Report Shows Farm & Ranch Lending Increased In 2009

Banks increased farm and ranch lending in 2009, providing the majority of all farm credit, according to the American Bankers Association Center for Agricultural & Rural Banking’s annual Farm Bank Performance Review.

In 2009, the U.S. banking industry held $126 billion in farm loans, which includes $70.3 billion in small farms loans with $25.1 billion of that in very small farm loans, according to the report. In 2008, the banking industry held $123.5 billion in farm loans. The number of small farm loans in 2009 reached nearly 1.3 million, with the vast majority, almost 1 million, under $100,000.

“Banks continue to meet the credit needs of both large and small farms,” said John Blanchfield, senior vice president and director of the association’s Center for Agricultural & Rural Banking.

“Farm banks” are defined by ABA as FDIC-insured banks with assets of less than $1 billion whose ratio of domestic farm loans to total domestic loans is greater than or equal to 13.52% in 2009.

The study, which analyzed the performance of 2,295 farm banks in the U.S., found that farm bank deposits increased 7.5% from $220 billion in 2008 to $237 billion in 2009 with 98.9% of the banks categorized as well capitalized, the highest capital rating given by bank regulators. Despite the challenging economic climate, farm banks increased farm loans by 6.1% holding a total of $58.9 billion in loans by the end of 2009. The number of full-time employees at farm banks increased from 72,942 in 2008 to 76,821 in 2009.

For the full report, go to: aba.com, keyword search “farm lending”.