Farmers had financed their own expenses in recent years due to stimulus packages and strong balance sheets. Now, Wisconsin farmers are increasingly looking to borrow due to high input costs — fuel and fertilizer — and less favorable outlooks for 2023.
When taking a look at Q2 of 2022, farm loans increased 19.27 percent from Q1 and 4.09 percent year over year. This is according to the Wisconsin Bankers Association.
The financial health of Wisconsin banks continued into the second quarter of 2022.
Following a strong start to 2022, Wisconsin banks rounded out the second quarter of the year with total assets up 1.81 percent quarter over quarter from March 31 to June 30 and total assets up 5.54 percent year over year from June 30, 2021 to June 30, 2022, according to the latest numbers released by the Federal Deposit Insurance Corporation.
“Wisconsin banks continue to meet the borrowing needs of consumers and business owners alike,” says WBA President and CEO Rose Oswald Poels. “During this time of heightened inflation and ongoing global concerns, Wisconsinites can feel confident in their bank as a safe place to deposit their money and a trusted partner in meeting their financial goals.”
Total deposits remained stable quarter over quarter (-0.28 percent) and were up 5.76 percent year over year. Noncurrent loans and leases continued on a significant downward trend, indicating consumers’ ability to pay down debt amidst inflation concerns.
Some other notable indicators:
Residential lending increased over 5 percent year over year and quarter over quarter. Despite the Fed’s interest rate hikes, mortgage rates remain at historically low levels.
Commercial lending is back to where it was a year ago after seeing decreases due to supply chain issues and worker shortages. A 7.80 percent quarter-over-quarter increase in commercial and industrial loans indicates business owners’ renewed focus on growth.
Credit quality continues to improve as more borrowers are keeping up to date with their payments. Noncurrent loans and leases decreased 21.33 percent year over year and 11.04 percent quarter over quarter.
See another recent Mid-West Farm Report story with Rose Oswald-Poels: https://www.midwestfarmreport.com/2022/09/06/interest-rates-continue-to-climb/
See another Mid-West Farm Report story on the state of ag lending with Tim Schneider, vice president of ag lending with Nicolet Bank: https://omny.fm/shows/mid-west-farm-report-madison/will-interest-rates-keep-rising
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