CSBS: Community Banks Took on Significant Share of PPP Lending

Community banks took on an outsized share of Paycheck Protection Program lending, according to a blog post today by the Conference of State Bank Supervisors. Nationwide, community banks’ outstanding balance of PPP loans to total assets was 6.04%, compared to 1.81% for non-community banks.

Through the PPP, allocated 4.89 million forgivable loans were made, totaling more than $521 billion, and community banks made 28% of the loans, or $148 billion. The total share of PPP loans by community banks was much higher than their 12% share of total industry assets and 15% share of total industry loans, CSBS said.

“Community banks’ relationship approach to lending allows them to make decisions and provide solutions to small businesses,” CSBS said. “For many small businesses, community banks are often the only way to access loans and other financial services, which may help explain why the PPP participation rate for community banks is so high.”