Is an environment of low interest rates, slow economic growth, new financial regulations and pressing technological demands crushing the US's community banks, as the CEOs of some of these banks allege? Or is the outlook for the country’s 6234 community banks – with assets ranging from less than $100m to $10bn – much more nuanced?
Vindicating the latter view are results from the first quarter of 2014, published by the Federal Deposit Insurance Corporation (FDIC). These show that more than half of the US's community banks are more profitable than they were a year ago. There was an aggregate decline in profits of 1.5% compared with the first quarter 2013, but this is far less than the 7.6% profit drop that was seen across the entire US banking industry in the period.
