Community Banking Studies

The FDIC's 2020 Community Banking Study is a data-driven effort to identify and explore issues and questions about community banks. This study is intended to be foundational, providing a platform for future research and analysis by the FDIC and other interested parties.

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Full Report

Table of Contents

Foreword

Acknowledgements

Executive Summary

Chapter 1 - Community Bank Financial Performance

Chapter 2 - Structural Change Among Community and Noncommunity Banks

Chapter 3 - The Effects of Demographic Changes on Community Banks

Chapter 4 - Notable Lending Strengths of Community Banks

Chapter 5 - Regulatory Change and Community Banks

Chapter 6 - Technology in Community Banks

Bibliography

Appendix A - Study Definitions

Appendix B - Selected Federal Agency Actions Affecting Community Banks, 2008–2019

FDIC Targeted Research on Community Banks - As part of the overall Community Banking Study, the FDIC conducted targeted research about specific issues and questions related to community banks.

• Economies of Scale in Community Banks
  Staff Studies Report No. 2020-06
  Using financial and supervisory data from the past 20 years, we show that scale economies in community banks with less than $10 billion in assets emerged during the run-up to the 2008 financial crisis due to declines in interest expenses and provisions for losses on loans and leases at larger banks. The financial crisis temporarily interrupted this trend and costs increased industry-wide, but a generally more cost-efficient industry re-emerged, returning in recent years to pre-crisis trends. We estimate that from 2000 to 2019, the cost-minimizing size of a bank’s loan portfolio rose from approximately $350 million to $3.3 billion. Though descriptive, our results suggest efficiency gains accrue early as a bank grows from $10 million in loans to $3.3 billion, with 90 percent of the potential efficiency gains occurring by $300 million.

FDIC Community Banking Study Reference Data - The FDIC Community Banking study relies on a comprehensive database that enables consistent analysis across the industry beginning in 1984.

The FDIC's 2012 Community Banking Study is a data-driven effort to identify and explore issues and questions about community banks. This study is intended to be foundational, providing a platform for future research and analysis by the FDIC and other interested parties..

All items below are PDF files. See PDF Help for assistance.

Full Report

Table of Contents

Executive Summary

Chapter 1 - Defining the Community Bank

Chapter 2 - Structural Change Among Community and Noncommunity Banks

Chapter 3 - The Geography of Community Banks

Chapter 4 - Comparative Financial Performance: Community versus Noncommunity Banks

Chapter 5 - Comparative Performance of Community Bank Lending Specialty Groups

Chapter 6 - Capital Formation at Community Banks

Bibliography

Appendix A - Details of the Research Definition of the Community Bank

Appendix B - Regulatory Compliance Costs - A Summary of Interviews with Community Bankers

FDIC Targeted Research on Community Banks - As part of the overall Community Banking Study, the FDIC conducted targeted research about specific issues and questions related to community banks.

• Community Bank Efficiency and Economies of Scale
  This paper examines efficiency ratio trends to identify the underlying reasons for the performance game between community and noncommunitybanks. The paper also estimates the importance of economies of scale among community banks.
• What Factors Explain Differences in Return on Assets Among Community Banks?
  This paper controls for underlying economic conditions to identify bank-specific factors that affect community bank performance.

FDIC Community Banking Study Reference Data - The FDIC Community Banking study relies on a comprehensive database that enables consistent analysis across the industry beginning in 1984.