Looking For a Bank Consider a Community Bank

                                                        

A community bank is a bank that is locally owned and operated in a specific state or region. A community bank does not have nationwide locations. It is different from a credit union since credit unions are not-for-profit organizations that are owned by members, serve their members and are managed by a Board of Directors who are elected by the members.

There are more community banks than national or traditional banks. There are over 6,100 community banks and 5,441 traditional banks. Community banks consumer deposits are insured up to $250,000 per person. Community banks provide services that are competitive with traditional banks.

Community banks place emphasis on traditional banking services in a specific market area and prioritize long-term customer relationships.

According to the FDIC study, community banks consistently reported lower average loss rates in residential real estate loans and loans to individuals from 1991 through 2011, partly due to their emphasis on relationship banking, especially during economic downturns.

Community banks focus attention on the needs of local families, businesses and farmers, focusing most of their loans to the neighborhoods where their customers live and work. This helps keep local communities flourishing. Community banks also are willing to consider character, family history and discretionary spending when making loans, while big banks mainly focus on credit score without regard to individual circumstances, which makes it harder for small businesses to be approved for a traditional bank loan.

Individual investments are managed by the same advisor and more efficiently than larger banks which typically outsourcing investing and investments may be handled by multiple advisors due to turnover or promotions.  You can find your local community bank using this link  http://www.icba.org/consumer/BankLocator.cfm?ItemNumber=51757&navItemNumber=187352. Here are the pros and cons of using a community bank.

Better rates and fees

Pros

• May waive fees for out-of-network ATMs
• Same services at a lower cost – lower fees, higher savings rates
• More focus on local community development
• No fees for using branch tellers, staff assistance or personalized care
• Easier to negotiate fees

Cons

• They may charge more to have an account, but may charge less for fees

Customer Service

Pros

• Better customer service
• Quicker response times and decision-making
• Owner operated
• Consider character, family history, bank history when making loans not just credit score
• Your money helps to grow local economy
• Focus on customers not on income or profit sharing
• Less staff turnover

Cons

• Standard banking hours
• May not be able to make deposits after bank hours end

Flexibility with lending

Pros

• Make exceptions for customers based on circumstances and needs
• Lower rate of defaults due to building relationships with customers
• More flexibility and less restrictions on small business loans
• More services available for small business owners

Cons

• May have less cash reserves to make large business loans
• May focus more on mortgage and small personal loans
• Range of retirement accounts may be limited

Management Team

Pros

• Management team is accessible to customers
• Involved in local community