Do community banks benefit from diversification?

Journal of Financial Services Research

Volumn 25, Issue 2-3, 2004, Pages 135-160

  Stiroh, Kevin J ^a  

^a FEDERAL RESERVE BANK OF NEW YORK   (United States)

Author keywords

Community bank; Diversification; Performance

Indexed keywords

EID: 3843116611     PISSN: 09208550     EISSN: None     Source Type: Journal    
DOI: 10.1023/b:fina.0000020657.59334.76     Document Type: Conference Paper

References (49)

1. Acharya, Viral V., Iftekhar Hasan, and Anthony Saunders. "The Effects of Focus and Diversification on Bank Risk and Return: Evidence from Individual Bank Loan Portfolios." Mimeo, New Jersey Institute of Technology, March 15, 2002.
2. Aggarwal, R. K., and A. A. Samwick. "Why Do Managers Diversify Their Firms? Agency Reconsidered." Journal of Finance 58, no. 1 (2003), 71-118.
3. Altman, Edward I. "Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy." Journal of Finance 23, no. 4 (1968), 589-609.
4. Basset, William F., and Thomas F. Brady. "The Economic Performance of Small Banks, 1985-2000." Federal Reserve Bulletin (November 2001), 719-728.
5. Berger, Allen N., Rebecca S. Demsetz, and Philip E. Strahan. "The Consolidation of the Financial Services Industry: Causes, Consequences, and Implication for the Future." Journal of Banking and Finance 23 (1999), 135-194.
6. Berger, Allen N., Lawrence G. Goldberg, and Lawrence J. White. "The Effects of Dynamic Changes in Bank Competition on the Supply of Small Business Credit." Federal Reserve Board, Finance and Economic Discussion Series 2001, pp. 2001-2035.
7. Berger, Allen N., Nathan H. Miller, Mitchell A. Petersen, Raghuram G. Rajan, and Jeremy C. Stein. "Does Function Follow Organizational Form: Evidence from the Lending Practices of Large and Small Banks." Manuscript, Kellogg School of Management, Northwestern University, March, 2003.
8. Berger, Allen N., Richard J. Rosen, and Gregory F. Udell. "The Effect of Market Size Structure on Competition: The Case of Small Business Lending." Federal Reserve Board, Finance and Economics Discussion Series, 2001, pp. 2001-2063.
9. Berger, Allen N., Anthony Saunders, Joseph M. Scalise, and Gregory F. Udell. "The Effects of Bank Mergers and Acquisitions on Small Business Lending." Journal of Financial Economics 50 (1998), 187-229.
10. Berger, Allen N., and Gregory F. Udell. "Universal Banking and the Future of Small Business Lending." In: Anthony Saunders, and I. Walter, eds., Universal Banking: Financial System Design Reconsidered. Burr Ridge, IL: Irwin, 1996, pp. 559-627.
11. Berger, Allen N., and Gregory F. Udell. "Small Business Credit Availability and Relationship Lending: The Importance of Bank Organizational Structure." Economic Journal (forthcoming).
12. Bliss, Richard T., and Richard J. Rosen. "CEO Compensation and Bank Mergers." Journal of Financial Economics 61 (2001), 107-138.
13. Boyd, John H., mld S. L. Graham. "The Profitability and Risk Effects of Allowing Bank Holding Companies to Merge with Other Financial Firms: A Simulation Study." Quarterly Review, Federal Reserve Bank of Minneapolis 12, no. 2 (1988), Spring, 3-20.
14. Boyd, John H., S. L., Graham, and R. S. Hewitt. "Bank Holding Company Mergers with Nonbank Financial Firms: Effects on the Risk of Failure." Journal of Banking and Finance 17 (1993), 43-63.
15. Cebenoyan, A. Sinan, and Philip E. Strahan "Risk Management, Capital Structure and Lending at Banks." Journal of Banking and Finance 28, no. 1 (January 2004), 19-43.
16. Cummins, J. David, Richard D. Phillips, and Stephen D. Smith. "The Rise of Risk Management." Economic Review, Federal Reserve Bank of Atlanta First Quarter 1998, 30-40.
17. DeLong, Gayle L. "Stockholder Gains from Focussing versus Diversifying Bank Mergers." Journal of Financial Economics 59 (2001), 221-252.
18. Demsetz, Rebecca S., and Philip E. Strahan. "Diversification, Size, and Risk at Bank Holding Companies." Journal of Money, Credit and Banking 29, no. 3 (1997), 300-313.
19. DeYoung Robert, Lawrence G. Goldberg, and Lawrence J. White. "Youth, Adolescence, and Maturity of Banks: Credit Availability to Small Business in an Era of Banking Consolidation." Journal of Banking and Finance 23 (1999), 463-492.
20. DeYoung, Robert, and Iftekhar Hasan. "The Performance of De Novo Banks: A Profit Efficiency Approach." Journal of Banking and Finance 22 (May 1998), 565-587.
21. DeYoung, Robert, and Karin P. Roland. "Product Mix and Earnings Volatility at Commercial Banks: Evidence from a Degree of Total Leverage Model." Journal of Financial Intermediation 10 (2001), 54-84.
22. Froot, Kenneth A., David S. Scharfstein, and Jeremy C. Stein. "Risk Management: Coordinating Corporate Investment and Financing Policies." Journal of Finance, XLVIII, no. 5 (December 1993), 1629-1658.
23. Froot, Kenneth A., and Jeremy C. Stein. "Risk Management, Capital Budgeting, and Capital Structure Policy for Financial Institutions: An Integrated Approach." Journal of Financial Economics 47 (1998), 55-82.
24. Houston, Joel F., Christopher M. James, and Michael D. Ryngaert. "Where Do Merger Gains Come From? Bank Mergers from the Perspective of Insiders and Outsiders." Journal of Financial Economics 60 (2001) 285-331.
25. Hughes, Joseph P., and Loretta J. Mester. "Bank Capitalization and Cost: Evidence of Scale Economies in Risk Management and Signaling." Review of Economics and Statistics 80, no. 2 (1998), 314-325.
26. Hughes, Joseph P., Loretta J. Mester, and Choon-Geol Moon. "Are Scale Economies in Banking Elusive or Illusive? Evidence Obtained by Incorporating Capital Structure and Risk-Taking into Models of Bank Production." Journal of Banking and Finance 25, no. 12 (2001), 2169-2208.
27. Jayaratne, Jith, and John Wolken. "How Important are Small Banks to Small Business Lending? New Evidence from a Survey of Small Firms" Journal of Banking and Finance 23 (1999), 427-458.
28. Kwan, Simon. "Risk and Return of Banks' Section 20 Securities Affiliates." FRBSF Economic Letter 23 (October 1998), 98-32.
29. Kwast, Myron. "The Impact of Underwriting and Dealing on Bank Returns and Risk." Journal of Banking and Finance 13 (1989), 101-125.
30. Lown, Cara S., Carol L. Osler, Phillip E. Strahan, and Amir Sufi. "The Changing Landscape of the Financial Service Industry: What Lies Ahead?" Economic Policy Review Federal Reserve Bank of New York, 6, no. 4 (October 2000), 39-54.
31. Meyer, Andrew P., and Timothy J. Yeager. "Are Small Rural Banks Vulnerable to Local Economic Downturns?" Review, Federal Reserve Bank of St. Louis, (March/April 2001), 25-38.
32. Milbourn, T. T., A. W. A. Boot, and A. V. Thakor. "Megamergers and Expanded Scope: Theories of Bank Size and Activity Diversity." Journal of Banking and Finance 23 (1999), 195-214.
33. Morgan, Donald P., and Katherine Samolyk. "Geographic Diversification in Banking and Its Implication for Bank Portfolio Choice and Performance." Working paper, Federal Reserve Bank of New York, February 20, 2003.
34. Nakamura, Leonard I. "Small Borrowers and the Survival of the Small Bank: Is Mouse Mighty of Micky?" Business Review, Federal Reserve Bank of Philadelphia, November-December (1994), 3-15.
35. Peek, Joe, and Eric S. Rosengren. "Bank Consolidation and Small Business Lending: It's Not Just Size that Matters." Journal of Banking and Finance 22 (1998), 7999-8819.
36. Pilloff, Steven J., and Stephen A. Rhoades. "Do Large, Diversified Banking Organizations Have Competitive Advantages?" Review of Industrial Organization 16, no. 3 (2000), 2873-3302.
37. Rose, Peter S. "Diversification of the Banking Firm." The Financial Review 24, no. 2 (1989), 251-280.
38. Rosen, Richard J., Peter R. Lloyd-Davies, Myron L. Kwast, and David B. Humphrey. "A Portfolio Analysis of Bank Investment in Real Estate." Journal of Banking and Finance 13, no. 3 (1989), 355-366.
39. Santomero, Anthony W., and Eek-june Chung. "Evidence in Support of Broader Banking Powers." Financial Markets, Institutions, and Instruments 1, no. 1 (1992), 1-69.
40. Saunders, Anthony, and Ingo Walters. Universal Banking in the United States: What Could We Gain? What Could We Lose? New York, NY: Oxford University Press, 1994.
41. Shaffer, Sherrill. "Challenges to Small Banks' Survival." Business Review, Federal Reserve Bank of Philadelphia, September/October (1989), 15-25.
42. Stiroh, Kevin J. "Diversification in Banking: Is Noninterest Income the Answer?" Journal of Money, Credit, and Banking, forthcoming. Federal Reserve Bank of New York Staff Report No. 154, September, 2002.
43. Stiroh, Kevin J., and Jennifer P. Poole. "Explaining the Rising Concentration of Banking Assets in the 1990s." Current Issues in Economics and Finance, Federal Reserve Bank of New York, 6, no. 9, August 2000.
44. Stiroh, Kevin J., and Adrienne Rumble. "The Darkside of Diversification for U.S. Bank Holding Companies." Working paper, Federal Reserve Bank of New York, 2003.
45. Stiroh, Kevin J., and Philip E. Strahan. "Competitive Dynamics of Deregulation: Evidence from U.S. Banking." Journal of Money, Credit, and Banking (2003) (forthcoming).
46. Strahan, Philip E., and James P. Weston. "Small Business Lending and the Changing Structure of the Banking Industry." Journal of Banking and Finance 22 (1998), 821-845.
47. Templeton, William K., and Jacobus T. Severiens. "The Effect of Nonbank Diversification on Bank Holding Companies." Quarterly Journal of Business and Economics 31, no. 4 (1992), 3-16.
48. Zimmerman, Gary C. "California's Community Banks in the 1990s." Weekly Letter, Federal Reserve Bank of San Francisco, no. 96-04, January 26, 1996a.
49. Zimmerman, Gary C. "Factors Influencing Community Bank Performance in California." FRBSF Economic Review no. 1 (1996b), 26-42.