Office of Advocacy U.S. Small Business Administration Small Business Lending in the United States, 2002 Edition A Directory of Small Business Lending Reported by Commercial Banks in June 2002 Foreword I am pleased to provide the latest edition of the Office of Advocacy’s annualstudy of bank lending to small and micro businesses. This year we’ve combined two reports in one. Small and Micro Business Lending in the United States covers both bank small business lending-defined as loans of less than $1 million-and micro business lending-defined as loans of less than $100,000-for the 2001-2002 period. The source information consists of two types of data reported by banks to their regulating agencies-the call reports for June 2002 and the Community Reinvestment Act (CRA) reports for 2001. The report provides data on the top small business-friendly banks in each state, and is useful to both small businesses looking for loans and banks looking at how they stack up to the competition. I encourage readers to use this as a resource and, by all means, congratulate the banks that are doing a good job of meeting the need for capital in the small business community. The lending studies may also be viewed on the Office of Advocacy’s homepage, www.sba.gov/advo. If you have questions or comments, write to the Office of Advocacy, U.S. Small Business Administration, Mail Code 3112, 409 Third St., S.W., Washington, D.C. 20416, or fax (202) 205-6928. Technical questions may be addressed to Dr. Charles Ou or Ms. Victoria Williams, at (202) 205-6530 or by e-mail: Charles.Ou@sba.gov or Victoria.Williams@sba.gov. We welcome your comments and suggestions. Thomas M. Sullivan Chief Counsel for Advocacy Contents Foreword Introduction 1 Part One: Developments in Small and Micro Business Lending 3 I. Findings from the June 2002 Call Reports 3 A. Small Business Loans Outstanding from All Reporting Banks 3 B. Total Micro Business Loans Outstanding in the United States 3 C. Small and Micro Business Loans Outstanding from Multi-Billion-Dollar BHCs 5 II. Findings from the Reports by CRA Reporting Banks, Year 2001 8 A. Small Business Lending by CRA Reporting Banks and BHCs 8 B. Micro Business Lending by CRA Reporting Banks and BHCs 8 Part Two: Directory of Top-ranking U.S. Small and Micro Business Lenders 10 Appendix: Ranking Methodology, Table Descriptions, and Tables 13 The Tables 20 Introduction Access to credit is vital for small business survival. A key supplier of credit to small firms is the commercial banking system, according to the 1998 Survey of Small Business Finances. Of a total of $700 billion in small business credit outstanding from all credit sources at the end of 1998, commercial banks supplied 57 percent, compared with 12 percent supplied through owners’ loans and 11 percent from finance companies. Critical to the health and growth of a small business is knowledge of how banks are meeting small firm credit needs and which banks are investing in small businesses. Such information helps small businesses save precious time and shop efficiently for credit-and it also helps banks to know about the competition in the market(s) in which they participate. This annual edition of Small Business and Micro Business Lending in the United States During 2002 provides current data on small and micro business loans to small firms and on the banks that serve them. The study combines two studies on small business and micro business lending, published separately in previous years, to provide a brief review of these lending activities in 2001-2002. The study is based on two types of data reported by banks to their regulating agencies-the call reports for June 2002 and the Community Reinvestment Act (CRA) reports for 2001. Because the data are available only for the size of the loan and not for the size of the business, small business loans are defined as business loans under $1 million and micro business loans are those under $100,000. Part One discusses developments in small and micro business lending activities by commercial banks in the United States. The first section discusses developments apparent in the call report data, and the second section discusses developments based on the CRA database. Part Two provides directories of the top small business and micro business lenders in the states using both the call report and CRA data. For the reader’s convenience, national tables for large bank holding companies (BHCs) are presented before state tables for all banks, not because BHCs are more important in small business lending, but because the tables for BHCs are shorter. Four sets of tables are presented: Table 1A ranks the small business friendliness of 58 large BHCs with total domestic assets in excess of $10 billion each, using call report data. Each bank is ranked from 1 to 58 based on the four criteria used in previous editions. Table 1B ranks the micro business friendliness of the 58 large BHCs. Table 2A ranks the BHCs’ small business friendliness using CRA data. Since CRA data provide location-specific information about a bank’s lending activities, information on a large BHC’s participation in local markets is better provided in this table. Table 2B ranks the BHCs’ micro business friendliness using CRA data. Table 3A provides a list of small business-friendly banks in individual states using call report data. The list includes the top 10 banks or the top 10 percent, whichever number is smaller. Table 3B provides a list of micro business-friendly banks in the states-the top 10 banks or the top 10 percent, whichever number is smaller. Table 4A provides a list of the top small business lenders in a given state using CRA data. The list includes large banks and large BHCs with small business lending in a given state in excess of $50 million in 2001. Table 4B provides a list of top micro business lenders in a given state using CRA data. Large banks and BHCs with micro business lending in a given state in excess of $10 million in 2001 were included. While these two databases have limitations as indicators of both the supply of loans from commercial banks and the small business demand for bank loans, the usefulness of these databases cannot be denied- they are the only publicly available sources of information on the small business lending activities of individual banks. Accessing the Study All editions of Advocacy lending studies are on the Internet at: http://www.sba.gov/advo/stats/lending Paper and microfiche copies are also available for purchase from the National Technical Information Service, telephone (703) 487-4650. Suggestions Send written comments or suggestions to the Office of Advocacy, U.S. Small Business Administration, Mail Code 3112, 409 Third St., S.W., Washington, D.C. 20416, or by fax to (202) 205-6928. Technical questions may be addressed to Dr. Charles Ou or Ms. Victoria Williams, at (202) 205-6530 or by e-mail: Charles.Ou@sba.gov or Victoria.Williams@sba.gov. Part One: Developments in Small and Micro Business Lending I. Findings from the June 2002 Call Reports A. Small Business Loans Outstanding from All Reporting Banks With the U.S. economy continuing a weak recovery from a relatively mild recession since the fourth quarter of 2001, small business lending by banks showed very moderate increases. Both borrowers and lenders continued to hold off new borrowing and lending in reaction to an uncertain economy. Small business loans outstanding (defined here as loans under $1 million) totaled $484 billion in June 2002, an increase of $23.6 billion or 5.1 percent between June 2001 and June 2002, compared with an increase of 5.4 percent over the previous period (June 2000 to June 2001) (Table A). For the first time in years, total business loans declined over the period, with business loans outstanding down slightly from $1.32 trillion to $1.31 trillion, a 1.3 percent drop. The decline came totally from the largest loans (over $1 million), down 4.8 percent from $864 billion to $823 billion, compared with an increase of more than 10 percent over the 1997-2000 period. Contributing to the decline were declines in lending for activities related to securities trading and mergers/acquisitions, as well as portfolio readjustments made by large corporate borrowers to take advantage of lower market rates. As in the previous year, the smallest dollar increases in small business loans of various sizes were in the smallest loans (those under $100,000), which grew a meager 1.7 percent, compared with increases of 4.9 percent in the total value of loans of $100,000 to $250,000, and 7.04 percent in loans of $250,000 to $1 million (Table B). In all three size categories, however, the number of loans increased more than the dollar amount. The number of the smallest loans (less than $100,000) increased by 45.0 percent, while the number of loans of $100,000 to $250,000 increased 8.8 percent and those of $250,000 to $1 million increased by 9.8 percent. The very large increase in the number of very small loans seems to be a result primarily of the promotion of small business credit cards (Table C). B. Total Micro Business Loans Outstanding in the United States Micro business loans outstanding-micro business loans are defined here as loans under $100,000-totaled $129.9 billion in June 2002, an increase of $2.1 billion or 1.67 percent during this period, compared with an increase of 4.4 percent in the June 2000-June 2001 period. Again, the value of micro business loans increased less than that of other small business loans (Table A)-and is even less if the impact of the growth in small business credit cards is removed. The most significant phenomenon in micro business lending over the June 2001-June 2002 period is the huge jump in the number of loans, up from 10.8 million to 15.7 million, an increase of 45 percent (Table C). Again, there is a strong indication that the large increase was primarily the result of the promotion of business credit cards by major banks and finance companies. Banks and member banks of major BHCs with substantial business credit card operations were identified in an attempt to separate this segment of small business loans from overall small business lending activities by commercial banks. Table A. Dollar Amount and Number of Small Business Loans, 1999-2002 (Dollars in Billions, Numbers in Millions) Loan Size 1999 2000 2001 2002 Percent Change, 2001-2002 Under $100,000 Dollars $113.9 $121.4 $126.8 $128.9 1.67 Number 7.73 9.80 10.79 15.65 45.0 Under $250,000 Dollars $195.0 $209.4 218.4 225.0 3.03 Number 8.41 10.54 11.57 16.50 42.6 Under $1 Million Dollars $398.5 $437.0 460.4 484.0 5.12 Number 9.00 11.17 12.25 17.24 40.8 Total Business Loans $1,142.3 $1,300.3 1,324.5 1307.0 -1.33 Table B. Percent Change in the Dollar Amount of Business Loans by Loan Size, 1995-2002 Loan Size 95-96 96-971 97-981 98-992 99-00 00-01 01-02 <$100,000 4.8 2.9 3.0 2.5 6.7 4.4 1.7 $100,000-250,000 5.7 5.2 8.1 6.3 8.5 4.1 4.9 $250,000-$1 Million 5.7 5.7 7.7 11.2 11.8 6.4 7.0 >$1 Million 5.1 11.5 13.0 14.6 16.1 0.9 -4.8 1Changes for 1996-1997 and 1997-1998 were estimated based on revised estimates for Keycorp in 1997. 2 So that 1998-1999 trends could be shown, 1998 figures were revised to exclude the credit card operation of Mountain West Financial, which was purchased by a non-bank financial intermediary and thus excluded from 1999 data. Table C. Percent Change in the Number of Small Business Loans by Loan Size, 1995-2002 Loan Size 96-971 97-981 98-992 99-00*2 00-01 01-02 <$100,000 26.6 19.3 10.1 26.9 10.1 45.0 $100,000-$250,000 8.6 1.8 5.4 7.0 5.9 8.8 $250,000-$1 Million 8.0 1.4 7.6 8.4 7.0 9.8 1Changes for 1996-1997 and 1997-1998 were estimated based on revised estimates for Keycorp in 1997. 2So that 1998-1999 trends could be shown, 1998 figures were revised to exclude the credit card operation of Mountain West Financial, which was purchased by a non-bank financial intermediary and thus excluded from 1999 data Twenty-four banks with significant small business credit card operations (credit card banks) had 10.8 million of the smallest loans, valued at $16.1 billion (Table D). More than 90 percent of these loans were made by six banks-7.7 million by Citibank, USA of Citigroup, GE Capital, and American Express Centurion and an another 1.9 million by Advanta Bank Corp, Bank One and MBNA. They accounted for 69 percent of the total number and 12.5 percent of the dollar value of the smallest loans outstanding from all banks in June 2002. The average loan outstanding for these banks amounted to $2,500, another indication of the dominance of credit card lending in these loan portfolios. It is difficult to estimate the increases in small business credit card activities by large banks over time because of the difficulties of separating the volume of credit card operations from other small business lending operations and identifying credit card operations acquired from other institutions, and because of continual reorganization and restructuring of credit card operations within BHCs. It is nevertheless fair to conjecture that the small increases in the dollar amounts of the smallest loans over this period came totally from business credit card activities (Table D). C. Small and Micro Business Loans Outstanding from Multi-Billion-Dollar BHCs Bank consolidations continued to affect the relative importance of banks of different sizes in the small business loan market. The number of commercial banks filing call reports continued to decline, though less than the year before. The number of the smallest banks with assets of less than $100 million declined by 305 (Table E). Most of these disappearing small banks either grew into the next size category, merged, or were acquired by larger banks. The number of banks in all other size categories has increased or remained at about the same level over the past several years. As the banking industry becomes more concentrated, it is important to examine the performance of large multi-billion-dollar bank holding companies (BHCs) in the small business loan markets. Most major multi-billion-dollar BHCs have become national lenders in the small business loan markets, extending small business loans in most parts of the United States. (Their participation in small business loan markets across the states is best depicted in the CRA database and will be discussed in section II of this report). Of a total of $484 billion in small business loans outstanding from all banks in June 2002, $218 billion was from the 58 large BHCs. As a group, these BHCs accounted for 45.0 percent of small business loans under $1 million and 70.9 percent of total domestic bank assets in the United States. These large BHCs increased both their presence in the small business loan market and their total share of assets slightly. Their share of total business loans declined somewhat (Table F). The increase was primarily in the smallest loans, up in dollar value from 38.9 percent to 42.9 percent and in number even more significantly, from 38.6 percent to 46.4 percent. The next larger loan sizes ($100,000 to $250,000 and $250,000 to $1 million), saw declines in dollar values from 44.0 percent to 43.6 percent and 48.1 percent to 46.1 percent, respectively (Table F) Again, the increased lending in the smallest size group was most likely the result of the promotion of business credit card programs and the acquisition of credit card operations from other financial institutions by large BHCs. This also explains the large increase in the number of the smallest loans from these banks-up from 4.2 million to 7.3 million over the 2001-2002 period. Table D. Amount and Percent Change in the Number and the Amount of Small Business Loans Outstanding, Excluding Credit Card Operations, June 2001 and June 2002 Loan Size 2001 2002 Percent of All Banks (June 2002) All Banks Number of Reporting Banks 8,158 7,949 Total Assets (Trillions of Dollars) 5,548 5,912 100.0 Loans under $100,000 (Billions of Dollars) 126.8 128.9 100.0 Loans under $100,000 (Millions of Loans) 10.79 15.65 100.0 All “Credit Card” Banks Number of Reporting Banks 21 24 Total Assets (Trillions of Dollars) 139.7 360.8 6.1 Loans under $100,000 (Billions of Dollars) 10.7 16.09 12.5 Loans under $100,000 (Millions of Loans) 5.86 10.81 69.0 All Banks Minus Credit Card Banks Number of Reporting Banks 8,137 7,925 Total Assets (Trillions of Dollars) 5,409 5,551 93.9 Loans under $100,000 (Billions of Dollars) 116.1 112.8 87.5 Loans under $100,000 (Millions of Loans) 4.94 4.84 31.0 See footnote 3. Table E. Number of Reporting Banks by Asset Size, 1995-2002* Bank Asset Size 1995 1996 1997 1998 1999 2000 2001 2002 <$100 Million 6,980 6,465 6,047 5,644 5,302 5,034 4,674 4369 $100 Million-$500 Million 2,521 2,548 2,590 2,656 2,683 2,751 2,777 2839 $500 Million-$1 Billion 256 260 292 303 290 302 320 353 $1 Billion-$10 Billion 326 326 300 302 309 293 306 311 >$10 Billion 66 71 64 61 75 79 76 77 Total 10,149 9,670 9,293 8,966 8,659 8,459 8,158 7,949 Table 5 provides the details of the number of banks by bank size for all states. Large BHCs were able to maintain their share in the overall small business loan markets during 2001-2002 because of their expanded effort to promote small business credit card operations. Slower demand for loans by large corporate borrowers and larger small business loans resulted in declines in these markets for these BHCs. Table F. Amount and Share of Total Assets, Business Loans, and Small Business Lending of Large Bank Holding Companies, June 2000 through June 2002 (Dollars in Billions, Numbers in Millions)* 2000 2000 2001 2001 2002 2002 Loan Sizes Amount/ Number As Percent of All Banks Amount/ Number As percent of All Banks Amount/ Number As Percent of All Banks Number of Multi-billion-dollar BHCs 59 56 58 Loans <$100,000 Amount (Billions of Dollars) 43.7 36.0 49.4 38.9 55.3 42.9 Number (Millions) 3.5 35.6 4.2 38.6 7.3 46.4 Loans 100K to <$250,000 Amount (Billions of Dollars) 38.4 43.6 40.3 44.0 41.9 43.6 Number (Millions) 0.327 44.5 0.341 43.9 0.395 46.6 Loans 250K to <$1 Million Amount (Billions of Dollars) 110.0 48.3 116.5 48.1 120.5 46.5 Number (Millions) 0.305 48.3 0.323 47.6 0.367 49.3 Total Small Business Loans (<$1 million) Amount (Billions of Dollars) 192.1 44.0 206.2 44.5 217.7 45.0 Number (Millions) 4.0 36.9 4.8 39.5 8.03 46.5 Large Business (>$1 Million) ($ Billions) 718.5 83.2 706.2 81.7 646.2 78.5 Total Business Loans (Billions of Dollars) 910.6 70.0 912.2 68.9 863.8 66.1 Total Assets (Billions of Dollars) 3,713 71.0 3,903 70.3 4,189 70.9 * Absolute numbers (dollar amount and number) are not strictly comparable for different years, as the total number of BHCs changed constantly. Moreover, because of mergers and acquisitions, it is not always clear whether all components of the BHCs have been correctly accounted for. II. Findings from the Reports by CRA Reporting Banks-Year 2001 A. Small Business Lending by CRA Reporting Banks and BHCs As discussed in the previous editions of this report, CRA data provide the best information on the location of loans made by a bank or a BHC during a certain time period, for example, in the year 2001. This section provides a profile of the geographic activities of small business lending by large reporting banks and BHCs in 2001. The increases in the shares of small business loans in the larger sizes ($100,000-$250,000 and $250,000 to $1 million) made by the CRA reporting banks were, at most, comparable to the increase in their shares of total assets (Table G). In 2001, a total of $203 billion in small business loans under $1 million were extended by the CRA-reporting banks, compared with $156 billion in 2000. Table H provides a profile of the small business lending activities by CRA-reporting banks by asset size in 2001. The CRA data confirm the findings in the call report data of the importance of multi-billion-dollar banks and BHCs in the market for the smallest loans. These banks account for a relatively large market share-66 percent of the dollar amount and 69 percent of the number of the smallest loans, compared with a smaller share of the larger small business loans (those of $250,000 to $1 million)-61 percent of the dollar amount and 59 percent of the number. B. Micro Business Lending by CRA Reporting Banks and BHCs In 2001, some 764 large banks and large BHCs made 4.90 million micro business loans valued at $62 billion. Again, multi-billion-dollar banks and BHCs are the major suppliers of these loans, accounting for 66 percent of the dollar amount and 69 percent of the number (Table H). Comparisons in micro lending over time are difficult using the CRA database because the number of banks required to report under the program changes-more banks are required to report as their assets increase over time. Table G. Assets and Business Loans Outstanding as Reported by Call Report Banks and by CRA-covered Banks. June 2002-A Comparison Loan Sizes Call Report Banks (CRBs) CRA-Covered Banks (CRA) CRA/CRBs (percent) 2002 CRA/CRBs (percent) 2001* CRA/CRBs (percent) 2000 * Business Loans <$100,000 ($ Billions) 128.9 86.9 67.4 64.5 61.0 Business Loans $100K-$250K ($ Billion) 96.1 70.2 73.0 73. 72.4 Business Loans <250,000 ($ Billions) 225.0 157.0 69.8 68.1 65.8 Business Loans $250K-$ 1M ($ Billion) 259.0 197.5 76.3 77.1 76.8 Business Loans <$1 Million ($ Billions) 484.0 354.6 73.3 72.8 71.5 Total Business Loans ($ Billions) 1,307.0 1,136.3 86.9 88.2 87.0 Total Assets (Billions of Dollars) 5,912.0 5,098.8 86.2 86.4 85.8 U.S. Small Business Administration, Office of Advocacy, Small Business Lending in the United States,1999 and 2000. Table H. Amount and Number of Loans made by CRA Reporting Banks in 2001** Bank Asset Size Over $50B $10B-$50 B $1B - $10B Less than $1B All CRA Banks Loans under $100,000 Amount (Billions of Dollars) $24.43 $16.74 $12.47 $8.36 $62.00 Number 1,948,852 1,413,423 1,096,652 439,146 4,898,073 Loans $250,000 to $1 million Amount (Billions of Dollars) $53.56 $32.75 $33.73 $20.61 $140.65 Number 151,610 96,586 102,958 66,699 417,853 Loans under $1 million Amount (Billions of Dollars) $77.99 $49.49 $446.20 428.97 $202.65 Number 2,100,462 1,510,009 1,199,610 505,845 5,315,926 Total Assets June 2002 (Billions of Dollars) 3,283.05 915.03 627.08 285.12 5,110.30 Total Business Loans June 2002 (Billions of Dollars) 644.78 223.64 181.30 86.57 1,136.30 Over $50B $10B -$50 B $1B - $10B Less than $1B All CRA Banks Loans under $100,000 Amount (Billions of Dollars) 39.4 27.0 20.1 13.5 100.0 Number 39.8 28.9 22.4 9.0 100.0 Loans under $250,000 Amount (Billions of Dollars) 38.1 23.3 24.0 14.7 100.0 Number 36.3 23.1 24.6 16.0 100.0 Loans under $1 million Amount (Billions of Dollars) 38.5 24.4 22.8 14.3 100.0 Number 39.5 28.4 22.6 9.5 100.0 Total Assets June 2002 (Billions of Dollars) 64.2 17.9 12.3 5.6 100.0 Total Business Loans June 2002 (Billions of Dollars) 56.7 19.7 16.0 7.6 100.0 ** For banks with balance sheet items identified from call reports (June 2002). Part Two: Directory of Top-ranking U.S. Small and Micro Business Lenders Small business lending and borrowing is mostly local in nature: both the borrowers and the lending offices are located in the same community or communities nearby. In an effort to provide information that will help small businesses shop more efficiently for credit and let banks know about their competitors in small business lending, the Office of Advocacy prepares a directory of micro business lenders. The micro business lending performance of individual banks is ranked in each state, and a top lender list is compiled (Tables 1A through 4B). Information for all reporting banks is available at the Advocacy website (http://www.sba.gov/advo/stats/lending). Table 1A. Small Business Lending of Large BHCs Using Call Report Data, June 2002 Table 1A ranks the small business friendliness of the 58 BHCs with total domestic assets in excess of $10 billion each. Each bank is ranked from 1 to 58 on each of four variables, which then are totaled and re-ranked from 1 to 58. For the first time, because of the increasing importance of small business credit card promotion by large banks, credit card banks are not excluded from these rankings. The top five small business-friendly lenders in June 2002, based on call report data, are :BB&T Corporation (2nd in 2001), Regions Financial Corporation (1st in 2001), Synovus Financial Corp, (5th in 2000 as TB&C Bancshares), First Citizens Bancshares (7th in 2001) and Citigroup, Inc. Table 1B. Micro Business Lending of Large BHCs Using Call Report Data , June 2002 Table 1B ranks the micro business friendliness of the 58 BHCs with total domestic assets in excess of $10 billion each. Each bank is ranked from 1 to 58 on each of four variables, which then are totaled and re-ranked from 1 to 58. The top five lenders in June 2002 are: Citigroup, Inc., MBNA Corporation (Not ranked in 2000) BB&T Corporation (1st in 2000), Wells Fargo (9th in 2001) and Colonial Bancgroup. One premier lender, Wells Fargo returned to the 4th place this year. Table 2A. Small Business Lending of Large BHCs Using CRA Data, 2001 Table 2A ranks the BHCs’ small business friendliness using CRA data. Call report data were employed in combination with information from the CRA to perform Advocacy’s four-variable ranking. As in the previous studies, member bank data were first consolidated to generate estimates for the ultimate owning companies. Since CRA data provide location-specific information for a bank’s small business lending, information on the number of states in which the BHC has substantial lending operations is also provided. Because of the increasing importance of small business credit card promotion by large banks, credit card banks are ranked for the first time. One major credit card bank has moved to the top as a result. The five top small business lenders for 2001, using CRA data, are: MBNA Corporation (not ranked in 2000); Citigroup; BB&T (2nd in 2000), Regions Financial Corp (1st in 2000), Synovus Financial Corporation. (3rd in 2000 as TB&C Bancshares). Table 2B. Micro Business Lending of Large BHCs Using CRA Data, 2001 Table 2B ranks the BHCs’ micro business friendliness using CRA data. Call report data were employed in combination with information from the CRA to perform Advocacy’s four-variable ranking. As in the previous studies, member bank data were first consolidated to generate estimates for the ultimate owning companies. Since CRA data provide location-specific information on a bank’s small business lending, information on the number of states in which the BHC has substantial lending operations is also provided. Again, MBNA ranked near the top in 2001 because the bank was ranked for the first time. The five top small business lenders for 2001, using CRA data, are: Citigroup Inc., MBNA Corporation; Wells Fargo; BB&T Corporation , and Synovue Financial Corporation. Table 3A. Small Business-Friendly Banks by State Using Call Report Data, June 2002 Table 3A provides a list of small business-friendly banks in individual states. The list includes the top 10 banks or the top 10 percent, whichever number is smaller. (Ties may increase the number.) The small business lending performance of a bank in a given state is measured on four criteria. The four rankings were summed to create a score for the small business lending activities of individual banks. A bank’s total score is the sum of the four individual decile rankings multiplied by 2.5 A complete ranking of all banks in each state is provided in the Advocacy webtsite. Note again that because the call report data are keyed to the bank headquarters location rather than the location of the lending activity, a significant amount of lending activity by large banks will not appear in the states where the activity occurs. Table 3B. Micro Business-Friendly Banks by State Using Call Report Data, June 2002 Table 3B provides a list of micro business-friendly banks in the states. The list includes the top 10 banks or the top 10 percent, whichever number is smaller. (Ties may increase the number.) The micro business lending performance of a bank in a given state is measured on four criteria. The four rankings were summed to create a score for the micro business lending activities of individual banks. A bank’s total score is the sum of the four individual decile rankings multiplied by 2.5 (See the appendix for a detailed discussion of the ranking methodology.) Table 4A. Top Small Business Lenders by State Using CRA Report Data, 2001 State lending information for large banks and BHCs is best captured in the CRA database. Table 4A provides a list of top small business lenders in a given state using CRA data. The list includes banks and BHCs with small business lending in a given state in excess of $50 million in 2001. Data for the members of a BHC were consolidated first to generate estimates for the ultimate owning companies. Consolidated estimates are then derived for each BHC in each state. Rankings are based solely on the dollar amount of small business lending (loans under $1 million) in this table because of the difficulty of generating two ratio variables for some banks and BHCs. Clearly, large banks and BHCs have an important role in the small business loan markets in many states. Table 4B. Top Micro Business Lenders by State Using CRA Report Data, 2001 Table 4B provides a list of top micro business lenders in a given state using CRA data. The list includes banks and BHCs with micro business lending in a given state in excess of $10 million in 2001. Again, rankings are based solely on the dollar amount of micro business lending (loans under $100,000) in this table for the reasons discussed above. Table 5. Number of Reporting Banks by Asset Size and by State, 1998-2002 Table 5 summarizes the number of banks in each state for each year from 1998 to 2002 and includes a listing by bank asset size for 2002. The asset sizes are under $1 million, $100 million to $500 million, $500 million to $1 billion, $1 billion to $10 billion, and over $10 billion. Appendix: Ranking Methodology, Table Descriptions, and Tables When possible, four variables were used to create a total score for the small business lending activities of individual banks: (1) the ratio of small business loans to total assets, (2) the ratio of small business loans to total business loans, (3) the dollar value of small business loans, and (4) the number of small business loans. The total ranking summarizes the four individual scores. Small banks tend to score higher in some categories than larger banks, and vice versa. For example, smaller banks have a higher percentage of total assets in small business loans, but larger banks lead in the sheer number and value of small loans. Using two ratio variables and two value variables allows a more balanced measure of lending performance by banks of different sizes. For large BHCs in the call reports (Tables 1A and 1B), simple rankings from 1 to 58 were performed for each of the four variables first. The four individual rankings were summed and re-ranked from 1 to 58 again for the total rank. For BHCs using CRA data (Tables 2A & 2B), ratio information was retrieved from call report data and used in combination with information from the CRA to perform Advocacy’s four-variable scheme for ranking. Again, simple rankings were performed and summed to obtain total rankings. To rank lending by all banks in a state based on call report data (Tables 3A & 3B), a decile ranking is used instead of a simple ranking. The decile ranking is a measure of where the individual bank falls in the distribution of all banks within a state for any given variable. Decile rankings range from 1 to 10. Banks in the top 10 percent of all banks in the state receive the maximum score of 10; banks in the lowest 10 percent receive a score of 1. Banks that do not lend to small businesses (loans under $1 million) receive a 0. Four top scores will sum to 40. To make the top score total 100 rather than 40, each score is multiplied by 2.5. For state lending using the CRA data (Tables 4A and 4B), banks were listed in order of the dollar amount of small business loans made in each state in 2000. Large institutions therefore appear at the top. Table Descriptions Table 1A. Small Business Lending of Large BHCs Using Call Report Data, June 2002 This table uses call report data to rank the small business friendliness of the large BHCs on the basis of four criteria that measure the small business lending emphasis in a bank’s loan portfolio. Small business loans (SBLs) are defined as loans under $1 million. Overall Ranking (Total Rank). Summary “small business friendliness” rankings of BHCs with respect to loans under $1 million. A simple ranking of 1 through 58 is derived from the sum of the four rankings from data found in columns 2 through 5. Ratio of Small Business Loans to Total Assets (SBL/TA). The ratio of the dollar value of small business loans under $1 million to total bank assets for each bank holding company. For the 58 large BHCs, the ratios of small business loans to total assets ranged from near 0 percent to 0.207 percent. Ratio of Small Business Loans to Total Business Loans (SBL/TBL). For the 58 large BHCs, the ratios of the value of small business lending to total business lending ranged from near 0 percent to 0.996 percent (for MBNA which has no business loans other than business credit cards). Total Dollar Amount of Small Business Lending by the BHC (SBL$). The total dollar amount (in millions) of small business loans of less than $1 million. Total Number of Small Business Loans (SBL#). The number of small business loans of less than $1 million. BHC Asset Size Class (Bk. Size). Asset size class of the BHC: $10 billion to under $50 billion ($10B-$50B) $50 billion and over (>$50B) Total Dollar Amount of Micro Business Loans (SSBL$). Similar to column 4, but for loans of less than $100,000, in millions of dollars. Total Number of Micro Business Loans (SSBL#). Similar to column 5, but for loans of less than $100,000. Total Dollar Amount of Mid-size Small Business Loans (MSBL$). Similar to column 4, but for loans of less than $250,000, in millions of dollars. Total Number of Mid-size Small Business Loans (MSBL#). Similar to column 5, but for loans of less than $250,000. Credit Card Loans to Total Assets (CRD/TA). The ratio of the dollar value of credit card loans to total assets. Table 1B. Micro Business Lending of Large BHCs Using Call Report Data, June 2002 This table uses call report data to rank the micro business friendliness of the large BHCs on the basis of four criteria that measure the micro business lending emphasis in a bank’s loan portfolio. Micro business loans (SSBLs) are defined as loans under $100,000. 1. Overall Ranking (Total Rank). Summary “micro business friendliness” rankings of BHCs with respect to loans under $100,000. A simple ranking of 1 through 58 is derived from the sum of four rankings from data found in columns 2 through 5. 2. Ratio of Micro Business Loans to Total Assets (SSBL/TA). The ratio of the dollar value of micro business loans under $100,000 to total bank assets for each bank holding company. For the 58 large BHCs, the ratios of micro business loans to total assets ranged from near 0 percent to 0.095 percent. 3. Ratio of Micro Business Loans to Total Business Loans (SSBL/TBL). For the 58 large BHCs, the ratios of the value of micro business lending to total business lending ranged from near 0 percent to 0.993 percent (for MBNA, again because of the dominance of business credit cards in the bank’s business loans). 4. Total Dollar Amount of Micro Business Lending by the BHC (SSBL$). The total dollar amount (in millions) of micro business loans of less than $100,000. 5. Total Number of Micro Business Loans (SSBL#). The number of micro business loans of less than $100,000. 6. Bk. Size. Asset size class of the BHC: $10 billion to under $50 billion ($10B-$50B) $50 billion and over (>$50B) 7. Total Dollar Amount of Small Business Loans (LSBL$). Similar to column 4, but for loans of less than $1 million, in millions of dollars. 8. Total Number of Small Business Loans (LSBL#). Similar to column 5, but for loans of less than $1 million. 9. Total Dollar Amount of Mid-size Small Business Loans (MSBL$). Similar to column 4, but for loans of less than $250,000, in millions of dollars. 10. Total Number of Mid-size Small Business Loans (MSBL#). Similar to column 5, but for loans of less than $250,000. 11. Credit Card Loans to Total Assets (CRD/TA). The ratio of the dollar value of credit card loans to total assets. Table 2A. Small Business Lending of Large BHCs Using CRA Data, 2001 Table 2A uses both CRA and call report data to rank-order the 58 largest BHCs on the basis of four criteria that measure the small business lending performance for a BHC. Two ratio variables were derived from the call reports. This table is formatted slightly differently from Table 1. The four individual scores will instead be provided in the tables on the website. Total Rank. Summary “small business performance” rankings of BHCs with respect to loans under $1 million. A simple ranking of 1 through 55 is derived from the sum of the four scores provided on the website. The four criteria used are the ratio of small business loans to total assets (SBL/TA); the ratio of small business loans to total business loans (SBL/TBL); the total dollar value of small business lending by the BHC (SBL$); and the total number of small business loans (SBL#). The Ratio of Small Business Loans to Total Assets (SBL/TA). This column shows the ratio of small business loans (<$1 million) to total assets for each bank. A high ratio indicates a bank’s willingness to place a large portion of its assets in small business lending. The Ratio of the Dollar Amount of Small Business Loans to Total Business Loans (SBL/TBL). The ratio of small business loans (<$1 million) to total business loans for each bank. Banks that make business loans predominantly to small firms will rank high in this category Total Dollar Amount of Small Business Lending by the BHC (SBL$). The total dollar amount (in millions) of small business loans of less than $1 million. Total Number of Small Business Loans (SBL#). The number of small business loans of less than $1 million. States w/Loans (#States). The number of states where the BHC extended small business loans Bk. Size. Asset size class of the BHC: $10 billion to under $50 billion ($10B-$50B) $50 billion and over (>$50B) Total Dollar Amount of Micro Business Loans under $100K by the BHC (SSBL$). Similar to column 2, but for loans of less than $100,000, in millions of dollars. Total Number of Micro Business Loans under $100K by the BHC (SSBL#). Similar to column 3, but for loans of less than $100,000. Table 2B. Micro Business Lending of Large BHCs Using CRA Data, 2001 Table 2B uses both CRA and call report data to rank-order the 58 largest BHCs on the basis of four criteria that measure the micro business lending performance for a BHC. Two ratio variables were derived from the call reports. The four individual scores will be provided in the tables on the website. 1. Total Rank. Summary “micro business performance” rankings of BHCs with respect to loans under $100,000. A simple ranking of 1 through 58 is derived from the sum of the four scores provided on the website. The four criteria used are the ratio of micro business loans to total assets (SSBL/TA); the ratio of micro business loans to total business loans (SSBL/TBL); the total dollar value of micro business lending by the BHC (SSBL$); and the total number of micro business loans (SSBL#). 2. The Ratio of Micro Business Loans to Total Assets (SSBL/TA). This column shows the ratio of micro business loans (<$100,000) to total assets for each bank. A high ratio indicates a bank’s willingness to place a large portion of its assets in small business lending 3. The Ratio of the Dollar Amount of Micro Business Loans to Total Business Loans (SSBL/TBL). The ratio of micro business loans (<$100,000) to total business loans for each bank. Banks that make business loans predominantly to small firms will rank high in this category 4. Total Dollar Amount of Micro Business Lending by the BHC (SSBL$). The total dollar amount (in millions) of micro business loans of less than $100,000. 5. Total Number of Micro Business Loans (SSBL#). The number of micro business loans of less than $100,000. 6. States w/Loans (#States). The number of states where the BHC extended micro business loans. 7. Bk. Size. Asset size class of the BHC: $10 billion to under $50 billion ($10B-$50B) $50 billion and over (>$50B) 8. Total Dollar Amount of Small Business Loans by the BHC (LSBL$). Similar to column 2, but for loans of less than $1 million, in millions of dollars. 9. Total Number of Small Business Loans by the BHC (LSBL#). Similar to column 3, but for loans of less than $1 million. Table 3A. Small Business-Friendly Banks by State Using Call Report Data, June 2002 1. Total Score (Total Rank). The total found in the first column is the score of the commercial bank in the state in which it is listed. The number is the aggregate measure of small business lending activity based on the sum of the four individual scores provided on the website 2. The Ratio of Small Business Loans to Total Assets (SBL/TA). This column shows the ratio of small business loans (<$1 million) to total assets for each bank. A high ratio indicates a bank’s willingness to place a large portion of its assets in small business lending. 3. The Ratio of the Dollar Amount of Small Business Loans to Total Business Loans (SBL/TBL). The ratio of small business loans (<$1 million) to total business loans for each bank. Banks that make business loans predominantly to small firms will rank high in this category. 4. Total Dollar Amount of Small Business Loans (SBL$). The dollar value (in thousands) of small business loans (<$1 million) outstanding as of June 30, 2002, from the bank. Larger banks will score well in this column and in column 5 because their size allows them to make many small loans, even if their commitment to small business lending, as shown by the ratios in columns 2 and 3, is low. 5. Total Number of Small Business Loans (SBL#). The total number of small business loans (<$1 million) outstanding for each bank. 6. Bk. Size. The asset size class of the reporting bank: · Under $100 million (<$100M) · $100 million to under $500 million ($100M-$500M) · $500 million to under $1 billion ($500M-$1B) · $1 billion to under $10 billion ($1B-$10B) · $10 billion and over (>$10B) 7. Total Score of Micro Business Loans (Total Rank). The total score of the banks based on their micro business lending. Total score is the sum of its four scores with respect to micro business loans of less than $100,000. A firm looking for a loan of less than $100,000 might do well to seek out a bank that ranks high in this column. 8. Dollar Amount of Small Business Loans (SSBL$). The dollar value (in thousands) of micro business loans of less than $100,000. 9. Number of Small Business Loans (SSBL#). The number of small business loans of less than $100,000 made by the bank. 10. Credit Card Loans to Total Assets (CRD/TA). The ratio of the dollar value of credit card loans to total assets. Table 3B. Micro Business-Friendly Banks by State Using Call Report Data, June 2002 1. Total Score (Total Rank). The total found in the first column is the score of the commercial bank in the state in which it is listed. The number is the aggregate measure of small business lending activity based on the sum of the four individual scores provided on the website 2. The Ratio of Micro Business Loans to Total Assets (SSBL/TA). This column shows the ratio of micro business loans (<$100,000) to total assets for each bank. A high ratio indicates a bank’s willingness to place a large portion of its assets in small business lending. 3. The Ratio of the Dollar Amount of Micro Business Loans to Total Business Loans (SSBL/TBL). The ratio of micro business loans (<$100,000) to total business loans for each bank. Banks that make business loans predominantly to small firms will rank high in this category. 4. Total Dollar Amount of Micro Business Loans (SSBL$). The dollar value (in thousands) of micro business loans (<$100,000) outstanding as of June 30, 2002, from the bank. Larger banks will score well in this column and in column 5 because their size allows them to make many small loans, even if their commitment to micro business lending, as shown by the ratios in columns 2 and 3, is low. 5. Total Number of Micro Business Loans (SSBL#). The total number of micro business loans (<$100,000) outstanding for each bank. 6. Bk. Size. The asset size class of the reporting bank: · Under $100 million (<$100M) · $100 million to under $500 million ($100M-$500M) · $500 million to under $1 billion ($500M-$1B) · $1 billion to under $10 billion ($1B-$10B) · $10 billion and over (>$10B) 7. Total Score of Small Business Loans (Total Rank). The total score of the banks based on their small business lending. Total score is the sum of its four scores with respect to small business loans of less than $1 million. A firm looking for a loan of less than $1 million might do well to seek out a bank that ranks high in this column. 8. Dollar Amount of Small Business Loans (LSBL$). The dollar value (in thousands) of micro business loans of less than $1 million. 9. Number of Small Business Loans (LSBL#). The number of small business loans of less than $1 million made by the bank. Table 4A Top Small Business Lenders by State Using CRA Data Table 4Ais formatted differently from Table 3A, which displays call report data. The table lists the bank name-the name of the ultimate owning bank or bank holding company-as well as the home state of the bank. It provides the dollar amount and number of small business loans under $1 million, mid-sized small business loans under $250,000, and micro business loans under $100,000. Only banks with small business loan totals in excess of $50 million in a given state in 2001 are listed. 1. Amount of Small Business Loans (SBL$). The dollar amount, in thousands, of loans under $1 million made in 2001. 2. Number of Small Business Loans (SBL#). The number of loans of less than $1 million made. 3. Bk. Size. The total assets of the owning bank by size category: $1 billion to under $10 billion ($1B-$10B) $10 billion to $50 billion ($10B-$50B) $50 billion and over (>$50B) 4. Dollar Amount of Mid-sized Small Business Loans (MSBL$). The dollar amount, in thousands, of mid-sized business loans of less than $250,000. 5. Number of Mid-sized Loans (MSBL#). The number of mid-sized business loans. 6. Dollar Amount of Micro Business Loans (SSBL$). The dollar amount, in thousands, of loans of less than $100,000. 7. Number of Micro Business Loans (SSBL#). The number of loans of less than $100,000. Table 4B Top Micro Business Lenders by State Using CRA Data, 2001 Table 4 is formatted differently from Table 3, which displays call report data. The table lists the bank name-the name of the ultimate owning bank or bank holding company-as well as the home state of the bank. It provides the dollar amount and number of micro business loans under $100,000, supplemented by mid-sized small business loans under $250,000, and small business loans under $1 million. Only banks with micro business loan totals in excess of $10 million in a given state in 2001 are listed. 1. Amount of Micro Business Loans (SSBL$). The dollar amount, in thousands, of loans under $100,000 made in 2000. 2. Number of Micro Business Loans (SSBL#). The number of loans of less than $100,000 million made. 3. Bk. Size. The total assets of the owning bank by size category: $1 billion to under $10 billion ($1B-$10B) $10 billion to $50 billion ($10B-$50B) $50 billion and over (>$50B) 4. Dollar Amount of Mid-sized Small Business Loans (MSBL$). The dollar amount, in thousands, of mid-sized business loans of less than $250,000. 5. Number of Mid-sized Loans (MSBL#). The number of mid-sized business loans. 6. Dollar Amount of Small Business Loans (LSBL$). The dollar amount, in thousands, of loans of less than $1 million. 7. Number of Small Business Loans (LSBL#). The number of loans of less than $1 million.