BANKING WITH PURPOSE: Why You Should Bank Locally

BANKING WITH PURPOSE:  Why You Should Bank Locally

By:  Tom Greinke, President
 
When it comes to banking, it’s important to feel confident that you are getting the most out of where you keep your money. It’s common to believe that the best banking benefits are only offered at large, national institutions. However, chances are, you’ll find everything you need at your local bank and be able to support your local community at the same time!

Local banks are inextricably intertwined with their local economy. Local banks don’t divert assets or other funding resources away from struggling economies and into those areas they deem less risky. Local banks (also known as community banks), are vested in the success of the areas they serve which includes supporting the individuals and small businesses who live and operate therein. Many local bank clients don’t fit inside the proverbial product or service “box.” These clients require their bank to be thoughtful, creative and, most importantly, committed to the relationship over time.

Jerome Powell, current chair of the Federal Reserve, had this to say while serving as a Fed Board Governor, “as auto, mortgage, and credit card loans have become increasingly standardized, community banks have had to focus to a greater extent on small business and commercial real estate lending – products where community banks’ advantages in forming relationships with local borrowers are still important.” Is there a time when relationships will become less important? From a local banker’s perspective, relationships will always matter.

From a numbers perspective, small and mid-sized banks and credit unions represent 52% of small business lending despite holding a much smaller percentage of total banking assets in the US. With the roll-out of the Paycheck Protection Program at the onset of the COVID pandemic, community banks – who control only 14% of the banking system assets in our country – processed 45% of the loans. Community banks provided stability for clients when it was needed the most, and kept them in business.

A notable George Mason University study found that community banks have enhanced local knowledge, allowing them to better understand borrowers, assess risk and ultimately make loans. Which, in turn, stimulates the local economies in which these loans are made.

In addition to quality relationships and financial resources, local banks are able to offer technology that easily rivals that of national organizations. For example, technology for mobile apps has become ubiquitous. Local bank clients are able to view account balances, monitor transactions, and even deposit checks via their mobile app. In addition, local banks are often part of a partner ATM network, where clients can make surcharge-free ATM withdrawals at thousands of different locations throughout the country.

If the above reasons weren’t enough, local banks are also actively involved in charitable giving within the community – whether that be financial support, employee time, or in many cases, both. They often support local non-profit organizations with their time and effort which serves to further strengthen the community in many ways. At community banks, it comes down to service. Service to clients and communities.

Bank with a purpose. Support your local community. Experience what it feels like when a local bank commits to you and your financial goals and dreams. You won’t be disappointed. If you want to explore banking locally in Lexington, come see us at Bank of the Bluegrass. We’d be happy to show you just how much more beneficial banking with our team of local professionals can be, and why our customers say we’re the best business bank in town!