US banks restructure loans, up collateral for stricken farmers
While regional institutions are healthy, they are boosting defences against risks
Chicago/New York — Banks that serve US farmers are increasingly restructuring existing loans and boosting the collateral needed for new ones as the numbers of late and missed payments have risen. While regional banks are healthy, they are clearly boosting their defences against the risks they face. In March, a report by First Midwest Bank in Chicago showed past-due agricultural loans up 287% in 2018 over the previous year. Meanwhile, cases handled by the Iowa Mediation Service involving farmers unable to make payments rose 20%. Bankruptcies of farmers in six Midwest states rose 30% to 103 in 2018, according to the Federal Reserve Bank of Minneapolis. To hold back the tide, Farmers National Bank in Prophetstown, Illinois, is restructuring more and more loans to keep growers solvent while trimming the bank’s own risk. “When you’re a rural community bank, if you’re not involved in agriculture, you probably don’t have a future,” said Don Vogel, the bank’s president and CEO. Farm loans ...
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