Reader letter

The month of April marks the celebration of Community Banking Month. I’d like to take this opportunity to educate on what sets community banks apart—there is a marked difference between a “Main Street bank”’ and a “Wall Street bank.”

  • Local focus: Unlike larger banks that may take deposits in one state and lend in others, community banks channel their loans to the neighborhoods where their depositors live and work, which helps local businesses and communities thrive. Community banks are an integral part of Main Street, reinvesting local dollars back into the community and helping to create local jobs.
  • Relationship banking: Community bank officers know their customers and may consider family history and discretionary spending in making loans. Their relationship banking philosophy is ingrained in the way they conduct business, one loan—one customer—at a time. Megabank loan officers apply impersonal qualification criteria, such as credit scoring, without regard to individual circumstances.
  • Lending leadership to small business: According to the Federal Reserve’s Small Business Credit Survey: Report on Employer Firms, community banks are the small business lender of choice.
  • According to the Small Business Administration, community banks approved about 60 percent of first-round PPP loans. Nationally, banks under $1 billion – a group that represents just 6 percent of all banking assets – provided their communities with nearly 20 percent of first-round PPP loan dollars.
  • Timely decision-making: Community banks offer nimble decision-making on business loans because decisions are made locally. Megabanks must often convene loan-approval committees located in another state, far away from their customers.
  • Community engagement and accessibility: Community bank officers are typically deeply involved in their local communities.
  • Pillar of the economy: Community banks comprise 99% of all banks, provide more than 60% of all small business loans and make more than 80% of agricultural loans.

As local small businesses themselves, community banks only thrive when their customers and communities flourish. They answer to their local community.

I encourage you to bank with a community bank, where you truly matter.

Allen Liestman

President/CEO of Center National Bank, Litchfield