What is community banking?

So I have an interview coming up and it’s for consumer and community banking, but I’m not sure what that means.

My research usually turns out results for retail banking and commercial banking. I just want to make sure I have a good understanding of what it is... so when they ask me “why this division...” I won’t look like an idiot.

 

In reality, its just banking. But the term usually relates to providing branch services, the corporate teams usually are doing analyst work for the branch P&L.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

Hey man, if I recall correctly, you own some organic farms, right? Would love to hear you write about your experience and why you got into that. From what I understand, organic farms and oil rigs are even better than real estate for depreciation write-off. Can't you depreciate an organic farm over 5 years? That's crazy. I can't find a whole lot online about it surprisingly.

heister: Look at all these wannabe richies hating on an expensive salad. https://arthuxtable.com/
 

No idea about organic farms, I just lease agg land. You can't depreciate land in of itself unless you are using it in a manner that generates depletion i.e. strip mining. But you can depreciate farm machinery in a rapid manner.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
Most Helpful

Community banking is commercial/retail banking on a small scale. Most people don't realize it, but there are still ~5,000 independent commercial banks in this country. While assets are skewed to the Chases and BofAs with $1T+ of assets, there are far more banks that have IB/M&A or exotic derivative products. Still could be an interesting place to learn the basics of finance, but you would have to look externally if you want to be in M&A and it would be an uphill battle compared to working at a larger bank. Also, if this is a division of a larger bank, would agree with other posters that this is likely small business lending/deposit gathering.

 

Amory is spot-on here. When I hear "community banking" I think of the same definition, small banks with assets generally less than $500 million.

OP, how big is the organization you're interviewing with? Are we talking a community banking division of a bigger bank ($50 billion+), research for IB, a true "community bank," or something else Once we know that, knowing the right answers should be pretty easy.

 

Agree with your description - I'd expect this to mean small personal loans, mortgages and very small commercial loans with a local focus.

For OP, assuming your interest is in commercial loans, it'd be worth finding out how much SBA-lending you'd be doing. I'd expect it could be significant, in which case I'd try to ask a lot of questions about the type work you could expect in your role. Because SBA loans are guaranteed by the government up to a certain %, they're typically very low-risk to the bank. That might mean you spend a whole lot more time working through the substantial amount of documentation required by the SBA than you do developing any real analytical skills.

 

A lot of them are getting acquired by larger community banks. I couldn't call them Regionals because they're still relatively small (under 10B of total assets). Synovus, as an example, goes and buys one and two branch banks all over FL / GA and have become a name brand around here. Same for Ameris. Some of them do some warehouse lending but are typically more grass roots banks dealing with the local business es. The "Business of Private Banker" is working with the physicians and law firms in the area. Maybe the guy that owns 10 McDs or gas stations. These guys are generally ignored by the large banks so they serve an important function in the local economy. Get used to sponsoring little league teams.

 

As you state, community/regional banks serve an important demographic that would otherwise have nowhere to turn for financing. Why then does it seem to be the case that many of these smaller banks are being acquired by the Chases and Wells Fargos of the world? What will happen to those that rely on having an actual personal relationship with their bank?

 

Chase, WF and the like are driving consolidation indirectly - single-branch community banks are too small to be worth their while. Most often, multi-branch banks by the single-branch, a regional buys a multi-branch, and then a $250B+ bank buys a regional.

Banks have been consolidating for decades, and yet, as AmoryBlaine states above, there are still ~5,000 independents in the US. A quick google search showed that number used to be ~8,000 in 2000, so yes there are fewer, but they're a long way from gone. Your take on fintech probably best informs how long you think the last 5,000 have left. Long run, what happens to those who rely on a personal relationship with their banker? Probably the same thing that happened to those who relied on a personal relationship with their milk man. As long as these people demand a service, the market will find a way to provide it.

 

Et illo voluptatem autem ea. Itaque sit non rerum quidem modi libero culpa.

Nihil atque doloremque tempore qui. Sequi id dignissimos eaque excepturi. Dolore dolores sit harum consequatur numquam voluptatem aliquam. Maiores quis occaecati nostrum quia rem.

Tempora maxime unde tempora qui rerum architecto. Sed iure debitis distinctio consequatur nesciunt cumque. Officiis autem exercitationem quasi molestiae doloribus. Illo recusandae rerum nam totam fuga labore illo. Magni quaerat non sequi recusandae amet cupiditate qui.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”