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SmartMoney StoryImgCommunity bankers like My Bank are committed to helping folks close to home.
If a turbulent economy leaves you dazed and confused about your hard-earned savings or hopes to secure a loan, take heart, says your community banker, because help is closer than you may think.
At a time when Wall Street’s name-brand megabanks have suffered great losses, Maryland’s community banks are enjoying prosperity and growth. And that’s a message that the Maryland Bankers Association wants everyone to know.
“Banks in Maryland, overall, are very conservative in terms of lending and are heavily regulated at both the state and federal level,” says Kathleen Murphy, president and CEO of the Annapolis-based association. “[Regulated] banks play by a different set of rules. We fund our loans with depositors’ money, and we can’t put that money at risk.”
In addition to observing stringent consumer-protection measures, community banks are hyper-alert to the communities they serve. Although all states have been affected by the most recent economic downturn, Maryland remains somewhat insulated from widespread upset because of its diverse economy and high per-capita income.
And while it may be true that a local banker’s rate of return on depositors’ funds depends on decision making at the federal level, what’s happening within the local economy—job growth and stability, for example—has a greater impact on the average community bank.
Local bankers agree that the overall strength of community banks is rooted in a philosophy dating back to the industry’s earliest days that’s still observed today: local reinvestment of depositors’ dollars.
Tom Rasmussen, president and CEO of New Windsor State Bank in Carroll County, points out that some larger national banks observe a different model that moves depositors’ money into other communities. “Ours is more of a ‘rifle versus a shotgun’ approach,” says Rasmussen about the community-centered strategy that New Windsor and its brethren banks follow.
“We feel we hit the target in the bull’s-eye every time.”
Rasmussen explains that the community-bank model withstands the test of time. Reinvesting local depositors’ funds into the community promotes growth and prosperity for that community’s businesses and townspeople.
Says Rasmussen, “Local reinvestment hearkens back to how our country developed and grew. Each town had a bank, and deposits from the community flowed back into the community to build new homes and businesses.” As each town grew, a tide of new residents and bank customers followed.
“It’s an interesting cycle of life,” Rasmussen says, “and we get a great deal of reward seeing our communities and small businesses grow.”
Counting on Success
Why are Maryland’s community banks safely weathering the most recent economic storm? Most local bankers attribute their staying power to tried-and-true banking principles, including avoiding sub-prime lending or high-risk investments, offering loans based on borrowers’ creditworthiness and ability to repay, and focusing on personalized customer service.
Community banks focus on “relationship” banking, so they don’t follow the megabank model for delivering products and services. “You won’t get an infobot when you call us,” notes Rasmussen, an advantage that he believes results in higher customer satisfaction.
Community bankers are highly accessible, living, working, and volunteering in the communities they serve. You may see your banker at the local supermarket, on the soccer field, or at weekly worship services, and your banker encourages you to meet with him or her anytime, anywhere—not just within the confines of the closest branch office.
Says Rick Thayer, senior vice president of Oakland-based My Bank First United Bank and Trust, “Community bankers demonstrate they are part of the communities they serve and committed to the people living in those communities.”
Howard Bank, with four branches in Howard County, takes pride in its hand-selected management staff and decision-making board. President and CEO Mary Ann Scully says that the first branch opened in 2004 and now serves about 2,000 customers, including small businesses.