How Financially Healthy is Your Bank?

January 8, 2016 12:06 PM
How Financially Healthy is Your Bank?

Whether you bank at a small community bank or a larger institution like Wells Fargo or Rabobank it’s important to make sure they are financially healthy on an annual basis according to Peter Martin of KCOE ISOM.  Bank financial statements are open to the public. At any time you can go to the FDIC website and access what’s called a “Call Report”.

“Depending on how financially savvy the farmer is, they can literally go through and read their bank’s financial statements on internet,” he says.

Martin recommends an easier way of checking on your bank. has created a star rating system,” Martin shares. “One star means your bank is experiencing financial distress, 5 stars means they are as sound of an institution as you’ll find.”

Another way to check out how your bank is doing is to look them up on the internet according to Patrick Hamilton, vice president of Ag Lending for First Financial Bank.

"Do an internet search of your bank and see if there are any stories about what they are doing," he says.

It’s important to make sure all is well because if your bank goes under, you want to be prepared.

“We’ve been in too many situations where a farmer either knew the bank was unhealthy and thought it would improve or were blindsided by their bank’s failure,” he says. “You want to avoid both.”


Back to news



Spell Check

Iowa Ag banker
dubuque, IA
1/12/2016 11:33 AM

  There is nothing worse than having your bank fail. FDIC liquidates credits, IE they will not release funds so you can pay your seed, feed, light bill mortgage payment etc. You will need to find a new bank when no one is actively looking for new credits because they all have the same issue, IE their customers are in financial distress as well and they become very conservative. I've seen lots of 80% loans on 12,000/ac farm ground and 100% financing on cattle barns in the last several years. It has the potential to get ugly in a hurry.

Guy Mills
Ansley, NE
1/9/2016 09:13 AM

  Good article. My family has farmed 139 years in Nebraska and have had 4 banks fail on us. If enough working capital leaves agriculture ,coupled with the fact of extremely large farm operations who may be price sensitive the possibility does exist bank failures may be seen again. An example would be the 9000 head feedlot which lost 500 dollars a head. It is amazing how leveraged a bank really is which is why a vulnerability does exists given the current farm program , currency values between countries which is not allowing the excess supply to be exported which could result in even lower prices for agriculture. Some small banks may only have a few million in paid in capital.

Mike Jacobson
Nort Platte, NE
1/9/2016 03:05 PM

  Keep in mind that although banks can and have failed, the key is knowing what happens if they do. If you are a depositor, you are insured up to $250,000 per (qualified) account. If you are a borrower, your loan terms remain in place. In the 80's the FDIC liquidated banks that were not purchased from the FDIC and did not advance on operation lines and did not refinance matured loans. Today however, failed banks are sold to heathy banks and the closure takes place over a weekend. The transition is virtually seamless to the borrower and saver. I would not get too concerned about this issue.


Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by
Brought to you by Beyer