The nation’s farm banks increased agricultural lending by 5.3 percent, or $5.5 billion, to $108 billion in 2018, according to the ABA’s annual Farm Bank Performance Report released Tuesday. With non-performing loans remaining at a pre-recession level of .52 percent of total loans, asset quality was also healthy among the nation’s 1,772 farm banks.
“Even in the face of a slowing ag economy and harsh weather, farm banks continue to perform strongly while meeting the credit needs of farmers, ranchers and their communities,” said ABA Chief Economist James Chessen. “They play a critical role in the success of farms large and small, and their civic engagement and the jobs they provide make them the lifeblood of many rural communities across the country.”
More than 94 percent of farm banks were profitable in 2018, with more than 63 percent reporting an increase in earnings, according to the report. Farm banks also served as job creators, adding more than 1,500 jobs in 2018, a 1.8 percent increase, and employing more than 86,000 rural Americans. Since 2008, employment at farm banks has risen 24.4 percent.
Farm banks—defined by ABA as banks with ratios of domestic farm loans to total domestic loans greater than or equal to the industry average—also continued to build high-quality capital throughout 2018. Equity capital increased 6.1 percent to $48.7 billion, while Tier 1 capital increased by $3.3 billion to $46.7 billion. Read the report.