community .docx - What is a community bank It has been...

What is a community bank?
It has been noted that though banks size may be the best single proxy for
identifying a community bank, (Robert, William & Gregory, 2004). If this is used
to define the community banks, then some of the large community banks will not
be left out but the small ones will. It does not just use fixed size limits to determine
which banks belong in our sample. A community bank can therefore be define by
considering the total consolidated assets it owns as well as consider other factors like
the extent at which the bank can use the geographic scope plus the community
relationship approach.
Table 1: The Definition of Community Banks in the U.S.
Author
Definition of Community Banks in the
U.S.
The Comptroller of the Currency
(OCC)
Banks with less than $1 billion in total assets
and may include limited-purpose chartered
institutions, such as trust banks and
community development banks.
The Government Accountability Office
(GAO)
Used a $10 billion cutoff in a study on
community banks.
Federal Reserve Board
Community banks serve businesses and
consumers throughout the country, in both
rural and urban areas, and are leading
provider of credit to small businesses. In
general, community banks can be defined as
those owned by organisations with less than
$10 billion in assets. Regional and
community banking organisations constitute
the largest number of banking organisations
supervised by the Federal Reserve System.
Tanya & Joseph 2013
The term “community bank” is used
generally to describe medium and small
banking organisations located in and focused
on limited geographic areas and that engage
in traditional banking activities while
obtaining most of their funding from local
deposits.

Young.R.D., Hunter.W.C.& Udel.G.F 2004
“A community bank is a financial institution
that accepts deposits from and provides
transactions services to local households and
businesses, extends credit to local
households and businesses, and uses the
information it gleans in the course of
providing these services as a comparative
advantage over larger institutions.
Federal Deposit Insurance Corporation
(FDIC)
A summary of the definition appears in Table
2
Table 2
FDIC Community Bank Definition:
1. An institution that has less than $1 billion in assets1 is a community bank if it:
(1) At year end, does not have an asset concentration exceeding 50% of total assets in non-
community speciality banks, including: 
credit card specialists,
consumer nonbank banks, 
industrial loan companies, 
trust companies, and/or 
bankers’ banks; and
(2) Holds less than 10% of its assets in foreign assets.