Money Moves: The Case for Banking Locally

Three ways that moving your deposit accounts to your local bank puts your money to work

When you deposit your money into Bank of St. Francisville it allows us to re-invest that money locally by funding home mortgages, business and personal loans; and by supporting philanthropic and community-building endeavors. When you make the switch to banking locally, you not only get the peace of mind of knowing where your money is, you’re also putting it to work building a stronger, more sustainable local economy, too.

Community Bank vs. Big Bank: Does Size Matter?

The main difference between a community bank and a “big” bank lies in the amount of financial assets the bank owns. According to a 2012 report by Jim Blasingame published in Forbes magazine, there were 7,092 banks in the United States insured by the FDIC. Of those, 6,201 (87%) were community banks with average assets of around $200 million. By comparison, two of the largest banks—Wells Fargo and Citigroup—were each the size of all those 6,201 community banks, combined.

But when it comes to fueling the engine of small business growth in America, community banks punch way above their weight. According to the Independent Community Bankers of America (ICBA), while community banks hold only about 20% of total deposits, they make almost 60% of all small business loans. Since small businesses account for more than half the U.S. economy, you’d better believe that supporting your community bank matters.  

Deposit Funds: Fuel for Community Growth

To be an effective growth engine, a community bank requires the funds to make loans. Retail deposit accounts like checking, savings, and money market accounts, as well as certificates of deposit (CDs), are the cornerstone assets that community banks use to maintain healthy liquidity while continuing to make new loans. The good news is when you move your deposit account to your local bank, you’re helping your community grow. Here are three ways that banking local pays off in the long run.  

1. Local Banking: Rooted in Relationship

Community banks grow their business by building personal relationships with clients, whether they be business or personal banking customers. This means that:  

  • they tend to be locally owned and managed,
  • loan decisions are usually made in consultation with a local loan committee, rather than by using a computer algorithm, and
  • when deciding whether to loan to a local business, nonprofit organization, or entrepreneur, a community bank is likely to consider issues like a business owner’s character, in addition to the wellbeing of the community.  

There’s the element of having an interpersonal relationship, too. “I think the biggest difference here is that we treat everybody the same,” says BSF Relationship Banker Denise George. “Everybody wants to feel important, and we go out of our way to make sure that all of our customers feel special, because we care. I personally like taking care of our older customers—going to their house to pick up their deposit if they aren’t able to drive, picking up their mail for them and helping them go through their bills. That’s not going to happen at a big bank."  

2. Same Products and Services (with Better Customer Service)

Today’s community banks generally offer most of the same financial products and services as larger banks. The difference is in the customer service.

In 2016, the American Customer Satisfaction Index Finance and Insurance report found that community banks scored higher when it came to customer satisfaction (83%), than their behemoth counterparts (77%). At Bank of St. Francisville, it shows.

“I go out of my way to make sure my customers can reach me at work and at my cell phone,” Denise observes, “and that makes a big difference—especially when you're out of town and your debit card isn’t working, and you can pick up a phone and know you’re getting a person instead of a computer."

Compared to larger banks, many community banks go out of their way to remove impediments facing local business, making fee structures simpler, for example, or helping business owners to plan and budget, or offering financial expertise to help navigate important business decisions.  

3. Local Decision-Making and Community Reinvestment

A bank isn’t just a place to park your money. You want it to function as a partner—one with a vested interest in the continued success of the community you both call home. The fortunes of local banks are tied to the prosperity of the communities they serve. Large banks, with hundreds or thousands of branch locations, are less likely to depend on the success of the individual places where they operate. At a local financial institution, where loan approvals and other key decisions are made by local people with face-to-face relationships with their customers, lenders often make loans that larger financial institutions might not when based on the numbers alone.

“We’ve made loans that people thought we were crazy to do,” says BSF Founder and Chairman Emeritus, Carter Leak III. “On paper they might not have made sense. But if the community needed it, we went out of our way to support it. A bigger bank might not have been interested in that kind of commitment to community, but ultimately, doing what’s good for the community plays a big part in our decision making.”

It’s your move … Ready to be a community-building hero? Switching a deposit account to your community bank isn’t difficult, and getting help is as easy as picking up the phone, or just walking in. “When you come in and sit down with me, I can walk you through the entire account-opening process,” Denise says. “I’ll guide you every step of the way, so you’re not getting shuffled around to different people and departments."  

Ready to open a deposit account or move an existing account to Bank of St. Francisville? Download our Deposit Account Application form HERE. Or to learn more or get help, call Denise George at 225-784-3269 or click here to schedule an appointment.

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