What sets community banks apart
Local Focus: Unlike megabanks that often operate without a strong connection between where they gather deposits and where they make loans, community banks focus on reinvesting in the neighborhoods where their depositors live and work, fostering growth for local businesses and communities.
Relationship Banking: Community bank officers know their customers and may consider family history and discretionary spending in making loans. Megabank loan officers apply impersonal qualification criteria, such as credit scoring, without regard to individual circumstances.
Innovation: As high-tech, high-touch local financial institutions, community banks work with their customers to ensure they have access to innovative products and services while partnering with and investing in financial technology providers. A prime example of community bank innovation is showcased through ICBA’s ThinkTECH Accelerator.
Lending Leadership to Small Business: According to the Federal Reserve’s Small Business Credit Survey: Report on Employer Firms, community banks are the small business lender of choice.
- 81% of community bank loan applicants were satisfied with their experience, compared with 68% at large banks, 62% at finance companies, and 48% at online lenders.
- Community banks’ net satisfaction score of 77% topped large banks by 15 points, finance companies by 25 points, and online lenders by 48 points.
Timely Decision-Making: Community banks offer nimble decision-making on business loans because decisions are made locally. Megabanks must often convene loan-approval committees located in another state, far away from their customers.
Community Engagement and Accessibility: Community bank officers are typically deeply involved in their local communities, while megabank officers are often detached from the communities where their branches are located.
As local small businesses themselves, community banks only thrive when their customers and communities flourish. They answer to Main Street. Megabanks are driven by shareholder value and answer to Wall Street.
Often referred to as America’s Favorite Lenders, community banks:
- Represent $4.0 trillion in consumer, small business and agricultural loans
- Have nearly 45,000 locations nationwide
- Employ nearly 700,000 people
- Make roughly 60% of U.S. small-business loans under $1 million and 80% of banking industry agriculture loans
- Are the only physical banking presence in one in three U.S. counties
