Highlight: Community banks continue to play a pivotal role for small businesses
Community banks continue to support local communities by actively lending to small businesses and participating in the Paycheck Protection Program despite a smaller share in total industry loans.
Source: Reports of Condition and Income (June 30, 2021)
Community banking organizations_ (CBOs) represent nearly 95 percent of all commercial bank charters in the U.S. but maintain just 17 percent of total industry loans (and just 13 percent of total industry assets).
CBOs hold a disproportionately large share of small business loans_ in the U.S. with 40 percent total market share. Though CBOs maintain the largest share of small business loans compared to regional banking organizations ($10 to $100 billion) and large banking organizations (above $100 billion), CBO market share has declined by 13 percentage points over the past decade.
In response to the COVID-19 pandemic, Congress introduced the Paycheck Protection Program (PPP) to help businesses continue to employ their workforce. Again, despite having a smaller share of total industry loans, CBOs were crucial providers of credit under the program and accounted for 38 percent of total PPP loans in June 2020 and currently hold one-third of remaining PPP loans.
