Non-real estate loan performance strengthened in the fourth quarter. The volume of outstanding non-real estate farm loans at all commercial banks ended the year slightly below 2009 levels. Delinquent non-real estate loans have trended down since early 2010, comprising just 2.0 percent of outstanding farm production loans in the fourth quarter. Also, the volume of non-real estate loans 30 to 90 days past due dropped to its lowest level since 2008. With declining delinquency rates, fourth quarter net charge-offs fell more than 25 percent below year-ago levels.
Loan performance measures for real estate loans improved at year-end. Farm real estate loan volumes at all commercial banks settled 2.0 percent above year-ago levels. After rising steadily during the past three years, the share of nonperforming farm real estate loans eased slightly in the fourth quarter to 2.7 percent. In addition, the volume of real estate loans 30 to 90 days past due leveled off, which could signal further declines in delinquency rates.
Net charge-off amounts grew in the fourth quarter, but they accounted for about the same percentage of outstanding farm real estate loans as last year.
source: Kansas City Federal Reserve Bank