Submissions to the Financial System Inquiry have painted a picture of the regional and mutual banking sectors being squeezed out of the market by big banks, which enjoy a funding advantage. However, the latest Australian Prudential Regulation Authority banking statistics give a different impression.During the three months to August, banks' mortgage books grew by an average of 1.7 per cent. Among the big banks ANZ's book grew by two per cent, NAB's grew by 1.9 per cent, Westpac's by 1.7 per cent and CBA's by 1.6 per cent.Over the same period Teachers Mutual Bank's book grew by 5.1 per cent, bankmecu's by 3.2 per cent, GT Mutual Bank's by 2.2 per cent, ME Bank's by 2.1 per cent, Police and Nurses by two per cent and Defence Bank by 1.7 per cent.The outlier, as usual, was Macquarie Bank, with growth of 8.1 per cent over the three months.Like the big banks, small lenders have had better access to wholesale funding this year and retail deposit flows have remained strong.Another factor is that brokers are giving them a better reception. With growth in the mortgage market improving steadily, brokers are more prepared to offer a wider range of options.Teachers Mutual Bank, which has the highest growth rate after Macquarie, entered the broker distribution market for the first time late last year.