2020 Farm Bank Performance Report

This paper examines the 2020 performance of the 1,642 banks that specialize in lending to agriculture. These farm banks employ 81,000 workers.

Key Findings

• The banking industry is the nation’s most important supplier of credit to agriculture providing approximately 50% of all farm loans in the U.S.—$174 billion as of December 2020.
• Small loans continue to make up almost half of bank farm and ranch lending with $71 billion in small and micro farm and ranch loans on the books at the end of 2020.
• Farm banks held 172,818 PPP loans worth $12.7 billion on their balance sheets at year end 2020, highlighting a commitment to supporting the local workforce and communities.
• The nation’s 1,642 farm banks recorded strong asset quality and capital levels in 2020 through serving their communities and sticking to traditional banking practices: a focus on the fundamentals of credit, solid underwriting standards and knowledge of the customer’s business.
• Farm banks have deep roots in their communities. The median farm bank will be 111 years old in 2021.
• Farm banks’ asset quality improved slightly in 2020 despite a struggling ag economy (as consolidation and cash payments aided the paydown of loans by farmers). Noncurrent ag loans as a share of total lending (loans 90 days or more past due or in nonaccrual status) dropped by 3 basis points to 0.99% in 2020.
• As a group, farm banks, remained well-capitalized through 2020, as these banks raised equity capital — a more conservative form of capital - by $4.3 billion, or 9.0%.
• In 2020, these farm banks increased employment by 2.4%, adding almost 2,000 jobs, and employing 81,000 rural Americans. Since 2010, employment at farm banks has risen 26.4%.
• 97.1% of farm banks were profitable in 2020, with 51.3% reporting an increase in earnings.