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What Sets Community Banks Apart

April 8, 2019 | Independent Community Bankers of America

Local Focus: Unlike larger banks that may take deposits in one state and lend in others, community banks channel their loans to the neighborhoods where their depositors live and work, which helps local businesses and communities thrive.

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.

Community bankers also work hand in hand with customers to ensure they have access to the best innovations possible to meet their needs—such as the most secure, reliable and convenient payment options.

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.

  • 73 percent of independent businesses that used community banks report they were satisfied with their overall experience, compared with 49 percent for large banks and just 35 percent for online lenders.
  • Independent businesses that apply for loans with community banks are the most successful and the most satisfied.

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.

Community Bank vs. Mega Bank