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Performance and growth among de novo subchapter-s banks

Author

Listed:
  • Russell Kashian

    (University of Wisconsin Whitewater)

  • Ronald Tittle

    (University of Wisconsin Whitewater)

  • Richard Cummings

    (University of Wisconsin Whitewater)

  • Peter Westort

    (University of Wisconsin Oshkosh)

Abstract

Prior research suggests that shareholder limitations under Subchapter S (Sub-S) status enhance performance but result in slow growth. A sample of up to 882 de novo banks, started between 2001 and 2014 and lasting at least two years, is used to test how early the performance and growth effects appear. Testing uses cross-sectional regressions for performance and growth separately for two years, then three, and so forth up to seven years after bank start-up. During this period, positive performance effects appear early and tend to remain, while negative growth effects tend to be both weaker and appear later in the life-cycle of the bank.

Suggested Citation

  • Russell Kashian & Ronald Tittle & Richard Cummings & Peter Westort, 2018. "Performance and growth among de novo subchapter-s banks," Economics Bulletin, AccessEcon, vol. 38(4), pages 2353-2361.
    • Handle: RePEc:ebl:ecbull:eb-18-00415
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I4-P214.pdf
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    References listed on IDEAS

    as
    1. Depken II, Craig A. & Hollans, Harris & Swidler, Steve, 2010. "Do tax benefits conferred to Sub-S banks affect their deposit or loan rates?," Finance Research Letters, Elsevier, vol. 7(4), pages 238-245, December.
    2. R. Alton Gilbert & David C. Wheelock, 2007. "Measuring commercial bank profitability: proceed with caution," Review, Federal Reserve Bank of St. Louis, vol. 89(Nov), pages 515-532.
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    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    5. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    6. Russ Kashian & Richard McGregory & Robert Drago, 2016. "ATM Fees at Black and Hispanic Owned Single Market Banks: A Comparative Analysis," The Review of Black Political Economy, Springer;National Economic Association, vol. 43(1), pages 69-84, March.
    7. Russ Kashian & Richard G. Cummings & Peter Westort, 2017. "Equity and asset growth among Subchapter S banks," Applied Economics Letters, Taylor & Francis Journals, vol. 24(12), pages 854-857, July.
    8. Russ Kashian & Richard McGregory & Robert Drago, 2016. "ATM Fees at Black and Hispanic Owned Single Market Banks: A Comparative Analysis," The Review of Black Political Economy, Springer;National Economic Association, vol. 43(1), pages 69-84, March.
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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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