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Source: American Bankers Association news release

Farm banks significantly increased agricultural lending by 9 percent in 2013 and held $87.8 billion in farm loans at the end of the year, according to the American Bankers Association's annual Farm Bank Performance Report.

Asset quality continued to improve at farm banks as non-performing loans declined to 1.22 percent of total loans, close to pre-recession levels. ABA defines farm banks as banks whose ratio of domestic farm loans to total domestic loans is greater than or equal to the industry average.

"There are some headwinds forecasted for the agricultural economy in 2014, but farmers and their bankers are in good shape to weather any storm that may be brewing," said John Blanchfield, senior vice president and director of ABA's Center for Agricultural and Rural Banking. "Banks remain the most important source of ag credit, holding nearly half of all farm loans."

Blanchfield noted that banks of all sizes - not just farm banks - provide farmers and ranchers with the credit they need. Total bank farm and ranch lending was $149 billion at the end of 2013.

Farm banks continued to build high quality capital over the year. At the end of 2013, over 99 percent of all farm banks met the regulatory requirement for being well-capitalized.

In addition, more than 96 percent of farm banks were profitable in 2013, with over half reporting an increase in earnings.

"As vital, tax-paying members of their communities, farm banks provide critical funding to support rural Americans while adding jobs and boosting the agricultural economy," said Blanchfield.

Small and micro-small loans made up almost half of bank agricultural lending in 2013. The nation's 2,152 farm banks farm banks also added nearly 2,000 jobs, a 2.1percent increase, and employed 91,900 rural Americans. Since 2007, employment at farm banks has risen 15.1 percent.

The Farm Bank Performance Report also provides regional summaries:

The Northeast region's 10 farm banks increased farm loans by 21.7 percent to $503 million. Ag production loans rose 7.3 percent and farmland loans rose 30.3 percent.

The South region's 224 farm banks increased farm loans by 6.5 percent to $6.6 billion. Ag production loans rose 11.4 percent and farmland loans rose 4.8 percent.

The Cornbelt region's 1,014 farm banks increased farm loans by 9 percent to $38.4 billion. Ag production loans increased 9.7 percent and farmland loans rose 8.3 percent.

The Plains region's 828 farm banks increased farm loans by 9.3 percent to more than $33.9 billion. Ag production loans increased 9 percent and farmland loans rose 9.7 percent.

The West region's 76 farm banks increased farm loans by 10.3 percent to $8.3 billion. Ag production loans increased 12.3 percent and farmland loans rose 8.6 percent.

Read the 2013 Farm Bank Performance Report

Watch ABA's John Blanchfield and two ag bankers - Kreg Denton, senior vice president, First Community Bank, Fancy Farm, Ky. and Nate Franzen, president, Ag Division, First Dakota National Bank, Yankton, S.D - discuss the report and the outlook for 2014. Click here.

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