Main Street Wednesday – The Case for the Community Bank
September 17, 2014
By Bob Coleman
Editor, Coleman Report
I 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.”