Nonperforming farm loans remain at pre-recession levels

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U.S. farm banks increased agricultural lending by 5.3%, or $5.5 billion, to $108 billion in 2018, according to the American Bankers Association’s annualFarm Bank Performance Report. The report — an analysis by ABA’s economic research team based on data from the Federal Deposit Insurance Corp. — examines the performance of the nation’s 1,772 banks that specialize in agricultural lending. ABA defines farm banks as banks whose ratio of domestic farm loans to total domestic loans is greater than or equal to the industry average. Farm banks’ asset quality was healthy and nonperforming loans stayed at a pre-recession level of 0.52% of total loans. More than 94% of farm banks were profitable in 2018, with more than 63% reporting an increase in earnings. In the Corn Belt, 842 farm banks increased farm loans by 5.24% to $47.9 billion. Ag production loans increased 3.31% and farmland loans rose 6.88%. Click here to read the full report.