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Main Street Wednesday – The Case for the Community Bank

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September 17, 2014

By Bob Coleman
Editor, Coleman Report

fdicI love dissecting the numbers and here are some to contemplate as an FDIC official testified before Congress yesterday.

· Community banks account for 14% of banking assets

· Community banks account for 45% of small loans to Main Street and Rural America

· 600 of the 3,142 US counties would not have a brick and mortar bank if not for the community bank operating there

· Community bank loan balances grew 7.6% in the year ending June 2014. This outpaced a 4.9% growth rate for the industry as a whole

I conclude with this paragraph by the FDIC.

“The Study also showed that the core business model of community banks – defined around well-structured relationship lending, funded by stable core deposits, and focused on the local geographic community that the bank knows well – actually performed comparatively well during the recent banking crisis. Amid the 500 some banks that have failed since 2007, the highest rates of failure were observed among non-community banks and among community banks that departed from the traditional model and tried to grow faster with risky assets often funded by volatile brokered deposits.”

Read the entire speech here.

 

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