SIGNATURE WORK
CONFERENCE & EXHIBITION 2024

Our SW project uses detailed U.S. banks’ financial data from the Federal Deposit Insurance Corporation (FDIC) official website and U.S. meteorological data from the National Oceanic and Atmospheric Administration (NOAA) official website to conduct several linear regressions to evaluate the impact of extreme weather events on agricultural loans defaults by small county-level banks. We find that extremely low temperatures significantly increase agricultural production loans defaults of small county-level banks. Extreme high temperatures do not have a significant impact and even reduce the aggregate agricultural defaults. For precipitation, we find that extremely high precipitation increases aggregate agricultural loans defaults, which is largely reflected in defaults on farmland real estate mortgage loans, whereas agricultural production loans are less affected. Our regression analysis shows the overall negative impact of extreme weather on agricultural loans by county-level banks in the United States, provides a basis for more detailed research in relevant areas in the future, and reminds policymakers to pay more attention to the impacts of climate change and extreme weather on agriculture and finance.