There are nearly 4,600 banks in the United States today and community banks represent nearly 97% of them. However, their numbers in rural America are in decline. Over the course of just five years, nearly half of rural counties across the country lost bank branches, leaving quite the need.
According to Mark Scanlan with Independent Community Bankers of America, “Agriculture operates with very tight margins. So, you know, you need to be aware of what you’re doing as a banker in order to be able to help customers that are operating on thin margins and there’s a variety of different types of customers, from young farmers to many that have been in business for decades. So you know, you have to know the business model that they’re operating under and kind of what their situation is. So, that’s where the high touch, you know, know your customer type of relationship is very vital.”
The role of a rural bank goes beyond just knowledge of the industry. Scanlan says that these rural bankers often have long-term relationships with farmers and ranchers in their communities.
“They know their customers. Many cases they’ve known them for many years and walk in the door and greet each other on a first-name basis. So, I think they play a very vital role,” he explains. “They’re very important in ensuring that farmers and ranchers and others in rural America have access to financing, which is very important to keep their operations going.”
The specialized care community banks in rural America account for nearly 80% of farm real estate financing and 75% of farm operating debt.
