Community Banks Offer Several Advantages

Quick credit decisions and local ownership combined with personal service and reinvestment in the community are among the top reasons to choose a community bank over a large, commercial financial institution.

"When it comes to loans, decision makers are on-site, accessible and ready to help customers through the lending process quickly and efficiently," says one bank representative. "They're committed to knowing their customers' personal situations and recommending products or services that are tailored to those specific needs."

According to the Independent Community Bankers of America (ICBA), there are nearly 7,000 community banks across the United States. Located in small rural towns, suburbia and large-city neighborhoods, they improve this country's overall economy and communities by lending to local customers and funding nearly 60% of all small businesses under $1 million.

Not only do consumers have a wide array of products and services to choose from when they utilize a smaller bank, but they also benefit from a number of other advantages. These include:

• Personal service: When consumers call their local community bank, they won't be talking to someone halfway around the world. Instead, they'll be talking to a banker who resides and works in the same community they do. Often, long-term relationships develop between these institutions and their customers. Smaller local banks often serve several generations of families. These long-standing relationships help to cultivate deep bonds of trust between community bankers and their customers.


• Positive local economic impact: Community banks lend locally, where their customers live and work, and this helps keep local communities vibrant and growing. Additionally, they channel most of their loans to the neighborhoods where their depositors live. This is another important catalyst for keeping local communities healthy. "A community bank is a microcosm of the health of the community it's doing business in," says one local bank vice-president. "If the community bank is struggling, the community is also struggling."


• Tax revenue: Because community banks pay federal, state and local taxes, they are an important supporter of their community's local infrastructure, according to the ICBA.


• Relationships and expertise: Because community bankers live and work in the same localities as their customers, they understand their local marketplace and the ups and downs of economic cycles in their community. Bankers at smaller banks are also more likely to consider good character and family history when making decisions versus making judgments just by looking at numbers on a computer spreadsheet or credit report. At a smaller, local bank, loyalty is highly valued.


• Cost savings: According to the ICBA, research has shown that average fees for checking accounts and other depository services are lower at community banks than large, multi-state institutions.


• Community involvement: Community banks are often among the first businesses in a community to sponsor a softball team, donate time and money to local charities and causes or to meet other needs as they arise. Bankers at smaller banks are typically committed to helping their neighbors, in turn making their local communities a better place to live.

The next time you're planning to open a new savings or checking account or need a mortgage, car loan or home-equity loan, consider utilizing a smaller, local bank.