ABA Banking Journal - November/December 2017 - 31

Survive
there were close to 18,000 banks-today, just under 6,000
remain. That amounts, roughly, to a loss of one bank per
business day.

"Consolidation has really become a business reality for
the banking industry," says Brittany Kleinpaste, director
of economic policy research at ABA and leader of the
association's staff task force on bank consolidation. "Banks
today are choosing to merge for many reasons-from
macroeconomic pressures such as compressed earnings,
rising expenses and scarcity of capital, to the regulatory
burden that's been placed on them in recent years. Many
are also taking advantage of economies of scale that can
come from combining with another bank."
Consolidation may be ongoing, but that's not to suggest that
the industry itself is shrinking-in fact, it's just the opposite.
Total assets held by commercial banks have continued to
grow over the last several years, now totaling nearly $17
trillion, and the total number of bank employees has held
relatively steady at around 2 million.
What has changed, however, is the composition of the
remaining banks. As consolidations have taken place
(particularly in the post-Dodd-Frank Act era), the number of
banks with more than $1 billion in assets has grown between
9 and 12 over the past six years, while those under $1 billion
have undergone consolidation at significantly higher rates. For
example, 18 percent of banks between $100 million and $1
billion disappeared between 2010 and 2016. In addition, 44
percent of banks under $100 million disappeared.
"In many cases-especially in rural areas-these
consolidating institutions are the small community banks,
the lifeblood of the local community," says Kleinpaste. "They
provide much-needed credit to small businesses, farmers,
ranchers and manufacturers. They support local causes

through donations to nonprofit organizations and volunteer
service. And they do it all in the spirit of helping to improve the
lives of the people that they have served over the years. The
loss of a bank can have a significant impact on a community."
American consumers agree that having a diverse banking
system is important-in fact, a recent ABA/Morning Consult
survey found that an overwhelming 89 percent believe that
it is somewhat or very important that the U.S. have banks
of all sizes. Regulators and lawmakers, too, have noted the
significance of a diverse financial system.
But words alone are not enough to ensure the survival of
the nation's community banking industry. And community
bankers know that maintaining an independent operation
doesn't happen automatically-it takes strategic vision,
goal-setting and indeed, an ability to adapt to change.
That's why many are making adjustments to their ownership
or operational structures that have allowed them to maintain
their identities as community banks, create shareholder
value and continue meeting the needs of their local
customers and communities.

A community comes together
It was a few days before Christmas of 2012 when Brian
VanFosson learned that his bank was on the verge of
being sold.
Citizens Bank of Rogersville-located about 10 miles south
of Springfield, Mo.-had been owned and operated by two
local families since its founding in 1908. But as the bank's
then-president and CEO Nancy Ruyle and her husband,
Charlie, neared retirement, they-like so many others at
family owned and operated institutions across the country-
found themselves with no one to take over the bank's dayto-day operations.

The trend lines over the last 30 years or so have shown a steady decline in
the number of bank charters in the United States, due to both failures
and merger and acquisition activity.
aba.com/BankingJournal | ABA BANKING JOURNAL

31


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Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2017

Chairman’s View
Upfront
Legal Briefs
Economic Outlook
Power Up Profile
Pitching In
Choices and Options Down on the Farm
Eager or Not, Every Board Needs an M&A Strategy
Adapting to Survive
More Than Just a Drink
Operations
Payments
Small Business Lending
Human Resources
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
From the Vault
ABA Banking Journal - November/December 2017 - Intro
ABA Banking Journal - November/December 2017 - ebelly1
ABA Banking Journal - November/December 2017 - ebelly2
ABA Banking Journal - November/December 2017 - cover1
ABA Banking Journal - November/December 2017 - cover2
ABA Banking Journal - November/December 2017 - 3
ABA Banking Journal - November/December 2017 - 4
ABA Banking Journal - November/December 2017 - 5
ABA Banking Journal - November/December 2017 - 6
ABA Banking Journal - November/December 2017 - 7
ABA Banking Journal - November/December 2017 - Chairman’s View
ABA Banking Journal - November/December 2017 - 9
ABA Banking Journal - November/December 2017 - Upfront
ABA Banking Journal - November/December 2017 - 11
ABA Banking Journal - November/December 2017 - 12
ABA Banking Journal - November/December 2017 - 13
ABA Banking Journal - November/December 2017 - 14
ABA Banking Journal - November/December 2017 - 15
ABA Banking Journal - November/December 2017 - Legal Briefs
ABA Banking Journal - November/December 2017 - 17
ABA Banking Journal - November/December 2017 - Economic Outlook
ABA Banking Journal - November/December 2017 - Power Up Profile
ABA Banking Journal - November/December 2017 - Pitching In
ABA Banking Journal - November/December 2017 - 21
ABA Banking Journal - November/December 2017 - 22
ABA Banking Journal - November/December 2017 - 23
ABA Banking Journal - November/December 2017 - 24
ABA Banking Journal - November/December 2017 - 25
ABA Banking Journal - November/December 2017 - Choices and Options Down on the Farm
ABA Banking Journal - November/December 2017 - 27
ABA Banking Journal - November/December 2017 - Eager or Not, Every Board Needs an M&A Strategy
ABA Banking Journal - November/December 2017 - 29
ABA Banking Journal - November/December 2017 - Adapting to Survive
ABA Banking Journal - November/December 2017 - 31
ABA Banking Journal - November/December 2017 - 32
ABA Banking Journal - November/December 2017 - 33
ABA Banking Journal - November/December 2017 - More Than Just a Drink
ABA Banking Journal - November/December 2017 - 35
ABA Banking Journal - November/December 2017 - Operations
ABA Banking Journal - November/December 2017 - 37
ABA Banking Journal - November/December 2017 - Payments
ABA Banking Journal - November/December 2017 - 39
ABA Banking Journal - November/December 2017 - Small Business Lending
ABA Banking Journal - November/December 2017 - 41
ABA Banking Journal - November/December 2017 - Human Resources
ABA Banking Journal - November/December 2017 - 43
ABA Banking Journal - November/December 2017 - 44
ABA Banking Journal - November/December 2017 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2017 - From the States
ABA Banking Journal - November/December 2017 - 47
ABA Banking Journal - November/December 2017 - Corporate Social Responsibility
ABA Banking Journal - November/December 2017 - Index of Advertisers
ABA Banking Journal - November/December 2017 - From the Vault
ABA Banking Journal - November/December 2017 - cover3
ABA Banking Journal - November/December 2017 - cover4
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