Community banking: Where people come first
Customers tired of the impersonal feel of larger banks may find a better relationship from small rivals.
In a recessionary economy where the statement "too big to fail" has become associated with global megabanks such as Bank of America and Citibank, a less visible but encouraging trend is continuing to gain strength: the expansion of community banking.Skip to next paragraph
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More than 8,500 community banks, 98 percent of all banking institutions, are conducting business in 50,000 locations throughout the United States.
Most banks do not fit the profile of the supersized financial institutions. Almost 93 percent of all banks in the US have assets under $1 billion, with nearly 40 percent having less than $100 million, according to the FDIC.
Ironically, at a time when businesses are routinely shutting down, community banks are proliferating. These banks are often the partners of small local businesses, providing more than 35 percent of all loans under $1 million, according to the Small Business Administration.
"Community banks are locally owned, and their assets are being put to use in the community in such products as loans to small business and consumer loans," explains Aleis Stokes, director of public relations for the Independent Community Bankers of America (ICBA). "They are competitive in rates for home mortgages, understanding [of] the marketplace, and willing to support the local community in challenging times."
Customers looking for a personal relationship with their bank rather than simply a place to make financial transactions are increasingly seeking community banks.
Bruce Jensen understands that desire for a personal touch. A year ago, he worked to establish Town and Country Bank in St. George, Utah. With more than 33 years of banking experience, including positions at Wells Fargo and Bank of America, Mr. Jensen wanted to create a bank that emphasized personal services. For example, it offers "concierge banking," where customers sit with bank representatives at desks rather than standing in line waiting for a teller. It also offers to pick up deposits from its business clients, saving them the trip.