The loan-to-deposit ratios of agricultural banks recently have increased to levels comparable to the record highs of the late 1970s. Most of this increase is due to loan growth. Data from call reports indicate average annual compounded growth rates for loans of 9.56% and for deposits of 5.88% during the last 5 years. Heavy reliance on higher-cost, purchased funds has worried regulators and others about potential erosion of bank earnings, excessive risk taking and possible liquidity problems if the providers of these funds redirect them to safe, higher return uses.