Technological developments in information production and dissemination, changes in the management strategies of larger banks and other institutions, deregulation, and changes in the delivery of financial services have reduced some of the advantages that community banks could once offer their customers. As a result, community banks have lost market share to larger banks and to nondepository institutions.
At the same time, a large portion of small businesses and households continue to value and avail themselves of the relationship lending, personal service, and local proximity that community banks offer their customers. Community banks today are generally healthy and profitable, and new ones are being chartered every year.