Farm banks increased agricultural lending by 5.3 percent in 2016 and held $103.4 billion in farm loans at the end of the year, according to the American Bankers Association’s annual Farm Bank Performance Report.
Asset quality remained healthy at the nation’s more than1,900 farm banks as non-performing loans have fallen to a pre-recession level of 0.54 percent of total loans.
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. An ABA spokesperson stated: “We’re continuing to see a decline in farm income, but the good news is farm banks are in good shape to assist their farm and ranch customers as the ag economy takes a turn.”
At the end of 2016, banks held $176 billion in farm and ranch loans. In addition, more than 97 percent of farm banks were profitable in 2016, with 60 percent reporting an increase in earnings.