Is bigger better? What does it mean for consumers when smaller banks get bought by bigger banks?

Perspectives | Banking

Perspectives Banking Johnzollinger

John Zollinger
Senior Vice President and Director of Commercial Banking
Home Bank
Like anything in life, there are positives and negatives that come with any big change. On the positive side, in general, bigger banks introduce technology first and have more physical locations, which will allow for easier access to your money. This is a generality, and most community banks can compete from a technology perspective because the products and services that banks offer are homogeneous. On the negative side, it is much more difficult for a bigger bank to pay personal attention to the consumer and that connection is generally lost and service becomes very impersonal.


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Perspectives Banking Tonyadams

Tony Adams
Market President
First Horizon New Orleans
Banking is about people and relationships rather than size. Through change—Iberiabank to First Horizon and now ultimately TD—we have and will continue to retain the incredible people who take care of our clients. And yes, as we grow and get larger, we can provide more resources to our clients, including a larger balance sheet and advanced technology to protect and serve our clients. TD, in particular, is known for its consumer banking expertise, extended hours of operation and legendary customer service. That, combined with our New Orleans team, provides a very compelling opportunity for our clients.


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Sunni LeBeouf

Black History Month Spotlight This Black History Month, Cox Communications is proud to recognize Sunni LeBeouf for her prolific record of professional achievement, civic philanthropy,...

Perspectives Banking Palermo

When your banker is local, you benefit from having more than a banker who is an expert in your industry: They also understand your business, share your vision, and believe in the positive impact your business can make in your community. At b1BANK, our decisions are made locally, resulting in faster results, and our lenders are part of the decision-making process, giving clients a voice and supporting their goals.

Chris Palermo, Marketing President, b1BANK


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Perspectives Banking Guywilliams

Guy Williams
Gulf Coast Bank and Trust
Bigger and better for Toronto. Bank mergers are creating industry consolidation and real benefits for some cities, but not New Orleans. Recently, TD Bank announced the acquisition of First Horizon, the recent acquirer of IberiaBank. The merger announcement also disclosed $610 million in non-interest cost savings, which means that almost one-third of First Horizon/Iberia employees will lose their jobs.

All of the job losses will be absorbed by the banks being acquired. For us in New Orleans, that means job losses. It also means a brain drain as talented professionals leave. For Toronto, it means bigger budgets and salaries for senior executives. Charitable contributions and civic leadership are concentrated in headquarters cities. This is good news for Toronto, home of TD Bank.

There is also an almost perfect inverse correlation between bank size and rates paid on consumer deposits. The bigger the bank, the lower the interest paid to consumers. As we lose a local bank, consumers will now see the lower deposit rates that are common for super regionals.

Is bigger better? Not for smaller cities and consumers.


Perspectives Banking Chrisferris

Chris Ferris
President and CEO
Fidelity Bank
When a bigger bank buys a smaller bank, often what is lost is a personal touch and local decision making. Local, community banks pride themselves on investing in their community because their team members also live and work in the community. Smaller, local, community banks often understand the nuisances of the community and the local industries that can thrive. They have the unique understanding and perspective that a larger bank may not have. What a consumer might gain are more branch locations across a multi-state region in many cases.

There used to be a perception that a larger bank has more technology. That may have been true when computers took up a whole room, but that is just not the case with digital technology today. Most smaller banks are now able to offer the same technology as larger banks.



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