Opinion: Why community banks will matter more in 2016

Consultants are great at gauging what’s important to a community. Not because it’s any part of their job, but because they travel so often and see so many different places. Our bank recently brought one in, and between his drive from the airport to Springfield’s south side, he noticed something about southwest Missouri.

“You guys sure have a lot of banks,” he said with a smile and a rather thick Texas accent.

Yes, we do. There’s one on nearly every corner, tucked away in strip centers and lighting up downtown squares. With some 20 bank headquarters in our area, there’s a good chance one of their local branches is almost always nearby.

The number of community banks across the country has dropped by more than half in the last 25 years, but that doesn’t make community banks any less vital to the overall health of our community. In fact, they might be more vital to businesses and consumers in the coming year than ever.

A Federal Deposit Insurance Corp. report says community banks provide about 45 percent of the banking industry’s loans to farms and small businesses despite holding just 14 percent of the industry’s overall assets. If small businesses are America’s backbone, then community banks are its heart, providing the capital and credit to help these ventures succeed.

In the pages of the Springfield Business Journal this year you’ll read more about our burgeoning startup community. While risky, these small businesses are frequently finding success, growing and thriving with local support. These startups seek capital from community banks, both conventionally and through Small Business Administration loans, and in newer ways like crowdfunding and “Shark Tank” type investors.

Armed with a business plan and some passion, business owners are finding community banks are a vital part in making their dreams come true. It’s the personal touch, something community banks do perhaps better than anyone else. Sure the banking industry is going digital, but at a community bank the person deciding on your loan is often the person beside you at football games on Friday and church on Sunday. Banking has always been about making connections with people, about forging relationships that often last a lifetime.

While community banks typically aren’t at the forefront of industry innovation, they are often early adopters. The next year will see more digital-only banks and new technologies in areas like person-to-person lending and financial management.

In 2015, we saw mergers, acquisitions, renaming efforts and rebranding campaigns across the local banking landscape. If it taught us anything, it’s that change is inevitable. While it’s easy to speculate the industry is headed toward a handful of megabanks, community banks will continue to prosper. The personal attention customers receive is just something that can’t be digitized.

Jeremy Tennison  is a senior vice president and commercial relationship manager with Guaranty Bank. He can be reached at jtennison@gbankmo.com.