Why Choose a Community Bank?

What is a Community Bank?

While there is no exact definition to differentiate community banks from large regional or national banks, the Federal Deposit Insurance Corporation (FDIC) generally recognizes community banks as those with less than $10 billion in assets. Community banks have a strong presence in the communities they serve and conduct most of their business in those areas. As a result, there is a special emphasis placed on being financial stewards for the local individuals and businesses who trust them with their money. The Independent Community Bankers of America (ICBA) finds that community banks provide roughly 60% of all small business loans and over 80% of agricultural loans. Additionally, there are nearly 50,000 locations across the U.S. that employ over 700,000 Americans.

What Sets Community Banks Apart?

There are several advantages to working with a community bank. A few of the most notable differences between community banks and large banks can be seen through a commitment to relationships, investment in local communities, personalized attention, and community involvement.

  • Built on relationships – community banks make it their mission to focus on the unique needs of their customers and communities. One survey found that 79% of small business owners who applied for credit with a small bank were satisfied with the experience, in comparison to only 67% at large banks and 49% with online lenders
  • Investment in local communities – in most cases, the funds you keep at a community bank stay in the community, and a portion is used to support local non-profits and initiatives
  • Personalized attention – despite the cliché, you are not just another customer at a community bank. Local decision making allows community banks to provide creative solutions that may not be explored by larger banks who rely on formulaic decision making
  • Commitment to community service – community banks are passionate about the areas they serve and often give back through volunteering efforts, financial literacy education, and other local projects

Supporting the Needs of the Community

As a business, it is difficult to grasp the unique needs of a community if you are not investing your time and resources to truly understand how an area is underserved. Community bankers often live in the same neighborhoods they serve, which gives them a personal connection to the people and businesses that also call those places home. This provides opportunities for personalized banking built on relationships.

This was evident during the pandemic, when many businesses relied on banks for Paycheck Protection Program (PPP) loans. During that time, community banks issued approximately 60% of all PPP loans, which added up to 4.7 million loans totaling $429 billion. This helped save an estimated 49 million jobs across the U.S., and was especially helpful to businesses with minority owners, who received 72% of all such loans.

Why Choose a Community Bank?

Banking with a community bank is a lot like supporting a local small business. The bank can use this money to provide loans to local businesses and individuals, and to help fund community initiatives. This helps develop thriving neighborhoods full of people who are engaged and invested in the local community around them. Doesn’t that sound like an exciting place you would be proud to call your home?

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