The Wall Street Journal touted Citibank’s news release verbatim last week to proclaim that “small business lending reached $9.1 billion in 2013, surpassing three-year commitment to SBA.” Pardon the opinion, but to me it’s all kerfuffle, codswallop and balderdash.
To position Citibank as the nation’s leading benefactor to small business owners is like calling Pope Francis the best preacher in the world. Neither of these characterizations fit the bill, but at least the Holy Pontiff is not flaunting himself to be who he is not.
To brashly publish this representation, Citibank retreats behind the loose “small business” definition in quarterly call reports, which are required by all insured banks. The admirable effort to break out small business loan statistics is often distorted by the methodology of how these numbers are derived.
In the instructions issued by the Federal Financial Institutions Examination Council (FFIEC), this category is merely a measurement of how many loans the bank has on the books to privately-owned concerns for $1 million or less. That may include corporate credit cards, small investor loans and non-profit accounts as well.
This information conundrum can be summarized in the old Lite® beer TV commercial you’ll remember, “Taste Great!” “LESS FILLING!”
So what did Citibank actually do? While WSJ reported $9.1 billion, my calculation of their 12/31/13 call report totals $8.48 billion. Of that sum, $55 million is in Ag loans, $718 million is in CRE loans and $8.488 billion in C&I loans. We’ll never know how many of these loans fit within the SBA’s standard definition of ‘small business.’
For the record, in FY 2013, Citibank made 102 SBA loans (#56) totaling $71.9 million (#44). A couple of their peers did considerably more: Wells Fargo closed $1.47 billion (#1) with 3,481 loans (#2), while JPMorgan Chase funded $486 million (#4) with 3,637 loans (#1).