowers. Data from both good and foreclosed Federal Land Bank loans were analyzed to determine the most important characteristics leading to the failure of loans. The analysis was completed by comparing means through t-tests and the development of a discriminant model. The ratio of total debt service to total income, the debt to asset ratio, the ratio of total loan amount to appraised value, and the ratio of acres in security to acres owned were determined to be the most important discriminating variables.

Date: 1987
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