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The role of specific heritage among Hispanic-owned banks in America

Russ Kashian (Department of Economics, University of Wisconsin-Whitewater, Whitewater, Wisconsin, USA)
Rashiqa Kamal (Department of Finance and Business Law, University of Wisconsin-Whitewater, Whitewater, Wisconsin, USA)
Yuhan Xue (Department of Economics, University of Wisconsin-Whitewater, Whitewater, Wisconsin, USA)

Managerial Finance

ISSN: 0307-4358

Article publication date: 16 November 2020

Issue publication date: 22 April 2021




Specific types of Hispanic-owned banks (HOBs), including those related to Brazilian, Cuban, Mexican or Puerto Rican heritage, have not be analyzed to date. There are important differences between the relevant communities, including geographic location, language barriers, population size and the importance of remittances to foreign nations. The analysis here sheds light on these differences.


HOBs with the Federal Deposit Insurance Corporation (FDIC)-designated minority-owned depository institution (MDI) designation are identified, along with bank ownership heritage. Financial data, a measure of market competition, and demographics of depositors from 2003 to 2017 are utilized in an exploratory analysis comparing banks by HOB type, with random effects regressions for the pre-collapse (2003–2006) and post-collapse (2009–2017) periods.


Although each of the four types of HOBs serve Hispanic and poor communities, there are substantial differences. For example, Brazilian and Puerto Rican banks on the island held high levels of nonperforming loans (NPLs) post-collapse, with the Brazilian and Mexican banks expanding levels of risky commercial real estate (CRE) lending post-collapse, while the Cuban banks contracted CRE lending. Differences in terms of return on assets (ROAs), the cost of borrowed funds and the tier-1 risk-based capital ratio are also identified.

Social implications

HOBs, like Latinos in the USA, are culturally heterogeneous and likely operate in different ways depending upon the culture and economic circumstances of the communities where they operate.


Although there is substantial research on MDIs, this is the first analysis which treats HOBs as culturally heterogeneous. Further research of this type is warranted.



Kashian, R., Kamal, R. and Xue, Y. (2021), "The role of specific heritage among Hispanic-owned banks in America", Managerial Finance, Vol. 47 No. 5, pp. 656-669.



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