ICBA: Fifty-five percent of community bank survey participants saw an increase in deposits MortgagePress.comIndependent Community Bankers of America, Aite Group LLC, survey, community banks
The Independent Community Bankers of America (ICBA) and Aite
Group LLC, have released a report entitled, "The Impact of the
Financial Crisis on U.S. Community Banks: New Opportunities in
Difficult Times." The report, which is based on information
gathered through a February 2009 survey of 743 community bank
respondents, examines the impact of the current financial crisis on
community banks.
"While the financial crisis has affected banks of all sizes and
in all regions, community banks continue to lend and are typically
faring much better than the larger banks because they didnt
participate in the high-risk activities that led to problems we are
experiencing," said ICBA President and CEO Camden R. Fine. "This
survey clearly shows that the vast majority of community banks are
well-positioned to survive the economic downturn and, perhaps, even
reclaim some of the customers from larger banks."
Survey highlights include:
• Of the community banks surveyed, 55 percent have seen an
increase in deposits as a result of new customer acquisition. Only
17 percent have had customers withdraw deposits from their
institutions.
• Community banks are acquiring new customers at a faster
rate than in the past. Of the community banks surveyed, 57 percent
saw an increase in new retail customers during the third and fourth
quarters of 2008 compared to the first half of the year, while 47
percent saw an increase in new business customers.
• Community banks are still lending, and 40 percent have
seen an increase in loan origination volume over the last year.
Only 11 percent believe the crisis has "significantly" curtailed
their institution's ability to lend. Economic compression and mixed
messages from the U.S. government are key factors driving down loan
activity.
• Despite most community banks' lack of participation in
subprime lending, the implications of larger bank activities have
begun to trickle down. Of community banks surveyed, 73 percent have
seen an increase in their traditionally low loan delinquencies and
charge-offs since the start of the crisis. The significant growth
in quarterly net charge-offs for the industry is driven primarily
by the largest banks.
"By striving to serve their customer's best interests without
straying from traditional practices, most community banks have been
able to grow deposits, acquire new customers, better position
themselves in the eyes of customers and maintain stable financial
statements," says Christine Barry, research director with Aite
Group and author of this report. "Some community banks feel they
are seeing more opportunities today than they have in the past
several decades. But in order to remain competitive with larger
banks, community banks must continue to strengthen their operations
and better leverage technology throughout the crisis."
For more information, visit www.icba.org.
