Organizational Structure and Performance at Bank Holding Companies.

This paper provides empirical evidence on the relationship between organizational structure and performance at bank holding companies (BHCs). First, we study a panel of U.S. commercial banks to see how holding-company affiliation affects lending, capital, and income. We find that membership in a multi-bank BHC allows banks to do more lending, and hold less capital, than unaffiliated banks, suggesting that these organizations benefit from access to internal capital markets that reallocate resources within the firm. Second, we use a panel of publicly traded BHCs to examine how the number of commercial bank charters affects lending, capital, income, and market measures of efficiency.