Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-23T16:38:04.887Z Has data issue: false hasContentIssue false
  • English
  • Français

Independent Commercial Bank Mergers and Agricultural Lending Concentration

Published online by Cambridge University Press:  28 April 2015

Bruce L. Ahrendsen ,
Bruce L. Dixon  and
LaDerrek T. Lee
Bruce L. Ahrendsen
Affiliation:
University of Arkansas
Bruce L. Dixon
Affiliation:
University of Arkansas
LaDerrek T. Lee
Affiliation:
Federal Reserve Bank of Kansas City
Get access Rights & Permissions [Opens in a new window]

Abstract

In an era of rapid consolidation in banking, the effect of mergers on the availability of credit to agricultural businesses is unclear. Commercial bank mergers have profoundly altered the urban credit marketplace and are positioned to do the same for the agricultural credit marketplace. Adjustment models are estimated with data on independent bank consolidations from 1988 through 1995. The regression results bode well for agricultural lending if acquiring banks have larger concentrations of assets in agriculture than acquired banks. Conversely, if acquiring banks have smaller concentrations than acquired banks, acquisitions have a negative impact on agricultural lending. Since most acquiring banks have smaller agricultural loan concentrations than acquired banks, there is concern for agricultural lending. However, other lenders are likely to fill credit gaps that develop.

Keywords

acquisitionagricultural loan portfoliobanksconsolidationmerger
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 31 , Issue 2 , August 1999 , pp. 215 - 227
Copyright
Copyright © Southern Agricultural Economics Association 1999

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahrendsen, Bruce L., Dixon, Bruce L., and Privanti, Atien. “Growth in Agricultural Loan Market Share for Arkansas Commercial Banks.” Journal of Agricultural and Applied Economics 26(December 1994):430–442.CrossRefGoogle Scholar
Berger, Alan N. and Udell, Gregory F.. “Universal Banking and the Future of Small Business Lending.” in Financial System Design: The Case for Universal Banking, edited by Saunders, Anthony and Walter, Ingo, Irwin Publishing, Burr Ridge, IL, 1996.Google Scholar
Featherstone, Allen M. “Post-Acquisition Performance of Rural Banks.” American Journal of Agricultural Economics 78(August 1996):728–733.CrossRefGoogle Scholar
Alton, Gilbert R. and Belongia, Michael T.. “The Effects of Affiliation with Large Bank Holding Companies on Commercial Bank Lending to Agriculture.” American Journal of Agricultural Economics 70(February 1988):69–78.Google Scholar
Keeton, William R. “Do Bank Mergers Reduce Lending to Businesses and Farmers? New Evidence from Tenth District States.” Federal Reserve Bank of Kansas City, Economic Review 81(Third Quarter 1996):63–75.Google Scholar
LaDue, Eddy and Duncan, Marvin. “The Consolidation of Commercial Banks In Rural Markets.” American Journal of Agricultural Economics 78(August 1996):718–720.CrossRefGoogle Scholar
Lee, LaDerrek T. “The Impact of Simple Commercial Bank Acquisitions on Agricultural Lending in the United States.” Unpublished M.S. thesis. University of Arkansas, Fayetteville. 1998.Google Scholar
Moore, Robert R. “Does Geographic Liberalization Really Hurt Small Banks?” Federal Reserve Bank of Dallas, Financial Industry Studies, December 1995.Google Scholar
Neff, David L. and Ellinger, Paul N.. “Participants in Bank Consolidations.” American Journal of Agricultural Economics 78(August 1996):721–727.CrossRefGoogle Scholar
Peek, Joe and Rosengren, Eric S.. “Small Business Credit Availability: How Important Is Size of Lender?” Universal Banking: Financial System Design Reconsidered, Chicago: Irwin Professional Publishing, 1996.Google Scholar
Rose, Peter S. “Implications for Future Research on Bank Consolidations in Rural Markets: Discussion.” American Journal of Agricultural Economics 78(August 1996):736–737.CrossRefGoogle Scholar
Strahan, Philip E. and Weston, James. “Small Business Lending and Bank Consolidation: Is There Cause for Concern?” Federal Reserve Bank of New York, Current Issues In Economics and Finance, March 1996.Google Scholar
United States Department of Agriculture, Economic Research Service. Agricultural Income and Finance: Situation and Outlook Report. Pub. No. AIS-68. Washington, D.C, February 1998.Google Scholar
Walraven, Nicholas A. “Lending By Rural Banks Involved In Mergers.” Board of Governors of the Federal Reserve System. Draft working paper, September 1996.Google Scholar