Total agricultural loans at U.S. banks and thrifts grew to $187.22 billion in the 2018 fourth quarter, marking a 2.95% rise year over year and a 0.41% increase from the third quarter.

Farm loans hit $104.88 billion at the end of 2018, a $3.87 billion increase year over year, while agriculture production loans rose by $1.49 billion to $82.34 billion.

Delinquent farm loans accounted for 2.13% of total farm loans at the end of the fourth quarter, up from 2.09% in the previous quarter and 1.92% in the year-ago quarter. Meanwhile, 1.51% of agriculture production loans were past due or in nonaccrual status as of Dec. 31, 2018, compared to 1.52% at Sept. 30, 2018, and 1.30% at the end of 2017.

Reno, Nev.-based John Deere Capital Corp. remained the nation's largest agricultural lender among banks and thrifts, with $15.0 billion in total agricultural loans at Dec. 31, 2018.

Agricultural loans at Lodi, Calif.-based Farmers & Merchants Bancorp, the country's 16th-largest agricultural lender, jumped 12.6% year over year, helped by F&M's acquisition of Rio Vista, Calif.-based Bank of Rio Vista in October 2018. After the deal closed, Farmers & Merchants' total assets reached approximately $3.4 billion, and the bank had with 30 locations serving California's Central Valley and the San Francisco East Bay Area region.

In the bank's third-quarter Form 10-Q, F&M noted that its expansion into the East Bay area of San Francisco and Napa would allow it to diversify from the mid-Central Valley area, "a region that can be significantly impacted by the seasonal needs of the agricultural industry."

F&M's quarterly report also pointed to a number of macroeconomic factors impacting the agricultural industry in California and the nation as a whole. F&M noted that while 2017 and 2018 were better years for rainfall in California, the state's weather patterns over the last five years "further reinforce the fact that the long-term risks associated with the availability of water are significant." F&M also mentioned that changes in national trade policies are challenging the export market and tighter immigration policies are impacting the availability of labor.

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