While small agriculture banks are putting more money into farm mortgages, they are increasingly diversifying their portfolios away from the niche.

In an American Banker study, community banks reported loans secured by farmland dropped to 3.09% of all loans at mid-1995. The study - using data from Sheshunoff Information Services Inc., Austin, Tex. - included 8,462 banks with less than $3 billion in assets.

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