Good News For You: Community Banks Depend On Lending

Oshkosh Convention Center

Community businesses are where our roots are planted; they are our stronghold.

The six largest banks in the United States control 72% – about $9.4 trillion – of our country’s business and personal assets. If you’re in the process of choosing a bank – maybe you’re unhappy with your current financial institution or new to the area – this statistic alone might seem to be reason enough to choose one of those big banks. If so many people are putting their money in them it’s got to be a good idea for you, too, right?

Well, not necessarily.

When people ask us why they should bank with FNB Fox Valley, we point to a number of benefits, one of which always seems to surprise them: our business model. How community banks like FNB Fox Valley succeed is different from how large national banks do.

Community banks rely far more heavily than large banks on what’s considered “traditional” sources of income – generally, interest from loans. That means our income is made primarily on the difference between what we’re charged for and the interest customers are paying to borrow it.

This simple business model is highly dependent on the ability to foster long-term relationships with loyal customers. These are customers who value the services and the personal relationship we offer so much that they’re not apt to leave every time a competing bank runs a promotion.

We call these “core deposits” and they’re essential for our success. What that should tell you is how important customers are to us, and the level of attention and financial guidance you’ll receive. We need you, and you’re going to feel that.

Big banks, on the other hand, make a significant portion of their money on non-interest income. Non-interest income is a catch-all for fees associated with savings and checking accounts: deposit and transaction fees, check and deposit slip fees, NSF/overdraft fees, inactivity fees, monthly account service charges, etc.

Rest assured, big banks find plenty of ways to carve out a good living on non-interest income. Community banks have fees, too, but our business isn’t predicated or dependent on them.

Instead, our business is focused on lending money that funds business expansions, improvements, and capital purchases to help fulfill consumer demand. This business growth creates more jobs, which in turn helps families thrive. It’s a cycle made possible, in part, by community banks lending money in the community when people and businesses need it.

A business model that depends on providing valuable services, smart financial advice and, often, lending money. That’s one great reason to bank with FNB Fox Valley, and we have more! Want to know what they are? Give us a call at 920-729-6901, or visit our website.