Fahlenbrach, RüdigerPrilmeier, RobertStulz, René M.2018-10-092018-10-092018-10-092018-03-0110.1093/rfs/hhx109https://infoscience.epfl.ch/handle/20.500.14299/148767From 1973 to 2014, the common stock of U.S. banks with loan growth in the top quartile of banks over a three-year period significantly underperformed the common stock of banks with loan growth in the bottom quartile over the next three years. After the period of high growth, these banks have a lower return on assets and increase their loan loss reserves. The poorer performance of fast-growing banks is not explained by merger activity. The evidence is consistent with banks, analysts, and investors being overoptimistic about the risk of loans extended during bank-level periods of high loan growth.text::journal::journal article::research article