How the Composition of U.S. Commercial Banks Participating in Agricultural Lending has Changed Since 2007

According to data from the Federal Deposit Insurance Corporation, unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter of 2024, primarily driven by higher mortgage rates impacting the fair market values of mortgage-backed securities (FDIC Quarterly Banking Profile 2024Q4). Although almost 17 years have passed since the Great Financial Crisis, the U.S. banking industry has recovered and appears resilient, despite rising commercial real-estate concerns (Kollmeyer, 2024). Over this period, the total assets of FDIC-insured commercial banks have doubled, increasing from $11.079 trillion in 2007 to $22.361 trillion in 2023 (FDIC BankFind Suite). Among the assets held by commercial banks, agricultural loans have also increased in size. In this article, we will compare how agricultural lending by FDIC-insured commercial banks has evolved since 2007. Two lending specialization categories are defined since some commercial banks extend more credit for agricultural purposes than others. Commercial banks whose sum of farmland and production loans exceeds 25% of their net loans and leases are defined as agricultural banks, while all others are defined as non-agricultural banks.