Operating Performance of the U.S. Commercial Banks After Ipos: An Empirical Investigation‪.‬

INTRODUCTION Financial services are perhaps the most significant economic sector in modern societies. In the more advanced service economies, the financial sector is a major source of employment. Given the important role of financial institutions in the economy, any research that helps explain what drives their performance would be beneficial. During the 1990s, due to the stellar performance in the banking industry, most banks had no difficulty in meeting their capital requirements (Bomfim and English, 1999). From 1992 to 1998, the share of the banking industry assets at "well-capitalized" banks rose from around 70% to more than 95%. During this period banks grow their net loan at a rate that exceeds the overall banking industry and actually benefited from using their offering proceeds to enlarge their loan portfolio. During this period, what drives the overall improvements is the focus of our research. The focus attention in this research would be on the banking institutions that went public during this time and try to bring some plausible explanations for the overall improved subsequent performance of these institutions.