Bank Performance And Risk: Evidence From The Energy-Producing States

Abstract

This paper investigates the causes of variation in loan performance among banks located in the energy producing states of Louisiana, Oklahoma, and Texas.  The findings of this study indicate that a substantial portion of the variation in loan performance can be ascribed to the unusually poor performance of particular industries like energy.  However, the findings also suggest that excessive risk-taking was a major factor in the loan problems encountered by many of the region’s banks.