@article{Ahrendsen:303669,
      recid = {303669},
      author = {Ahrendsen, Bruce L. and Yeager, Timothy J. and Fang, Cao},
      title = {COVID-19 Impacts on Agricultural and Non-Agricultural  Banks},
      address = {2020-05},
      number = {1539-2020-534},
      series = {SP 02 2020},
      pages = {13},
      year = {2020},
      abstract = {Summary : The uncertainty of the COVID-19 crisis is  exposing community banks to a severe adverse shock that is  arguably greater than the 2008 financial crisis. A stress  test for the 1,671 agricultural banks and 2,261  non-agricultural banks in the United States is completed to  provide an estimate of the potential effect of the COVID-19  crisis on bank financial status for 2000-2024. The stress  test applies chargeoff rates derived from banks’ actual  chargeoff rates for 2008 through 2012, which includes the  recession and recovery following the financial crisis. The  chargeoff rates applied to each bank in a local market are  taken from the 90th percentile chargeoff rates for all  banks in the market. Non-agricultural banks are projected  by the simulation to be more adversely impacted than  agricultural banks. A greater share of non-agricultural  banks are expected to fail and to have lower profitability  than the share of agricultural banks. A key assumption of  the simulation is that agricultural loan chargeoff rates  are less than non-agricultural loan chargeoff rates was the  case during the 2008-2012 financial crisis. For this  assumption to hold, it is implicitly assumed financial  support will be provided to farmers and ranchers and the  support when allocated and distributed will offset the  negative impact from the COVID-19 shock experienced by  farmers and ranchers. Without the support, more  agricultural banks would be expected to have financial  difficulties and fail. Moreover, if support is not  allocated to match the parts of the agricultural sector  most negatively impacted by the COVID-19 crisis, regional  differences in the impact on agricultural banks are likely  to emerge.},
      url = {http://ageconsearch.umn.edu/record/303669},
      doi = {https://doi.org/10.22004/ag.econ.303669},
}