FDIC: Table 7: Changes in Community Bank (CB) Small Business Loan Market Share and Sources of Small Business Loan (SBL) Growth

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		Home > Industry Analysis > Research & Analysis > Working Paper Series > Bank Consolidation and Small Business Lending > Table 7

Bank Consolidation and Small Business Lending: The Role of Community Banks

**Table 7: Changes in Community Bank (CB) Small Business Loan Market Share and Sources of Small Business Loan (SBL) Growth**
Subsample means for markets experiencing no or a low level of consolidation activity (Low CA) versus a high level of consolidation activity (High CA); further subdivided into markets having a low versus a high beginning-of-period community bank small business loan market share (CB Share).¹
	Urban Markets: 1994–1997				Rural Markets: 1994–1997				Urban Markets: 1997–2000				Rural Markets: 1997–2000
	Low CA		High CA		Low CA		High CA		Low CA		High CA		Low CA		High CA
	CB Share		CB Share		CB Share		CB Share		CB Share		CB Share		CB Share		CB Share
	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High
Changes in Community Bank Market Share²
Changes in CB market share of total SBL
Gross change	1.7	-3.4	3.0	-7.0	4.7	-0.6	2.6	-15.8	5.0	-5.1	1.4	-10.7	6.8	0.8	2.7	-15.5
Proforma consolidation effect	-3.6	-4.6	-4.2	-14.3	-2.1	-1.5	-5.7	-22.6	-2.5	-3.1	-6.5	-16.3	-0.4	-1.2	-7.9	-20.1
Proforma growth effect	-1.0	-4.0	-0.6	-1.8	-1.3	-1.5	-1.8	-1.7	-0.1	-7.4	-2.6	-3.1	-1.5	-2.0	-0.6	-2.1
Change net of proforma effects	6.4	5.2	7.8	9.1	8.1	2.4	10.1	8.5	7.6	5.5	10.5	8.7	8.7	4.0	11.2	6.7
Change in CB market share of <$100K SBL
Change net of proforma effects	5.5	2.8	6.8	9.1	8.0	1.3	10.5	6.4	4.9	2.4	8.5	6.7	6.9	1.6	9.3	6.2
Change in CB market share of >$100K SBL
Change net of proforma effects	7.0	7.3	8.5	9.2	9.0	10.6	9.7	14.7	9.0	9.6	12.3	10.9	11.1	10.1	12.5	9.9
Change in CB market share of CRE SBL
Change net of proforma effects	6.8	6.8	8.6	8.7	8.5	3.2	11.9	9.0	7.9	5.8	11.1	10.2	8.3	3.8	11.1	7.2
Change in CB market share of C&I SBL
Change net of proforma effects	5.9	3.9	6.9	9.7	7.7	1.9	8.5	7.6	7.5	4.9	9.6	7.1	9.0	4.3	10.7	6.9
Sources of Small Business Loan Growth³
Growth of total SBL
Total	12.7	11.8	5.6	6.9	13.1	11.4	9.9	14.3	11.9	16.0	18.2	18.9	19.6	19.7	17.5	20.4
Consolidating institutions	-2.8	-5.0	-13.0	-8.1	-4.4	-0.8	-8.5	-0.9	1.4	-0.3	2.0	2.4	1.1	0.3	-2.2	3.5
CB survivors	1.0	0.6	1.4	2.2	1.4	1.8	4.0	4.3	0.5	0.9	2.3	1.1	2.5	2.3	1.5	2.9
Acquirers of orgs in other markets	0.1	0.7	0.6	0.9	1.3	1.6	1.7	1.9	0.2	1.0	0.9	0.9	2.0	2.1	0.8	0.7
Acquired by orgs not in market	0.2	-0.1	0.3	0.9	0.2	0.1	1.4	1.5	0.1	0.0	0.2	0.1	0.0	0.2	0.2	1.5
Within-mkt. CA	0.7	-0.1	0.5	0.4	0.0	0.1	0.9	0.8	0.3	-0.1	1.2	0.1	0.5	0.0	0.4	0.7
Big organization survivors	-3.8	-5.6	-14.4	-10.4	-5.9	-2.6	-12.5	-5.1	0.9	-1.2	-0.3	1.3	-1.4	-2.0	-3.7	0.6
Acquirers of orgs in other markets	-3.5	-4.2	-4.5	-3.1	-5.0	-2.2	-1.4	-1.1	0.6	-1.4	2.4	3.4	-0.9	-1.8	0.2	-0.7
Acquired by orgs not in market	0.9	-0.5	-7.1	-3.6	-0.6	-0.2	-9.2	-3.1	-0.4	0.0	-0.3	-0.5	0.0	0.1	-1.5	3.1
Within-mkt. CA	-1.2	-1.0	-2.8	-3.7	-0.3	-0.3	-2.0	-1.0	0.7	0.1	-2.5	-1.7	-0.5	-0.3	-2.3	-1.8
Existing CBs	7.0	9.7	7.2	8.6	9.5	9.0	9.5	11.6	6.8	11.1	9.9	11.5	11.5	13.8	11.8	11.2
Existing big organizations	0.1	0.0	0.6	0.2	-0.1	0.2	0.5	-0.2	-6.2	-5.5	-4.0	-3.5	-5.4	-2.0	-2.1	-1.0
New CB market entrants	2.3	1.6	1.9	1.4	2.9	1.3	2.5	2.4	3.3	3.2	5.0	3.8	4.5	3.7	5.5	3.0
New big market entrants	6.2	5.7	8.9	4.9	5.3	1.8	5.9	1.4	6.6	7.5	5.3	4.8	7.9	3.8	4.5	3.8
Total all CBs	10.3	11.8	10.5	12.2	13.8	12.1	16.0	18.3	10.6	15.3	17.2	16.4	18.5	19.9	18.8	17.0
Total all big organizations	2.5	0.0	-4.9	-5.3	-0.7	-0.6	-6.1	-4.0	1.3	0.7	1.0	2.5	1.1	-0.2	-1.3	3.4
Growth of <$100K SBL
Total all CBs	3.1	2.8	2.4	2.6	5.3	-1.2	5.9	5.7	0.2	-1.0	2.5	2.2	4.3	-0.8	4.2	0.9
Total all big organizations	-1.7	-0.1	-2.5	-4.8	-3.4	-0.8	-5.9	-2.7	-2.2	-1.7	-2.3	-0.7	-2.5	-0.9	-2.8	-0.6
Growth of >$100K SBL
Total all CBs	7.2	9.0	8.1	9.6	8.5	13.2	10.1	12.5	10.5	16.2	14.7	14.2	14.2	20.7	14.6	16.2
Total all big organizations	4.1	0.1	-2.4	-0.5	2.7	0.2	-0.2	-1.3	3.5	2.4	3.2	3.2	3.5	0.7	1.6	4.0
Growth of CRE SBL
Total all CBs	5.0	5.5	5.4	5.1	6.7	6.0	8.0	9.4	6.7	9.3	9.4	9.1	10.3	12.0	10.2	10.2
Total all big organizations	0.0	-2.0	-3.7	-3.5	-0.6	-0.8	-4.9	-2.9	0.6	0.4	0.5	0.4	2.8	0.7	0.2	3.2
Growth of C&I SBL
Total all CBs	5.3	6.3	5.1	7.1	7.2	6.0	8.0	9.0	4.0	6.0	7.8	7.3	8.2	7.9	8.6	6.9
Total all big organizations	2.5	2.0	-1.2	-1.8	-0.1	0.2	-1.2	-1.1	0.7	0.4	0.5	2.2	-1.7	-0.8	-1.5	0.1
Memo item: sample size	36	34	45	51	143	173	93	99	18	19	59	53	113	159	131	107

¹ Low consolidation activity (Low CA) subsamples include markets where the share of the SBL market acquired during the study period is less than 5 percent and High CA subsamples include markets where more than 25 percent of the SBL market was acquired. For the urban subsamples, low community bank market share markets (Low CB Share versus High CB Share) are those where the beginning-of-period community bank share of small business lending is less than 40 percent (versus 40 percent or more). For the rural subsamples, Low CB Share markets (versus High CB Share markets) are those where the beginning-of-period community bank share of small business lending is less than 60 percent (versus 60 percent or more).
² For each market, the gross change in community bank market share is decomposed into additive components measuring: the change attributable to proforma organization size category reclassifications due to consolidation activity; the change attributable to proforma size category reclassifications due to asset growth (other than that due to consolidation activity); and the change in community bank small business loan market share measured net of proforma changes due to organization size reclassifications (Change net of proforma effects). All measures of market share changes are adjusted for economic and banking conditions as described in section 4 of the paper.
³ Small business loan growth and its components are decomposed into additive components by type of institutions. All small business loan components are adjusted for economic and banking conditions as described in section 4 of the paper.

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