Amid the wake of the U.S. property meltdown of the late 2000s, JPMorgan hunted for brand new ways to develop its loan business beyond the troubled mortgage trade. The nation’s most significant financial institution found attractive new opportunities in the agricultural Midwest – lending to U.S. farmers who had plenty of revenue and collateral as costs for grain and farmland soared.
JPMorgan grew its farm-mortgage portfolio by 76%, to $1.1 billion, between 2008 and 2015, in accordance with year-end figures, as different Wall Street players gathered into the sector. Total U.S. farm debt is on track to rise to $427 billion this year, up from an inflation-adjusted $317 billion a decade before and approaching ranges seen in the Nineteen Eighties farm crisis, based on the U.S. Division of Agriculture.
However, now – after years of dropping farm earnings and a heightening U.S.-China trade battle – JPMorgan and different Wall Street banks are heading for the exits, under evaluation of the farm-loan holdings they reported to the Federal Deposit Insurance Company (FDIC).
The agricultural mortgage portfolios of the country’s prime 30 banks plunged by $3.9 billion, to $18.3 billion, between their peak in December 2015 and March 2019, the evaluation confirmed. That’s a 17.5% decline.
Reports recognized the largest financial institutions by their quarterly filings of mortgage performance metrics with the FDIC and grouped banks owned by the same holding firm. Total assets rated the banks in the first quarter of 2019.
The removal from agricultural lending by the nation’s most significant banks, which has not been previously recorded, comes as shrinking cash flow is driving some farmers to retire early and others to declare chapter, according to farm economists, authorized experts, and an overview of hundreds of lawsuits filed in federal and state courtrooms.