<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This paper investigates the decline of state chartered banks in the rural states Alabama, Arkansas, Nebraska, Oklahoma, and Tennessee. We use bank capital as the dependent variable for the mixed model regression analysis. We analyze both state and bank specific variables to determine which factors have more influence on bank equity capital. The findings indicate that as bank equity capital increases, the number of state chartered banks decreases. We also find that small agriculture business loans increase as equity capital increases, showing that in our sample of rural states agriculture is significant in providing a capital buffer for state chartered banks. However, we find that loans secured by farmland do not statistically influence bank equity capital.</p></abstract>

This paper investigates the decline of state chartered banks in the rural states Alabama, Arkansas, Nebraska, Oklahoma, and Tennessee. We use bank capital as the dependent variable for the mixed model regression analysis. We analyze both state and bank specific variables to determine which factors have more influence on bank equity capital. The findings indicate that as bank equity capital increases, the number of state chartered banks decreases. We also find that small agriculture business loans increase as equity capital increases, showing that in our sample of rural states agriculture is significant in providing a capital buffer for state chartered banks. However, we find that loans secured by farmland do not statistically influence bank equity capital.

Decline in State Chartered Banks: Causes, Concerns, and Conclusions

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Decline in State Chartered Banks: Causes, Concerns, and Conclusions"}

This paper investigates the decline of state chartered banks in the rural states Alabama, Arkansas, Nebraska, Oklahoma, and Tennessee. We use bank capital as...

Decline in State Chartered Banks: Causes, Concerns, and Conclusions

Published Online: May 16, 2019

Page range: 99 - 110

DOI: https://doi.org/10.2478/sbe-2019-0008

Keywords
banking, financial institutions, equity capital, bank charter

© 2019 Hannah James et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Decline in State Chartered Banks: Causes, Concerns, and Conclusions

Published Online: May 16, 2019

Page range: 99 - 110

DOI: https://doi.org/10.2478/sbe-2019-0008

Keywordsbanking, financial institutions, equity capital, bank charter

© 2019 Hannah James et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
banking, financial institutions, equity capital, bank charter