PPP Raised Community Bank Revenue but Lowered Profitability

W. Blake Marsh and Padma Sharma
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W. Blake Marsh: https://www.kansascityfed.org/research-staff/w-blake-marsh/

Economic Bulletin, 2020, 5

Abstract: Community banks have played an outsized role in the Paycheck Protection Program (PPP), disbursing 37 percent of all PPP loans despite holding only 18 percent of outstanding bank loans. Although participation boosted community banks’ revenue by supporting asset and interest income growth, it appears to have lowered their profitability, at least initially: low interest rates and deferred fee collection on PPP loans reduced banks’ earning margins.

Keywords: Paycheck Protection Program; Bank loans; Community banks (search for similar items in EconPapers)
JEL-codes: E51 G21 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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