Community banking is on the rise and the D.C. area is no exception.
While giant banks are consolidating, small banks flourish by targeting niche markets and enticing disgruntled customers with personal service.
At least 80 percent to 90 percent of U.S. banks today are community banks, said Bert Ely, president of Ely & Company, a consulting firm in Alexandria.
"[Community banks] are not a flash in the pan. As long as the government doesn't [handicap them] they are going to be a permanent part of the banking industry," he said.
Single-branch James Monroe Bank in Arlington opened last June in the midst of a community bank wave. President and Chief Executive Officer John Maxwell said the bank was expected to break even in 18 months but succeeded in 10. On June 30, assets had risen to more than $38.4 million.
Community banks often cater to niche markets to attract business; James Monroe is focused on small business lending.
"That is the trend and in my opinion it's just beginning. There is that void that's left for the smaller people," he said. "The entrepreneurs out there are really the backbone of small banks."
James Monroe offers additional services for small business owners, including PC banking and business sweep accounts. The bank has also hosted several seminars that offer entrepreneurs advice on starting or expanding a business.
"Most of the start-up banks are focused on small business professionals, the self-employed . . . that's where there is a greater receptivity. Community banks are more flexible in dealing with smaller businesses," Mr. Ely said.
Big bank mergers also give small banks the opportunity to snag a few clients from the fallout of angry customers who are through dealing with the giants. …