Who can forget the great bailout of banker George Bailey in the classic It's a Wonderful Life? Bruce Rosenblat, chief marketing officer of Main Street Bank, writes on the hyper-local focus of the region's community banks and why these pillars are not pulling up stakes here.
Post 1: How Do I Change My Banking Address?
Posted By: Bruce Rosenblat
Posted: 7/21/2011
It was a usual busy day at Bingham Farms-based Main Street Community Bank where I work. As I walked through our lobby area I heard a client ask one of our customer service representatives "What do I have to do to change the address on my account?" Without missing a beat, she replied, "You have to move."
I love working in the metro Detroit community banking industry. We are real people, invested in our client's lives. We know their business, because they want to share it with us and we care. They may invest with us, but in return we invest in them. Believe it or not community banks are one of the most important businesses in our economy. While many may see the image of a small-town bank as something out of It's a Wonderful Life, we are much more than that.
While banking regulators tend to see "community banks" as banking institutions with less than $1 billion in assets, they make up a substantial segment of the market and bring to the masses much more than asset size. Take for instance these facts from an FDIC report from 3/31/11:
- There are more than 7,000 community banks, including commercial banks, thrifts, stock and mutual savings institutions, with more than 50,000 locations throughout the United States and they constitute 98 percent of all banks. In fact, of all U.S. banks, 91 percent have assets under $1 billion and 34 percent have assets under $100 million.
- Community banks are the primary source of lending for small businesses. Even though they compose just 21 percent of the banking industry by assets, community banks with less than $10 billion in assets made 58 percent of outstanding bank loans to small businesses.
Community banks aren't just small. They're local. Your dollar in a small bank will likely help to finance a local home or business right here in metropolitan Detroit, while that same dollar in a national conglomerate generally will fund loans across the country. Community banks tend to obtain deposits from local individuals and businesses and lend them out to local borrowers.
Most community bank loans benefit the neighborhoods where depositors live and work. Additionally, community banks' boards of directors are made up of local citizens who want to advance the interests of the towns and cities where they live and where their banks do business.
Community banks specialize in "relationship banking," as opposed to "transactional banking," which large banks master through volume transactions. A community bank's approach drives profit through long-term, multiple-account relationships and superior service for their customers. Multi-state institutions make money on volume, usually from a large numbers of accounts, numerous locations, and automated service.
Research has shown that average fees for checking accounts and other depository services are lower at community banks than at large, multi-state institutions while still offering a wide range of banking services and products designed to meet the needs of consumers and business usually including:
- Anytime, anywhere electronic banking,
- Credit and or debit cards with competitive rates and features,
- Competitive mortgage and consumer-loan products
- Competitive checking, saving and investment products and rates
- Safe deposit boxes
While the total number of banks in the United States has been decreasing due to consolidation, especially here, locally new community banks continue to be chartered. Despite the financial crisis, 11 new community banks were chartered in 2010.
We are helping to rebuild communities right here in metropolitan Detroit. We're banking on our clients and their neighborhoods. Is your multi-state banking conglomerate equally committed?