A recent report from the FDIC revealed that community banks throughout the U.S. are facing increasing competition.
The report said that in 1987, community banks controlled 38 percent of all bank branches in the 21 fastest-growing metro areas, though that number had shrunk to just 20 percent by 2011. The remaining 80 percent of financial institutions are run by “non-community banks,” according to Triangle Business Journal.
Community banks are institutions with less than $1 billion in assets that do business in no more than three states and two large metro areas. By 2011, of nearly 7,000 banks reporting to the regulator, 94 percent were community banks, while only 390 institutions were listed in the “non-community” class, including specialty banks and megabanks like Bank of America.
The report also said that “non-community banks,” though fewer, controlled 90 percent of deposits in the 21 fastest-growing metro areas in 2011, Triangle Business Journal reports.
Additionally, the report indicated that while community banks tend to center in non-metro areas, their location may come at an expense. Non-metro areas accounted for only 16 percent of the U.S. population in 2011 and just above 12 percent of economic output, though they experienced slower population growth and economic output during the study period.