LOANS AND PARTICIPATIONS

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Ag loans for 2024

2023 Farm Banking Statistics

Rural bankers are pessimistic over these 2024 economic growth expectations for agriculture, with the confidence index falling to 36 from 40.4 in February.  “Higher interest rates, weaker agriculture commodity prices and higher grain storage costs pushed the overall reading to its lowest level since the early months of the pandemic,” said Ernie Goss, chair in regional economics at Creighton’s Heider College of Business. Farmland prices increased for the 52nd straight month. The regional index for farm equipment sales fell below 50 for the ninth time in the past 10 months. The index, which dropped to 30.4, has reached its lowest mark since May 2020. Nearly one-in-three bankers said their bank had tightened credit standards on farm loans. “Higher borrowing costs, tighter credit conditions and weaker grain prices are having a negative impact on the purchases of farm equipment,” Goss said.

Some insightful information from BBWest’s, Kelly Egle, Credit Analyst

According to the American Bankers Association’s 2023 Farm Bank Performance Report, amid high production costs, volatility in commodity prices and a return to pre-pandemic government payment levels, U.S. farm bank’s lending to farmers increased 6.7 percent to $110 billion at the end of 2023, (ALL U.S. banks were at $199 billion of farm loans) with ag production loans at $45.9 billion while loans secured by ag real estate were at $64.1 billion.

U.S. banks made $70 billion of small and micro loans to farms as of December of 2023, with the nation’s 1,442 farm banks holding 639,694 of these small farm loans worth more than $44.6 billion, which includes $9.2 billion in USDA microloans.  (Small and micro loans are defined as loans with an original value of less than $500,000 and $100,000 respectively.) 

ABA Chief Economist Sayee Srinivasan said farm banks had a strong 2023, “with robust loan growth and historically low delinquency rates. Moving forward in 2024, the agricultural sector will continue to face challenges due to monetary policy actions targeting persistent inflation in the U.S., as well as reduced federal support. Nevertheless, farm banks maintained their strong asset quality and consistent growth in high-quality capital, and they remain well-positioned to continue serving the needs of their customers and communities. 

* Information provided here was obtained through
2023 Farm info and 2024 Farm Forecast
Ag Banking Stats from 2023 and going into 2024
2022 Ag "Fun" Facts (2022 is the latest available)

Want to hear more? Kelly has has an article coming out in our June newsletter, make sure you’re signed up to receive it! You can reach out to us here to sign up for the newsletter or to speak to a member of our loan team:

More about our Loans and Participations

Loan Participations
+ Ability to provide credit facilities beyond your lending limits
+ Overline, share-the-risk, and concentration management
+ Services include:
• Real estate loans—term commercial real estate, residential and commercial construction
• Agricultural loans—operating, equipment, and real estate
• Commercial loans—operating lines of credit, equipment, and other financing

Solutions for Financial Institutions
+ Bank stock loans and Reg O loans

Federal Funds Lines of Credit
+ Unsecured or secured

Municipal Leasing Program
+ Our turnkey program designed to help you serve high-profile public sector clients

Paul Harrison
SVP & Chief Credit Officer

Paul has played a vital role in credit administration, special assets, and loan underwriting for BBW since 2009. A longtime banker with a strong lending background, Paul also serves as the correspondent services officer for Arizona-based banks. He currently serves on the board of directors of the Bankers Foundation of Colorado, a charitable organization. When it comes to loan services, you are working with experts in the industry, creating incredible trust, comfort and reliability with your loan needs.