The Increasing Brick-and-Mortar Efficiency of Community Banks

Stefan Jacewitz

Economic Review, 2022, vol. 107, issue no.2

Abstract: The number of community banks in the United States has been declining steadily for decades, as has the share of total industry assets held by these banks. Because community banks play an outsized role in originating loans to small businesses, a continued decline in their numbers and asset holdings could constrain entrepreneurs’ access to credit—and, accordingly, constrain growth in the overall economy. One possible explanation for the declining number of community banks is that larger banks have benefitted from economies of scale and outpaced them in efficiency. Stefan Jacewitz examines how the efficiency of community banks has changed since the 2008 global financial crisis. He finds that community banks have in fact seen substantial improvements in efficiency, partially attributable to a relative decline in their brick-and-mortar expenses. His results suggest that community banks have made and continue to make meaningful gains even as the banking landscape evolves.

Keywords: Community banks; Financial crisis (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.kansascityfed.org/Economic%20Review/do ... ewV107N2Jacewitz.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedker:94255

Ordering information: This journal article can be ordered from

DOI: 10.18651/ER/v107n2Jacewitz

Access Statistics for this article

More articles in Economic Review from Federal Reserve Bank of Kansas City Contact information at EDIRC.
Bibliographic data for series maintained by Zach Kastens ().