The strong earnings growth among the S&P 500 is convincing evidence that the big companies have generally recovered well from the Great Recession, but it’s interesting to hear reports from smaller companies that show the same trend.


This is the segment known as the middle market -- generally companies that are bigger than a mom-and-pop, up through about $1 billion in sales.
“These companies really cut costs during the Great Recession, converting a lot of their fixed costs to variable costs, particularly on the labor side,” said Gary O’Brien , a co- founder of the middle market investment banking firm Quetico Partners.  “Now with stronger demand , they have not significantly increased their costs.”
That means that many are making a lot of money.
O’Brien cautioned that his firm works with a selective group of companies and may not have a complete picture. But in his client base the companies and their owners are likely not talking much about a fragile recovery or economic uncertainty. Business is better than just OK. 
That rosy view is confirmed by banking companies like Bremer Financial, that the companies that survived the last recession have dramatically improved balance sheets and strong cash earnings.  And the recovery of this segment shows up in the data reported by the Federal Reserve Bank of Minneapolis. It reports that non-current and delinquent commercial and industrial loans as a percent of bank capital and allowances have continued to decline in Minnesota, ending 2012 well below the 20-year median.