PROFITABILITY AND RISK OF U.S. AGRICULTURAL BANKS

James Epperson and Feng Zhang

No 35491, 2005 Annual Meeting, February 5-9, 2005, Little Rock, Arkansas from Southern Agricultural Economics Association

Abstract: Study of profitability and risk of agricultural banks is very important in assessing the ability to adequately finance agricultural production and rural development. A recursive system of profitability and risk equations is estimated to compare the performance of agricultural with nonagricultural banks and to identify factors which affect performance. A linear regression model which measures risk-adjusted profitability confirms the results from the recursive system. Results show that agricultural banks perform better than nonagricultural counterparts on average even after controlling for risks and other factors. Further, off-balance-sheet business is found to be negatively related to the risk-adjusted profitability of agricultural banks.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 16
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saeafl:35491

DOI: 10.22004/ag.econ.35491

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