Taylor Scott
Independent banks, also known as community banks, are locally owned and operated. They are dedicated to serving their communities through direct donations, employee volunteering, and other means. There are several independent banks in the US, including The First in Bucks County, PA, Independent Bank in Memphis, TN, and Bank Independent in Alabama. These banks offer various benefits, such as personalized customer service, ethical business decisions, and long-term relationships with customers. They also provide a range of personal and business banking services and are committed to making banking more accessible.
| Characteristics | Values |
|---|---|
| Number of commercial banks in the US | 3,917 |
| Number of savings and loan associations in the US | 545 |
| Total assets | $24.5 trillion |
| Examples of independent banks | Independent Bank Corporation, Bank Independent, The First |
| Location of Independent Bank Corporation branches | Michigan |
| Number of Independent Bank Corporation branches | 62 |
| Location of Bank Independent branches | Alabama |
| Number of Bank Independent branches | 30 |
| Services offered by independent banks | Personal and business banking, loans, checking accounts, savings accounts, mobile banking |
| Benefits of independent banks | Local focus, tailored services, long-term relationships with customers, stable and trusted, community support |
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What You'll Learn
Benefits of independent banks
There are several benefits to choosing an independent bank over a larger, national bank. Firstly, independent banks are often locally owned and operated, which means they are committed to investing in and supporting the local community and economy. This commitment to the local area means that independent banks can build long-term relationships with their customers, focusing on their specific needs and offering a more personalised service. For example, independent banks can be more flexible and nimble with processing and approving applications for loans and mortgages, and they may consider more than just a credit score when making financing decisions.
Secondly, independent banks are often more stable and trusted than larger banks, which may merge or be acquired. Independent banks are less likely to be affected by economic crashes and other financial crises, as they are not beholden to anonymous shareholders or quarterly earnings reports. This stability means that independent banks can focus on long-term strategies that benefit their customers and communities.
Thirdly, independent banks often have a more ethical approach to business. Because they are not driven by the need to maximise profits for shareholders, independent banks can make decisions that are in the best interests of their customers and employees. This can lead to higher employee satisfaction and better customer service.
Finally, independent banks often offer convenient digital services, such as mobile banking apps, that allow customers to manage their finances anytime, from anywhere. This combines the benefits of personal, local service with high-tech tools and enhanced security.
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Independent banks vs credit unions
Banks and credit unions differ in their ownership models. Banks are typically for-profit institutions owned by shareholders, offering services regionally or nationally. In contrast, credit unions are non-profit entities owned and controlled by their members, serving local communities. Credit unions have membership requirements, while banks do not.
Credit unions are generally viewed as safer than banks, as they tend to take fewer risks and follow conservative investment principles. They are also insured by the National Credit Union Administration (NCUA), which protects deposits within certain limits. Banks, on the other hand, are insured by the Federal Deposit Insurance Corporation (FDIC).
Credit unions often offer lower fees and interest rates on loans and credit products, providing more personalised customer service. They usually have fewer branches and ATMs than banks but stress their access to nationwide ATM networks that are often surcharge-free. Credit unions may also provide higher interest rates for savings accounts.
Banks may offer a wider range of financial products and services, including various accounts, loans, and investment vehicles. They have more branches and ATMs, making banking more convenient and accessible. Larger banks can provide international and commercial products and services, as well as digital conveniences like apps.
Both banks and credit unions have their advantages. Banks offer convenience and a broader range of services, while credit unions provide better rates, lower fees, and a more personalised community-focused experience.
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Independent banks in Alabama
There are several independent banks in the United States, and Alabama is home to a few of them. Bank Independent, for example, is Alabama's self-proclaimed "hometown bank", offering a blend of local, personalised service and modern, high-tech tools for secure banking. With 30 physical locations and a Digital Sales Office, Bank Independent serves its customers through its Sync Mobile banking app, which offers features for easy financial management, and online account opening for checking, savings, money markets, and CDs. The bank also has a strong community focus, with team members encouraged to volunteer and give back to the community.
Another independent bank in Alabama is Peoples Bank, which offers personal and business checking accounts. Their accounts have additional features such as Dark Web and Credit Monitoring through Experian, and Zelle for fast and free money transfers.
The Independent Community Bankers of America (ICBA) is a national organisation that supports independent banks across the country. Their ICBA ThinkTECH Accelerator programme, for example, promotes early-stage solutions tailored for community banks and their customers. While it is unclear if Bank Independent and Peoples Bank are members of the ICBA, such organisations provide a network of support and resources for independent banks to thrive.
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Independent banks in Michigan
There are several independent banks in the United States, including some in Michigan. One of the most prominent independent banks in Michigan is Independent Bank, which is headquartered in Grand Rapids and has 62 branches exclusively within the state. The bank traces its roots back to 1864 with the founding of the First National Bank of Ionia, which eventually became the Independent Bank Corporation in 1974. Independent Bank offers a range of personal and business banking solutions and is committed to helping its customers with their financial needs.
Another notable independent bank in Michigan is First Independence Bank, which has provided financial services to the community for many years. First Independence Bank is known for its competitive banking products and its dedication to serving communities that may not be adequately served by larger institutions. The bank has helped finance significant purchases, such as the 31,000 sq. ft. headquarters building for White Construction, demonstrating its support for local businesses.
In addition to these larger independent banks, there are also smaller, local institutions that serve specific communities within Michigan. These banks may have a limited number of branches or may be solely focused on digital banking services.
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Independent Community Bankers of America
The Independent Community Bankers of America (ICBA) is the primary trade group for small U.S. banks. It represents approximately 5,000 small and mid-sized financial institutions commonly referred to as "community banks". The ICBA was founded in 1930 and is headquartered in Washington, D.C., with chapters across the U.S. states.
The ICBA creates and promotes an environment where community banks can thrive. It offers a range of services, educational tools, training, and solutions tailored to community banks and their customers. The ICBA also hosts conventions and publishes the monthly magazine, "ICBA Independent Banker". Additionally, the ICBA lobbies the United States Congress on banking industry issues, advocating for policies that support community banks and their customers. For example, during financial reform attempts, the ICBA has lobbied for credit unions to not gain a competitive advantage and for smaller banks to have the ability to choose their regulators.
The ICBA ThinkTECH Accelerator program is a nationally acclaimed initiative that promotes early-stage solutions designed specifically for community banks and their customers. The ICBA also provides resources to help community banks stay competitive in recruitment and retention, offering data and insights to support their members.
The ICBA has six subsidiaries: ICBA Bancard, ICBA Securities, ICBA Financial Services, ICBA Mortgage, ICBA Insurance Services, and ICBA Reinsurance. These subsidiaries provide specialised services and solutions to support the operations and growth of community banks.
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Frequently asked questions
Yes, there are independent banks in the US. For example, there is an Independent Bank in Memphis, TN, and another Independent Bank headquartered in Grand Rapids, Michigan. There is also Bank Independent, which is based in Alabama.
Independent banks are typically smaller and more local than other banks, and often focus on providing personal and business banking solutions to their customers.
Yes, the Independent Community Bankers of America (ICBA) is an organization that creates and promotes an environment where community banks can flourish. They offer a range of services, educational tools, and training to their members.
Many independent banks offer mobile banking apps that allow customers to manage their finances on the go. For example, Bank Independent offers the Sync Mobile banking app, which gives customers access to features that simplify their financial lives.
Independent banks in the US can be insured by the Federal Deposit Insurance Corporation (FDIC). This means that your deposits are backed by the full faith and credit of the US government, up to a certain limit.
