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Economies of Scale Encourage Continued Consolidation

July 20, 2016

Authors

Robert Klingler

Economies of Scale Encourage Continued Consolidation

July 20, 2016

by: Robert Klingler

The Federal Reserve Bank of St. Louis just published a short summary of research by economists with the Federal Reserve Bank of Kansas City concluding that compliance costs weigh “quite a bit” more heavily on smaller banks than their larger counterparts in the community banking segment.  Looking specifically at banks under $10 billion in total assets (where additional Dodd-Frank-related burdens are triggered), the study found that the ratio of compliance costs as a percentage of total noninterest expenses were inversely correlated with the size of the bank.  While banks with total assets between $1 and $10 billion in total

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Too Small to Succeed or Ownership Structure to Thrive?

April 4, 2016

Authors

Robert Klingler

Too Small to Succeed or Ownership Structure to Thrive?

April 4, 2016

by: Robert Klingler

Two recent federal banking agency reports show very different pictures of the banking environment for community banks.  In “Too Small to Succeed? – Community Banks in a New Regulatory Environment,” the Federal Reserve Bank of Dallas lays out the “apparent” rising regulatory burden confronting banks today.  In contract, “Financial Performance and Management Structure of Small, Closely Held Banks,” published in the FDIC Quarterly, provides an empirical analysis of the success of closely held community banks in the FDIC Kansas City, Dallas and Chicago regions.

Lots of Community Banks Remain

As a reminder (which often seems forgotten in these

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