Wednesday, November 13, 2013

How Have CU Farm Loans Performed?

Yesterday, I wrote about the level of farm lending at credit unions. Today, we will review how farm loans have performed at credit unions.

As of June 30, 2013, credit union reported slightly less than $14.2 million in delinquent farm loans. A loan is deemed delinquent, if it is 60 days or more past due. The delinquency rate was 0.62 percent.

Four credit unions accounted for over 40 percent of the industry's total delinquent farm loans.
  • Greater Oregon (OR) had $1.9 million in delinquent farm loans (65.2 percent of its farm loan portfolio).
  • North Star Community (ND) had $1.5 million in delinquent farm loans (3.45 percent of its farm loan portfolio).
  • Whitefish Community (MT) had almost $1.3 million in delinquent farm loans (35.3 percent of its farm loan portfolio).
  • Amplify (TX) reported $1 million in delinquent farm loans (97.2 percent of its farm loan portfolio)
Credit unions reported only $286,000 in net farm loan charge-offs through the first six months of 2013.

The strong performance of the agricultural loan portfolio at credit unions is not surprising given the strength in the farm economy. The U.S. Department of Agriculture reported that net farm income is forecasted to be $120.6 billion in 2013, up 6 percent from 2012’s estimate of $113.8 billion. After adjusting for inflation, 2013’s net farm income is expected to be the second highest since 1973.

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