While community banks face considerable challenges, in general they have emerged from the last decade as strong competitors: On average, they have grown somewhat larger and have expanded their geographic footprints. In other words, we have a more resilient, stronger community banking sector, but one with fewer locally headquartered banks. With that in mind, let’s look at what leads me to these conclusions.
As seen in figure 1, it is true that there are now many fewer small community banks—those with less than $ million in assets—than there were in 2011. 2 At the same time, the numbers of both large community banks and banks over $ billion in assets (noncommunity banks) haven’t changed much. What do we find when we dig a little deeper?