Who is lending to small business? - Sageworks

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Who is lending to small business? Wells Fargo, Bank of America and JP Morgan Chase take top three spots Raleigh, N.C., March 23, 2015 – As a brief glance at their marketing materials may indicate, many U.S. financial institutions appear to be focusing more on the small business segments of their loan portfolios. “‘Small business’ has become a buzzword in the industry,” said Sageworks analyst James Noe. The “buzz” is not without merit: With private companies seeing strong revenue growth and profitability, Noe explained, smaller U.S. companies are becoming more and more attractive as prospects in the eyes of lending departments. According to data from Sageworks Bank Information, small business loans outstanding totaled $12 billion more in 2014 than the previous year, marking the first annual increase since 2010. “Banks may feel that these companies are in a good position to take on debt,” he said. “You can see that reflected in the increased overall lending volume to small businesses,” he said. However, which banks are standing out from the pack in the small business space? In order to find out, Sageworks Bank Information analysts looked at two different ways of measuring U.S. financial institutions’ appetite for small business loans: volume and percentage of total loans. The first method involved ranking U.S. banks by the total dollar amounts loaned to small businesses last year. This ranking reveals familiar names like Wells Fargo, Bank of America and JPMorgan Chase at the top of the list. However, Noe explained that due to the massive amount of loans the large banks grant overall, it’s important to pair this metric with another: the percentage of small business loans compared to total loans in a bank’s portfolio. This metric indicates the relative priority and focus that a bank gives to small business lending compared with other types of lending. With that qualifier in mind, Synovus, headquartered in Georgia, and First-Citizens Bank, headquartered in North Carolina, stand out as two of the larger banks that dedicate a fairly significant portion of their loan portfolios to small businesses. The second method involved ranking banks by the aforementioned percentage of loans dedicated to small businesses. Looking at this metric, Farmers State Bank in Humphrey, Neb., topped the list, with nearly 97 percent of their total loan dollars allocated to small businesses this past year. St. Lake City’s own Pitney Bowes Bank also stood out on this list, dedicating 95 percent of its loan dollars to small business owners in 2014; this equates to nearly $330 million worth of loans dedicated to small businesses from that institution alone. The dataset was researched through Sageworks Bank Information, a web-based data platform that includes data on all U.S. banks and credit unions.

Top 15 Lenders to Small Business ($ Amount) - Year Ended 12/31/14 Name Wells Fargo Bank, National Association Bank of America, National Association JPMorgan Chase Bank, National Association U.S. Bank National Association Branch Banking and Trust Company PNC Bank, National Association Citibank, National Association Regions Bank Chase Bank USA, National Association Manufacturers and Traders Trust Company TD Bank, National Association Suntrust Bank Synovus Bank First-Citizens Bank & Trust Company Bank of the West

$ Amt. Total Small Business Loans $34,715,000,000 $33,352,000,000 $19,309,000,000 $17,131,904,000 $9,162,906,000 $9,072,095,000 $8,802,000,000 $6,087,359,000 $5,621,863,000 $5,575,160,000 $4,913,858,000 $4,755,220,000 $4,384,835,000 $4,166,024,000 $3,983,982,000

$ Amt. Total Small Business Loans (% of Total Loans) 4.3% 4.4% 3.5% 6.8% 7.8% 4.4% 2.5% 7.8% 5.7% 8.4% 4.4% 3.5% 20.7% 29.4% 7.8%

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Top 15 Lenders to Small Business (% of Total Loans) - Year Ended 12/31/14 Name Farmers State Bank Bank of Glen Ullin The Pitney Bowes Bank, Inc. Bank of Hazelton Farmers State Bank Farmers and Merchants State Bank of Springfield Farmers State Bank The First National Bank of Howard The Guide Rock State Bank Plaza Bank The Tilden Bank State Bank of Chandler Ford County State Bank The First National Bank of Fleming Nebraska State Bank

$ Amt. Total Small Business Loans (% of Total Loans) 96.9% 96.5% 95.4% 92.7% 90.9% 90.9% 89.8% 89.7% 89.5% 89.1% 88.7% 88.3% 88.2% 88.2% 87.4%

$ Amt. Total Small Business Loans $13,618,000 $46,421,000 $329,087,000 $19,949,000 $15,721,000 $75,236,000 $12,367,000 $3,252,000 $16,526,000 $45,406,000 $50,011,000 $26,623,000 $20,063,000 $15,688,000 $6,044,000

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Loans from U.S Banks to Small Businesses (Total $ Amount) – Trailing 5 Years Metric 2010 2011 2012 2013 2014 $ Amt. Total Small Business Loans $672,246,750,000 $649,511,471,000 $621,785,182,000 $618,670,864,000 $630,808,325,000 % Change From Previous Year -3.4% -4.3% -0.5% 2.0% Source:

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