The Decline in Community Banks and its Impact on Small Business Lending

Faculty: Jan Blustein and Dick Netzer
Team: Joanne Bittenbender, Nora Fitzpatrick, Eva Silverberg
Year: 2004
The Decline in Community Banks and its Impact on Small Business Lending This study investigated whether the recent wave of acquisitions of community banks by large banks has impacted access to credit for small businesses. This study looked at the total change in small business loans pre- and post-merger. The study found that there was no significant difference between the total amount of small business loans in mergers involving small, mid-sized, and large community banks. The study did find that post-merger portfolios of large banks acquiring mid-sized community banks had significantly increased the amount of loans between $100,000 and $250,000. When a large community bank merged with a large bank the study found that the portfolio of small business loans less than $100,000 actually declined.