PRESIDENT’S MESSAGE Jack Hopkins Community Bank of Raymore “We like to think by emphasizing personal relationships, we provide better service to our clients. This has been the cornerstone of community banking.” What is a community bank? We can all agree that there is no clear-cut definition for “community bank.” How would you answer this question? Investopedia says: “A community bank is a depository or lending institution that primarily serves businesses and individuals in a small geographic area. Community banks tend to emphasize personal relationships with their customers. These smaller banks typically do not have the product range or branch networks available at larger institutions and often provide loans to local businesses and individuals who may not qualify based on the more standardized criteria used by big banks.” While I do not totally agree with the Investopedia definition, it is somewhat accurate. It also identifies a few of our strengths and weaknesses. Who moved the cheese? We like to think by emphasizing personal relationships, we provide better service to our clients. This has been the cornerstone of community banking. We also differentiate ourselves by channeling most of our loans to the neighborhoods where our depositors live and work. We help our communities stay strong and vibrant. In contrast, many larger banks pull deposits from local communities and make loans in other states. These are all reasons to be proud to be community bankers. However, it does not explain why the number of community banks has fallen from 14,323 in 1988 to 4,979 in 2018, according to the SBA. It also does not explain why our deposit market share has dropped during the same time. We all know there are several reasons for the decline in the number of community banks and our declining deposit market share. Changing demographics is one major variable. While baby boomers like me and the greatest generation highly value personal service, younger generations are looking for something different. My children, who are millennials, have no desire to come into the bank to open an account or borrow money. They want to do business when it is convenient for them and do it on their phone or iPad. They do not value personal relationships like previous generations. They define great service in a different way than we do. If you attended ICBA Live in San Antonio, you heard Mike Walsh talk about the new rules for a new world at the opening general session. He clearly stated we need to be flexible enough to provide service to our clients in the way they desire or someone else will. As community bankers, we can sometimes be a one-trick pony. We have relied on Continued on page 4 Community Banking and Financial Education 2 | The Show-Me Banker Magazine
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