Agricultural lending from U.S. banks increased nearly six percent in 2017, according to a new report by the American Bankers Association.
Ag lending increased $5.9 billion to $106 billion last year from farm banks, which are defined as banks whose ratio of domestic farm loans to total domestic loans is greater than or equal to the industry average. Total farm and ranch loans from all U.S. banks at the end of 2017 was reported at $180 billion.
ABA says asset quality remained healthy at the nation’s more than 1,800 farm banks as non-performing loans fell to a pre-recession level of 0.52 percent of total loans. However, an ABA spokesperson says the increase in lending shows bankers are “starting to see the effects of a weaker ag sector.”
Meanwhile, more than 96 percent of farm banks were profitable in 2017, with more than 55 percent reporting an increase in earnings. In 2017, farm banks added more than 1,600 jobs, a 1.9 percent increase, and employed more than 88,000 rural Americans.