Like everything else, banking is changing and evolving to meet the changing needs and demands of the times. There is no doubt about that. But anyone predicting the demise of the bank branch is premature, at best ...at least in our opinion.
Brand new 3½-Star Rockpoint Bank N.A., Chattanooga, TN seems to share in that belief. In fact, its goal is to build relationships based on personalized service, supported by technology. While it is possible to have personalized service without a branch, there is no person-to-person interaction, which many people still crave... maybe even more so now, after a year of living in isolation.
Chattanooga didn’t necessarily need a new bank; 17 other banks operate 70 branches throughout the city. However, after years (decades even) of consolidation, only a handful (literally five) are community banks. And only one of those, 5-Star First Volunteer Bank, is headquartered in Chattanooga. Rockpoint Bank seeks to fill that void in this city of 180,000 residents.
Like-minded 3½-Star Riverside Bank of Dublin, OH is hoping to do the same thing in this much smaller city of about 40,000. In this case, 15 other banks operate through 29 branch offices and while four are community banks, not one is headquartered in this Historic, Celtic town. Riverside originally had set its sites on a 2020 grand opening but, due to COVID, that opening was pushed back . It is open now with “a fresh new approach to banking.”
It isn’t just these new banks, though. According to the FDIC website: as of July 8th, 318 U.S. banks have opened 561 new branches this year. While the vast majority (259 or 81%) opened just a single location, 59 opened (or acquired) two or more. We had to do a little digging to determine which were brand new and which had been acquired.
As a result, we learned that 145 5-Star community banks opened new branches in the first half of 2021: 75 in the first quarter and 70 in the second. (You can find the 70 from Q2 on pages 2 and 7.) These banks clearly feel there is still a need, and want, for bank branches in their communities.
Let’s take a look at one example:
Established in 1904, 5-Star D.L. Evans Bank, Burley, ID is still operated by the same family that founded it. And while the bank has expanded, its principles have never veered: integrity, charity, friendliness, compassion and hard-work. It remains a family-owned community bank, helping its neighbors and building lasting relationships. Helping the communities it serves to grow and prosper has helped the bank to do the same. It now boasts more than $2.5 billion in assets and with its latest addition (Bellevue, Idaho) it operates 38 branch offices in Idaho and Utah.
We only need one example here because ALL community banks have two things in common:
- They give back to the community(s). (Employees volunteer for fundraisers and nonprofit organizations. These banks sponsor events and award scholarships.)
- Community banks lend money locally so deposits stay working in the same community.
These particular community banks are also exhibiting confidence in the future and in the future of branch banking. We applaud them.