Community banking may be under fire, but it won't die as long as those banks stick to core fundamentals and adjust their business model for a new generation, midstate banking officials said.
As banks face stiffer challenges from increased regulation and financial pressures, it's important to keep their identities intact as they grow with their customers.
"I believe it's critical they remember they are community banks and stick to that model," said
The identity of a community bank is crucial, according to
Sticking to that model of being a willing and able investor in the area they serve will be what helps community banks survive.
"Five years ago, you didn't even know what a community bank was," she said. "A bank was a bank was a bank. Now, people are interested in knowing which banks are based in the communities they serve."
The common definition of a community bank is one with less than
That's down from almost 17,500 in 1985, according to
"(Community banks are) different," said
But those same regulators are the ones putting forth standards that are "killing us," DiFrancesco said.
He said community banks are hiring, but the jobs mostly are compliance officers for federal standards handed down in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
"(The hires) are not creating new business, they're there to cross the T's and dot the I's," he said. "That increases the cost of doing business for community banks."
DiFrancesco specifically pointed to the new qualified mortgage regulations that went into effect
"The qualified mortgage rules are deadly," he said. "It's going to force banks to pull back from issuing mortgages. If (the government) would just back offcommunity banks and let us do our thing, it would create a better economic environment."
One common perception of community banks - that they are the banks of choice for small businesses - is starting to come under fire. According to a
Community banks are breaking their own reputations as well in a good way since they're often accused of not being technologically advanced. Jorde cited an ICBA survey released in November that said 37 percent of the country's community banks offer mobile banking and another 43 percent intend to offer it by 2015.
Allen said there are vendors now that offer community banks online banking capabilities at reasonable prices to cut down on the expense that would keep a smaller bank from investing in new technologies.
"We certainly don't expect (community banking) to go away," said
"Five years ago, you didn't even know what a community bank was. A bank was a bank was a bank. Now, people are interested in knowing which banks are based in the communities they serve."
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