Capital Briefs: Farm Lenders Raise Loan-Loss Reserves 25.6%

themselves against credit losses during tough times for farmers, according to an analysis by the American Bankers Association. Loan-loss reserves held by farm banks rose 25.6% in 1998 from the previous year, to $367.2 million. The 2,951 farm banks are defined as institutions with less than $500 million of assets and with at least 16.22% of loans in farm real estate or production.

These banks also increased lending to other sectors, such as residential real estate, and bolstered capital with strong retained earnings, according to Keith Leggett, the ABA's senior economist. Earnings increased 3.3%, to $2 billion last year. -- Katharine Fraser