The Cross-Section of Bank Value

Abstract We study the determinants of value creation in U.S. commercial banks. develop novel measures individual banks’ productivities at collecting deposits and making loans that we relate to bank market values. find deposit productivity is responsible for two-thirds median most variation across Variation driven by differences banks technology, customer demographics, power. also evidence synergies between deposit-taking lending. Our findings suggest there significant heterogeneity ability capture manufacturing safe assets.