What Do We Mean By Community Bank?

To a read a newspaper or watch broadcast news lately, you’d think banks are the great enemies of the republic. Assuredly the 2008 financial crisis demonstrated what happens when large, transnational banks make risky bets. But Andover State Bank is a community bank, and community banks have served as the backbone of the American economy for more than a century. In fact, 94 percent of all banks in the United States are classified by the Federal Deposit Insurance Corporation (FDIC) as community banks.

What is a community bank? The FDIC describes some of the characteristics in a 2012 report published here:

Community banks are known for their focus on traditional banking activities.

Community banks mainly conduct lending and deposit activities within a localized area.

Community bankers are relationship lenders; they rely on specialized knowledge gained through long-term business relationships.

Community banks place the long-term interest of their local communities above the demands of capital markets.

Andover State Bank meets these criteria and then some. Whereas other banks in our market trade publicly on the New York Stock Exchange or NASDAQ, we’ve been locally owned for 100-years. Noncommunity banks ($1 billion or more) account for 85 percent of total industry assets; they function as “deposit locations.” Their nationwide branch system accepts deposits, transforms them into loans, and redistributes them across the United States and world. Community banks, on the other hand, reenter their customers’ deposits into their local communities, where they build new infrastructure, create jobs, and promote growth.

The FDIC summarizes the role of a community bank as fostering economic growth “to ensure that the financial resources of the local community are put to work on [the community’s] behalf.” When you choose Andover State Bank as your depository institution, you’re also choosing Andover, Wichita, and the state of Kansas.

Join our team

Younity starts here. Get more customer stories, news and offers delivered direct.