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Tickers in this Article: WFC, BAC, JPM, FCNCA, FULT, BXS, SYN, WBS
This past May, President Obama proclaimed the week of May 17 through May 23, "Small Business Week." In his proclamation, he noted that small business in the U.S. creates 70% of all new jobs. Given this statistic, it may be said that real economic recovery will be a result of small business turning on its job creation engine and getting America working again. Unfortunately, jobs cost money, which business owners don't have, and banks won't lend - at least not at the rate necessary to make a difference. In fact, the 22 largest recipients of TARP-related funds cut small business lending by $11.6 billion in the six months following receipt of those funds in April.

Shame on them. Fortunately, there are some banks willing to go to bat for small business in 2010. I believe their faith in
Main Street
will be rewarded in the future. Investors might want to take note. (We provide six tips for creating a winning business in a losing economy. To learn more, check out Starting A Small Business In Tough Economic Times.)
IN PICTURES: 10 Retirement-Wrecking Moves

Top Small Business Lenders With Market Cap > $900 Million

Small Business Loans % of Total Business Loans
Market Cap
First Citizens Bancshares (Nasdaq:FCNCA)
First Citizens, IronStone
Fulton Financial (Nasdaq:FULT)
Fulton, Skylands, Columbia
BancorpSouth (NYSE:BXS)
Synovus Financial (NYSE:SNV)
Multiple Brands
Webster Financial (NYSE:WBS)

More Loans in 2010
Although Wells Fargo (NYSE:WFC) reduced its small business lending by $3 billion between April and November of 2009, it is by far the biggest small business lender in America, extending $73.5 billion in loans. While this is only 24.3% of its loan portfolio, it's still $32 billion more than second place Bank of America (NYSE:BAC). And it's not as if it's abandoning the business. In 2010, Wells Fargo intends to make $16 billion in new loans, 25% more than in 2009. Wells Fargo management believes the economic recovery is slowly taking hold and the number of qualified loan candidates will rise considerably this year. Others that intend to increase the number of loans made to small business owners in 2010 include JPMorgan Chase (NYSE:JPM), with an additional $4 billion, Bank of America, with $5 billion, and $400 million from small-business-focused Webster Financial.

Banks of all sizes have to realize that their profits won't grow substantially until the economy rebounds and it can't do that if small business isn't creating jobs. It's a vicious cycle that needs to end. Wells Fargo and its competitors appear to be ready to concede this.

First Citizens Knows Small Business
Wells Fargo and Bank of America aside, the financial institution that intrigues me the most is First Citizens BancShares (Nasdaq:FCNCA), a Raleigh-based financial holding company with two operating units: First Citizens Bank & Trust Company and IronStone Bank. Together, the units operate in 12 states and generate a significant portion of the company's revenue and earnings. First Citizens is so successful at business banking that it has won numerous national and regional awards for its customer service. For the third quarter ended September 30, 2009, its net interest income increased 6% to $117 million due to a $1.09 billion increase in its interest-earning assets. In addition, it made a one-time, after-tax gain of $63.9 million by acquiring two failed West Coast banks: Temecula Valley Bank in California and Venture Bank in Washington. The gains were the difference between the fair value of the assets and the liabilities assumed. The two deals give it a greater presence in the western part of the country. Perhaps it's this kind of shrewdness that prompted FBR Capital to initiate coverage of the bank with an "Outperform" rating.

Bottom Line
We all know Wells Fargo's heritage. It's been one of Warren Buffett's holdings for years. If you believe in small business and are looking for a bank to invest in, Wells Fargo is a good bet. However, if you are interested in something smaller and nimbler, First Citizens or Webster Financial should do the trick. These banks' faith in small business won't go unrewarded. (To find out how you can succeed as a small business owner, read How To Make A Million In Your Small Business.)

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