Research

Working Papers:

• "The Effect of Monetary Policy on Community Bank Financial Reporting"

  • Abstract: I examine how community banks’ deposit strategies shape risk-taking, financial reporting, and profitability during periods of monetary tightening. Using the rapid increase in interest rates beginning in 2022 as a shock to banks’ funding strategies, I find that deposit-sensitive community banks increase portfolio risk, shifting away from low-risk government-backed securities and toward higher-risk assets. These banks subsequently experience higher charge-offs and weaker solvency, consistent with increased economic risk rather than changes in regulatory classification alone. Despite this increase in risk, deposit-sensitive banks report lower loan loss provisions and become more reactive to realized loan deterioration, consistent with underprovisioning. More robust internal reporting systems do not mitigate either the increased risk-taking or underprovisioning. Finally, deposit-sensitive banks experience greater deposit growth following monetary tightening, but this growth comes at a persistent profitability cost. Overall, the results show that deposit strategies have important consequences for banks’ risk-taking, financial reporting, and performance during periods of rising interest rates. 

  • Dissertation

• "Lender Financial Reporting and Debt Contracting"

  • Abstract: Using the issuance and adoption of the current expected credit loss (CECL) standard as an exogenous shock to lenders’ financial reporting, I study the relation between lenders’ financial reporting and debt contracting. I investigate this relation through measuring three aspects of contracting: complexity, restrictive language, and covenant structure. I find that lenders significantly reduce the number of covenants included in their debt contracts following the issuance of CECL, but do not change covenants following the adoption of CECL. Additionally, I find that lenders do not change the complexity or restrictive language after both CECL issuance and adoption. I also find that small borrowers see the greatest reduction in covenant use following CECL. I ensure my findings are not explained by a change in lenders’ screening efforts nor the mechanical result of contract renegotiation. These results imply that CECL reduced lenders’ incentives to monitor due to the early recognition of losses and increased transparency around loan losses.

Research in Progress:

• "Effect of Private Equity Acquisition on Financial Reporting Accuracy: Evidence from the Health Care Industry"

• "Media Ownership and Content Bias" (with Jon Woo)

• "Bank Participation in Dividend Recaps"

• "Non-fundamental Trading around Earnings Announcements"