ABA Report: Farm Banks Well-Positioned for 2014

2013 was a year of solid performance and strong asset quality for farm banks, who significantly increased agricultural lending by 9% and held $87.8 billion in farm loans at the end of the year, according to the American Bankers Association’s (ABA) annual Farm Bank Performance Report.

Asset quality continued to improve at farm banks as non-performing loans declined to close to pre-recession levels. 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.

Banks of all sizes—not just farm banks—provide farmers and ranchers with the credit they need, said the senior vice president and director of ABA’s Center for Agricultural and Rural Banking.

Throughout 2013, farm banks built high-quality capital, the ABA report said. By the end of the year, banks’ total farm and ranch lending was $149 billion, and over 99% of all farm banks met regulatory requirements for being well-capitalized. In addition, more than 96% of farm banks were profitable in 2013, with over half reporting an increase in earnings.

Small loans and microloans made up almost half of bank agricultural lending in 2013. The nation’s 2,152 farm banks also added nearly 2,000 jobs and employed 91,900 rural Americans.