By Ike Wilson, The Frederick News-Post, Md.
April 6--The banking industry continues to be the major source of agricultural credit, providing more than half of all outstanding farm loans, according to the American Bankers Association's annual Farm Bank Performance Report.
The nation's 2,185 farm banks increased farm and ranch lending $3.8 billion or 5.6 percent in 2011, for a total outstanding balance of $72.3 billion.
Several local financial institutions seem to reflect the ABA report.
Though not a bank per se, MidAtlantic Farm Credit, with offices on East Street in Frederick, is marking its 95th year exclusively serving the farming community.
The company's data mirrors the ABA report.
MidAtlantic served more borrowers in 2011 -- 9,682, compared with 9,416 in 2010, President and CEO Bob Frazee said.
The number of customers MidAtlantic served increased during those 12 months, but the company's volume declined slightly during that same time frame. The average loan size declined slightly as well, going from $242,000 to $224,000.
"We attribute that decline to both a generalized reluctance to raise individual debt levels, as well as a larger sign of the strength of the agricultural industry in our area," Frazee said.
But the larger trend for agricultural lending has definitely shown growth, Frazee said in an email.
Looking at the last 10 years, MidAtlantic Farm Credit's volume has increased $1 billion, or 85 percent, Frazee said.
"That's a great indicator of Farm Credit's commitment to agriculture. We serve our marketplace during the up cycles, and the down, and there have certainly been both during the last decade," Frazee said.
Frederick County Bank does not fit the ABA's definition of a farm bank -- an institution with greater than 14.61 percent of total ag loans. However, the bank's agriculture loan portfolio of approximately 3 percent, or $5 million, is concentrated primarily in real estate loans to local farmers, President and CEO Marty Lapera said.
Because agriculture-related credits have performed relatively well during the recession, Frederick County Bank has targeted the local agriculture community as a source of growth, Lapera said.
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