It’s no secret that in an era of bank mergers, a growing number of us are being served by a few large banks with names we all recognize – staffed by people who may not recognize us when we walk into a branch. Fewer people have a relationship with a banker who knows them on a first-name basis. Gone are the days when a person’s banking relationship was with an institution based in their community where the bankers knew their name and cared about the growth of their local area.
Or are they?
Here’s why it’s easy to get the impression that community banks – typically defined as locally owned and/or operated with less than $1 billion in assets – are a dying breed: Between 1984 and 2011 the share of U.S. banking assets held by community banks shrank by more than half, from 38 percent to 14 percent, according to the Federal Deposit Insurance Corporation (FDIC) (PDF). Community banks had only around a third of America’s banking offices at the end of 2010. Furthermore, these institutions were on the “front line” the Great Recession of 2007-2009, as then-Federal Reserve Chairman Ben Bernanke said, and hard-hit as a result.
So it may surprise you to know that despite all that, community banks still made up 95 percent of U.S. banking institutions in 2011. Given that they aren’t going away anytime soon, it’s worth considering whether, just as you might “shop local,” “banking local” could be a good option for you — and your community.