Why You Should Bank Locally

Community Banks: The Heart of Every Town

Community banks are woven into the fabric of every town, from big cities like New York to the smallest rural communities. Sometimes they exist as architectural ghosts — grand buildings with hyper-local names like The Bowery Savings Bank in NYC. These landmarks invite us to imagine a time when banking locally wasn’t just an annual trend but a way of life.

People shopped locally, banked locally, and socialized locally. Community banks opened to serve local residents and businesses, providing essential financial services that couldn’t be found anywhere else.

Today, there are more banking options than ever, but local financial institutions remain crucial to the success and vibrancy of the communities they serve. If you’re not already a “bank local” devotee, keep reading!

The Rise of Megabanks

The megabank model began in 1998 when Citicorp and Travelers Group merged to create the world’s largest financial services company. Chase Manhattan followed by acquiring J.P. Morgan in 2000. Over time, larger financial institutions absorbed smaller banks, leading to the dominance of four megabanks by 2009: Citigroup, JPMorgan Chase, Bank of America, and Wells Fargo.

These banks leveraged their size to profit from mortgages and rising home prices. However, the 2008 financial crisis exposed issues in how megabanks were run. Since then, scandals have continued, including fake accounts, unnecessary fees, and unauthorized mortgage modifications.

Why Bigger Isn’t Always Better

Large banks face stricter regulations and scrutiny. Many still pay billions in fines, and some, like Citigroup, are dismantling operations to adapt. Public perception remains low due to constant scandals, high fees, and limited accountability.

Choosing a trustworthy local bank ensures your money goes to an institution accountable to the community.

How Consumers Benefit From Banking Locally

Local banks often provide more value than larger banks. Here’s how:

1. Lower Fees

Local banks offer more free accounts and fewer fees. According to Money-Rates.com, 43% of small banks’ checking accounts had no monthly fees, compared to only 25% at large banks. Megabanks also generate billions from overdraft fees each year.

2. Personalized Attention

Customers are treated as individuals, often greeted by name and asked about their families. Community banks pride themselves on personal service.

3. Full Range of Services

Contrary to megabank advertising, most community banks provide the same services, including online and mobile banking, plus unique local programs.

4. Higher Quality Service

Lower employee turnover allows staff to form stronger relationships, delivering better service and flexible solutions.

5. Higher Ethical Standards

Community banks are deeply invested in local businesses and maintain higher ethical standards than national chains.

6. Local Decision Making

Smaller banks evaluate personal qualifications and character when granting loans, rather than relying solely on credit scores.

7. Stability

First State Bank has been locally owned since 1935. Community banks are deeply rooted and plan to remain part of their neighborhoods.

How Businesses Benefit From Banking Locally

Local banks understand small business needs because they are small businesses themselves. Key advantages include:

• Local Decision Making: Loans are approved based on local market insight.
• Relationship-Based Banking: Community banks know you and your business personally.
• Faster Decisions: In-house approval processes reduce delays.
• Local Connections: Banks help you connect with suppliers, clients, and service providers.
• Collaborative Lending: Community banks join forces to fund more loans and serve their communities better.

Local Economies Thrive With Local Banking

Community banks provide nearly 50% of small business loans nationally, and up to 82% of agricultural loans in rural areas. Your money stays local, funding salaries, investments, and capital improvements.

Banking locally ensures your community’s economy grows, supporting neighbors and local businesses. Community bank profits also go back into the community through charitable donations and youth programs.

Speak Up For Local Banks

Share your positive experiences with First State Bank! Longtime customers and newcomers alike can contact us to share why they bank locally.

Learn more about the History of First State Bank.