Federal Reserve System and the Conference of State Bank Supervisors
Community Banking in the 21st Century
October 2, 2013, Federal Reserve Bank of St. Louis
Charles Kelly, Equipment Lease Financing: The Role of Community Banks
Charles Kelly, a management and finance instructor at the University of Southern Indiana, discusses the findings of his paper “Equipment Lease Financing: The Role of Community Banks,” co-written with Mohammed Khayum, also at the University of Southern Indiana. The authors, while noting that their results are preliminary, find that community banks engaging in equipment lease financing had distinctly different lending metrics than those that did not, and their performance metrics were generally better.
Abstract: Recent analyses of U.S. community banking indicate the existence of cross-sectional and time series variation in performance, business models and strategic directions among community banks (FDIC, 2012; Gilbert et al. 2013). While consolidation within the U.S. commercial banking sector over the last quarter century has resulted in a declining number of community banks, these banks continue to play a vital role in the national economy, particularly with respect to small businesses and rural communities. Community banks provide 6 percent of small loans to farms and businesses, 16.1 percent of residential mortgage lending, 65.8 percent of farm lending and 34.5 percent of commercial real estate loans, while accounting for 19.4 percent of all retail deposits at U.S. banks as of 2011 (FDIC, 2012). At the same time, evidence of sharp declines in the community banks’ share of mortgage and consumer loans, low profitability indicators, and the continued incidence of community bank failures raises concerns about the future viability of community banking.
Welcome & Overview (Oct. 2) Moderator: Julie Stackhouse (5:29)
Research Session 1: The Role of Community Banks Research Session 1 Moderator: Scott E. Hein (5:35) Do Community Banks Play a Role in New Firm Survival? (Smith Williams) (18:27) Equipment Lease Financing: The Role of Community Banks (Mohammed Khayum) (13:24) Equipment Lease Financing: The Role of Community Banks (Charles Kelly) (14:03) Small Business Lending and Social Capital: Are Rural Relationships Different? (Kenneth Spong) (25:08) Bank Failure, Relationship Lending and Local Economic Performance (John Kandrac) (22:32) Q&A (16:07)
Evening Keynote Address Dorothy Savarese (38:04)
Community Banking Performance (Oct. 3) Moderator: Richard Brown (5:07) Financial Derivatives at Community Banks (Shelly Shen) (11:12) Lessons from Community Banks that Recovered from Financial Distress (Andrew P. Meyer) (22:40) The Effect of Distance on Community Bank Performance Following Acquisitions and Reorganizations (Timothy J. Yeager) (20:43) Performance of Community Banks in Good Times and Bad Times: Does Management Matter? (Dean F. Amel) (17:02) Research Session 2 Question and Answer Period (21:41)
Supervision and Regulation of Community Banks Moderator: Lamont Black (4:09) Estimating Changes in Supervisory Standards and Their Economic Effects (William F. Bassett) (17:23) The Impact of Dodd-Frank on Community Banks (Tanya D. Marsh) (15:39) Capital Regulation at Community Banks: Lessons from 400 Failures (Robert R. Moore) (14:39) A Failure to Communicate: The Pathology of Too Big to Fail (Harvey Rosenblum) (18:15) Research Session 3 Moderator Wrap-up (14:43) Audience Question and Answer Session (14:46)
Afternoon Keynote Presentation Federal Reserve Governor Jerome Powell (28:27)
Panel Discussion and Presentation of Results from Town Hall Sessions Presenter: Mike Stevens (13:20)
Panel Discussion: Community Banking in the 21st Century: Opportunities, Challenges and Perspectives Moderator: Charles A. Vice (13:32) Curt Hecker (7:38) Bobby P. Martin (12:24) Thomas E. Spitz (8:30) Claire W. Tucker (9:14) Community Banking Panel Question and Answer Period (1:04:29) Julie Stackhouse, Closing Remarks (11:13)