The performance of de novo commercial banks: A profit efficiency approach

Document Type

Article

Publication Date

1-1-1998

Abstract

We examine the profit efficiency of US banks chartered between 1980 and 1994. Our results suggest that profit efficiency improves rapidly at the typical de novo bank during its first three years of operation, but on average takes about nine years to reach established bank levels. Excess branch capacity, reliance on large deposits, and affiliation with a multibank holding company are associated with low profit efficiency at de novo banks. De novo national banks are initially less profit efficient than are state-chartered de novos, perhaps reflecting differences in the chartering philosophy of federal and state bank regulators.

Identifier

0000110390 (Scopus)

Publication Title

Journal of Banking and Finance

External Full Text Location

https://doi.org/10.1016/S0378-4266(98)00025-9

ISSN

03784266

First Page

565

Last Page

587

Issue

5

Volume

22

This document is currently not available here.

Share

COinS