FDIC: Drought Conditions Could Impact Oklahoma Banks
Friday, October 6th 2006, 10:32 am
By: News On 6
OKLAHOMA CITY (AP) -- A new economic report suggest that an ongoing drought in Oklahoma could end up hurting the state's community banks.
The Federal Deposit Insurance Corporation says in a quarterly report that current banking conditions are strong. But it says rising expenses, declining farm income and the drought could make it difficult for farmers and ranchers to stay current on their loan payments.
The drought has damaged crops and forced some ranchers to liquidate cattle herds. And the US Department of Agriculture expects farm costs to go up nearly 12 percent this year while income is expected to drop almost three percent.
There are 226 community banks in drought-stricken areas holding agricultural loans of $1.8-billion out of $18.9-billion in total loans.