4,844. That’s the number of Federally insured banks in our country. The U.S. has more banks than anywhere on earth; that number is fed by local and regional banking. Small banks have always been a large part of our economy.
Back in March we saw a bank run that caused the collapse of Silicon Valley Bank, the second largest bank failure in U.S. history. Understandably, this brought a lot of fear to anyone banking with a small bank, with the assumption that their bank could fall too. In a short time big banks across the country saw huge deposits as people transferred their money, supposing that these big guys were too big to fail.
What a lot of people may not realize is the major fears that some have are unwarranted. If you have less than $250,00 in the bank your money is covered by FDIC insurance.
Regional and community banks are vital to the U.S. economy. Community banks provide 77% of agricultural loans and over half of the small business loans in our country. Small banks are able to lend to a wider range of people than the big banks. When you bank with a community or regional bank you are supporting a local small business, which means you are supporting your local economy. When you give your money to a big bank, that money goes to support big businesses that may not even know your city or town exists. Small banks are able to tailor their business to the needs of the community. They are also more aware of the needs and the risks within their area, far more than a big bank ever will be. Small banks can perform and provide for their community in ways that big banks simply can’t.
Usually, a local bank is less costly and has lower employee turnover. They may also offer fewer or lower fees and offer more competitive rates. Not only do they offer products and services that are more geared towards your community, but small banks tend to be more interested in meeting the needs of their customers. They recognize that they depend on their customers just as much as their customers rely on them. With a small bank, it’s likely you will work with the same tellers, the same loan officers, and build relationships with the individuals that work at your bank, and they will get to know you.
Wouldn’t you wanna go where everybody knows your name?
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