The FDIC released its community banking survey and a number of community bank-related rule-making measures on Tuesday as the result of its yearlong Community Banking Initiative.
Announced by the FDIC in fall 2011, the initiative was designed to further understanding of the development of community banks through research and analysis. The initiative was launched in February, and the FDIC met with community bankers across the country at roundtable meetings thereafter.
“Today’s release is an important step to better understand and respond to the challenges community banks face in the financial marketplace,” Martin Gruenberg, the chairman of the FDIC, said. “This will be an ongoing effort. We will continue to look for other opportunities to enhance our research and analysis as well as identify other steps to improve the examination and rulemaking process for community banks, while maintaining our supervisory standards.”
The community bank survey found consolidation to be a multi-decade trend. Between 1984 and 2011, the number of banks with less than $25 million in assets fell by 96 percent, while the largest banks with assets greater than $10 billion grew elevenfold over the same time period.
As of 2011, community banks held 14 percent of all banking assets but provided 46 percent of the industry’s small loans to American farms and businesses. Additionally, community banks hold the majority of banking deposits across the rural U.S. Approximately one out of every five counties in the U.S. has offices operated solely by community banks.