Farmers Exchange Bank in the tiny town of Antlers, in southeastern Oklahoma, isn't the farmers exchange it used to be.

The $20 million bank was founded in 1929 and always used to have more than 25% of its loans in agriculture, mostly the cattle business.

But the last time Farmers Exchanged topped that figure-which is what defines an ag bank-was in December 1993.

President Bill Piester isn't sure when he stopped being an ag banker, and he's not very upset about it. He sees Farmers Exchange's future in the commercial real estate and consumer loan business, where margins, growth prospects, and the competition are all more forgiving.

Besides, he said, farming isn't the handshake business it used to be. "Farmers would do all they could just to pay you back," he said. "Those types of ranchers are getting scarce. It's just not like that anymore."

Much about ag lending isn't what it used to be. Thousands of small banks like Farmers Exchange have seen their farm loan portfolios dwindle, or at least dwindle in importance. For some, like Mr. Piester, it was simply a matter of the market outgrowing them. For others, other kinds of business are simply overtaking agriculture.

"From a paperwork standpoint, it just got too cumbersome and expensive to service small cattle ranchers," said Mr. Piester, whose family owns Farmers Exchange.

At First National Bank of Johnstown, Colo., president Michael Engrav has piled on the consumer loans. Its agriculture portfolio in 1993 was a whopping 31% of total loans; today it's less than 17%.

"We've become a suburb of several midsize cities, even Denver," he said. "That's why our consumer portfolio has grown so much. Also, farms are being consolidated ... they're just too big for our lending limit."

In the last three years First National's standard commercial loans have tripled to $1.5 million. Its consumer loans grew 78%. Its agriculture loans stayed pat.

"We're not going to ignore agriculture," he said. "But that side of the business just won't be a big growth area for us."

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