What makes a bank a community bank? There are lot of ways to answer that question. You could talk about how they’re locally owned. You could talk about how bank managers don’t have to consult outside shareholders to decide what’s best for customers or staff. You could point to the fact that instead of taking deposits from one state and lending it in another, they channel their loans to the neighborhoods where depositors live and work, helping local businesses and communities thrive.
These are all correct and solid answers, but the fundamental difference is that they’re deeply woven into the fabric of community life. These aren’t the towering edifices of national banking conglomerates but rather the intimate branches of community banks, each playing a vital role in the economic prosperity and well-being of the region. This fact rings true in Jefferson Parish as well.
At the heart of community banks lies a commitment to serve the needs of their neighbors. Mark Rosa, president and CEO of Jefferson Financial Federal Credit Union, emphasized the roots of these institutions in local communities. He noted that community banks are owned by citizens, fostering a sense of shared purpose and accountability.
“Community banks had their beginnings rooted in locals trying to meet the financial needs of their neighbors,” Rosa said. “They felt there was a purpose, they could fill a void, they knew the markets, people and their businesses.”
John LeBlanc, CEO of Metairie Bank and Trust, underscored the pivotal role of community banks in fostering economic growth, highlighting that deposits in community banks are reinvested within the community, fueling small businesses and driving local development initiatives.
“Those loans provide homes for family and capital for small business in the community,” LeBlanc said. “That’s not the case with national banks.”
Community banks can also make a judgment call and approve loans that they know will help a customer or local business — even, and maybe especially, when a larger, national bank might think it’s too risky. LeBlanc said a great example of this is the insurance crisis we currently face in South Louisiana.
“Local decisions matter,” LeBlanc said. “National banks are going to rely on computer algorithms to determine the credit worthiness of a borrower. They won’t understand the nuances of the community and that nuance is important.
“Living, working, and playing in the community provides us with personal insight into the uniqueness of our market,” he added. “We don’t rely on an algorithm to determine if a project will or will not be successful. We utilize our familiarity with the community to make quick local decisions.”
One of the hallmarks of community banks is their support for small businesses. These institutions serve as lifelines for local entrepreneurs, providing access to capital, financial guidance and essential banking services.
John Zollinger IV, chief banking officer at Home Bank, focused on the importance of relationship banking in empowering small businesses.
“We spend time getting to know our customers and their unique needs so we can customize solutions that help them reach their goals,” he said.
In Jefferson Parish, community banks play a distinctive role in small business lending. With a deep understanding of the local market dynamics, these institutions can offer flexible terms, quick approvals and personalized service. As LeBlanc put it: “Community banks don’t just make loans to small businesses, we are small businesses. Community bankers not only provide financial support in the communities we serve, but we take on leadership roles in civic, recreational and philanthropic organizations.”
Despite their invaluable contributions, community banks in Jefferson Parish face a myriad of challenges in fulfilling their mission, including unprecedented hurdles posed by the COVID-19 pandemic, inflationary pressures and emerging fraud schemes.
“I have never seen a more difficult financial environment than what I am working through now,” Rosa said.
Looking ahead, community banks see opportunities to enhance their impact on local economic development and community well-being. By forging strategic partnerships, investing in technology, and expanding their outreach efforts, these institutions aim to deepen their roots in the community and drive sustainable growth.
Zollinger emphasized the importance of community involvement, noting that community banks not only provide financial support but also contribute time and expertise to local organizations and initiatives.
“If you bank with a community bank, you likely have your banker’s direct phone
number or maybe even their cell phone number,” he said. “At a smaller size, we can accommodate that. That personalized service is the key to our success.”
In an increasingly interconnected world, the value of community banks lies not only in their financial services but also in their commitment to the people they serve.
“Being plugged in to the local area keeps us knowledgeable about trends and key players,” Zollinger said. “We have a closer understanding of the needs of the area where you live, where you work, and where you want to open that business.”
Drew Hawkins is a writer and journalist in New Orleans. He’s the health equity reporter in the Gulf States Newsroom, a collaboration among public radio stations in Louisiana (WWNO and WRKF), Alabama (WBHM) and Mississippi (MPB-Mississippi Public Broadcasting) and NPR. He’s also the producer and host of Micro, a LitHub podcast for short but powerful writing.
