Academic journal article ABA Banking Journal

Banks Saw Ag Lending Growth in 2015

Academic journal article ABA Banking Journal

Banks Saw Ag Lending Growth in 2015

Article excerpt

The nation's farm banks saw agricultural lending increase by 7.9 percent last year, according to the ABA Center for Agricultural and Rural Banking's annual Farm Bank Performance report. The nation's 1,976 farm banks--defined as those whose ratio of domestic farm loans to total domestic loans is greater than or equal to the industry average--held a total of $100.3 billion in agricultural loans at the end of 2015, up from $94.6 billion in 2014.

With declines in farm income expected for 2016, farm banks have prepared for turbulence by increasing the quality of capital and assets. Regionally, farm banks in the South and West saw an increase in profitability in 2015, while banks in the Northeast, corn belt and Great Plains maintained profitability.

"Farm banks saw solid performance in 2015, remain well-capitalized and are well positioned to continue serving the needs of their communities despite any potential turbulence in the ag sector," says ABA Economic Research Director Brittany Kleinpaste.

"Banks hold nearly half of all farm loans and will remain an important source of ag credit. …

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