Strategies for Success: A Community Banking Roundup

Insights from American Banker’s Highest Performing Banks Report and Independent Banker’s Community Bank Service Awards

The latest data from American Banker’s annual list of Top Banks finds the community banking sector performing well-above expectations despite significant challenges brought on by the pandemic. “The annual analysis of the factors that contributed to top performance, conducted by Capital Performance Group and American Banker Magazine, show that the strategies which contributed to top performance last year will remain essential for sustaining that level of performance in today’s economic environment,” according to Performance Group’s Claude Hanley in American Banker’s BankThink article on community banking’s rankings.

Those strategies include robust efforts by community banks to expand their suite of services and reach new areas and new audiences, most especially in the lending space. Further, while many of the most profitable banks operated fewer overall branches than their peers, they prioritized efficiency by successfully leveraging digital channels and third-party relationships to expand their reach. “This contributed to a lower level of operating costs,” finds Hanley in BankThink. “And, coupled with higher revenue growth, enabled the top-performing institutions to report efficiency ratios that were significantly lower than peers.”

Photo courtesy First Community Bank in Independent Banker, September 1, 2022

Building affinity through community giveback is also one of meaningful ways community banks sustain their success. ICBA’s 2022 National Community Bank Service Awards finds charitable work and community involvement are pathways to build deeper relationships. “It’s no secret that community banks have built plenty of social capital, but they’re not in it for the PR,” says ICBA. “What sets their approach apart is their tailored giving to local needs, just as they provide banking services tailored to their customers.” The rankings outline efforts at environmental sustainability, serving the underbanked and committing to diversity as key differentiators.

For more information on building community banking success, stay tuned to Believe in Banking’s continuing coverage of the industry’s top trends and topics. For insights on best practices in financial services, including strategies built on community commitment, contact the banking and credit union experts at Adrenaline via email at info@adrenalineagency.com.