FIN 3636 Chapter : Chapter 3 Notes
Document Summary
Chapter 3 the organization and structure of banking and the financial-services industry. Community banks focus on providing traditional banking services (checking accounts and loans) in their local communities. Obtain most of their core deposits locally and make many of their loans to local businesses. Often considered to be relationship bankers as opposed to transactional bankers. More likely to be privately owned and locally controlled than larger banks. Even when community banks have public shares, they are usually not traded on the major exchanges. They may weigh the competing interests of shareholders, customers, employees, and the local community differently from a larger institution with stronger ties to the capital markets. Community banks have specialized knowledge of their local community and their customers. They tend to base credit decisions on local knowledge and nonstandard data obtained through long-term relationships. Less likely to rely on the models-based underwriting used by larger banks.
