FDIC Quarterly 44 2014, Volume 8, No. 2

This is not the first time FDIC analysts have addressed 

the subject of rural depopulation. A 2004 issue of the 

FDIC Banking Review contained an article titled “Rural 

Depopulation: What Does It Mean for the Future 

Economic Health of Rural Areas and the Community 

Banks That Support Them?” 

3

 That article explored the 

relationship among agriculture, population density, and 

depopulation for the period 1970 to 2000, describing 

the demographic components of the rural depopulation 

trend as well as the roles played by technological change 

and organizational innovation. Focusing on the Great 

Plains region, the article noted the pressures that depopulation can place on both sides of the banking balance 

sheet and the difficulties it can pose in the recruitment 

and retention of bank management and staff.

Part I of this article builds on the earlier article by 

incorporating county-level population data from the 

2010 Census to compare the depopulation trends of 

1970 to 2000 with those of 1980 to 2010. We highlight 

the particular affinity between depopulation and the 

Great Plains, and elaborate on the connection between 

rural depopulation and age distribution within the 

depopulating counties. In Part II, we focus on community banks in rural depopulating regions: the particular 

characteristics of these banks, their striking financial 

performance between 2000 and 2012, and the degree to 

which they have been affected by consolidation. Part III 

describes recent developments that may positively affect 

depopulation trends in some areas. Our conclusion, in 

this article as in the earlier one, is that despite the 

adverse effects of depopulation, rural community banks 

as a group have tended to perform well, but achieving 

growth remains a challenge.

Part I

Depopulation Trends

The trends discussed in Part I are: the depopulation 

trends in rural areas for the period 1980 to 2010 

compared with the period 1970 to 2000; depopulation 

and population density in the Great Plains, the region 

that has long been affected most strongly by rural 

depopulation and that has the lowest population density 

of any of the four regions with high rates of depopulation; and the relationship between rural depopulation 

3

 John Anderlik and Jeffrey Walser, “Rural Depopulation: What Does It 

Mean for the Future Economic Health of Rural Areas and the Community Banks That Support Them?” FDIC Banking Review 16.3 (2004), 

http://fdic.gov/bank/analytical/banking/2005jan/article2.html.

Introduction

This article explores trends in rural depopulation in the 

United States and the implications of these trends for 

rural community banks. Although rural depopulation 

continues to pose significant challenges for rural areas, 

community banks appear to be coping fairly well—much 

better, in fact, than one would have expected. Nevertheless, the underlying negative effects of depopulating 

rural areas have been neither eliminated nor reduced, 

and to the extent that depopulation accelerates over 

time, its effects will increasingly create problems for 

community banks that operate in affected areas.

Depopulation in rural counties can be seen throughout 

the United States. Between 1980 and 2010, the total 

number of U.S. residents increased by more than 36 

percent to nearly 309 million.1 During that same 30-year 

period, more than half of all U.S. rural counties lost 

population. In fact, the rural counties that experienced 

outflows lost 14.8 percent of their population on average.

The onset of rural depopulation in the United States 

antedates 1980, with more than one-third of U.S. rural 

counties having reached their maximum population 

before 1930, and the trend appears to be accelerating. 

Between 1980 and 2010, some 692 rural counties lost 

population, compared with 529 that lost population 

between 1970 and 2000.

The United States is not the only country experiencing 

the gradual depopulation of its rural areas. Several 

studies have documented similar trends in Canada and 

Mexico; countries in South America; China, Japan, 

and other Asian countries; as well as some European 

countries.2 Factors cited by these studies to explain rural 

depopulation include productivity gains that led to agricultural consolidation and a reduction in the number 

of farm workers required; a lack of opportunities for 

nonfarm employment in the affected areas; and prospects for higher standards of living in urban centers.

1

 All population figures cited in this article are from the U.S. Census.

2

 See, for example, James P. Robson and Prateep K. Nayak, “Rural OutMigration and Resource-Dependent Communities in Mexico and India,” 

Population and Environment 32.2–3 (Dec. 2010): 263–284; Shim Jae 

Hoon, Robert Delfs, and Julian Baum, “Rural Exodus: Seeds of Despair,” 

Far Eastern Economic Review 156.9 (Mar. 4, 1993): 20; Thomas Feldhoff, “Shrinking Communities in Japan: Community Ownership of Assets 

as a Development Potential for Rural Japan?” Urban Design International, 

suppl. Special Issue: Shrinking Cities 18.1 (Spring 2013): 99–109; Vladimir Drgona and David Turnock, “Policies for Rural Eastern Europe in 

Transition: The Case of Slovakia,” GeoJournal 50.2–3 (2000): 235–247.

Long-Term Trends in Rural Depopulation and 

Their Implications for Community Banks
FDIC Quarterly 45 2014, Volume 8, No. 2

Rural Depopulation

counties (either declining or accelerated declining). 

The study also found that depopulation appeared to be 

occurring primarily in rural areas. From 1970 to 2000, 

some 32 percent of rural counties had lost population, 

compared with just 11 percent of metro counties (for 

the definitions of rural, metro, and micro counties, see 

inset box above).5 Furthermore, the vast majority of 

depopulating rural counties were identified in 2004 as 

belonging to one or another of four distinct geographic 

areas: the Great Plains, the Corn Belt, the Delta-South, 

and Appalachia-East.6

Although the 2004 study focused on the Great Plains, 

the factors leading to long-term depopulation were basically similar across the four regions. In all four, fewer 

workers were needed in the dominant economic sector 

(agriculture in the center of the country, coal mining in 

Appalachia-East), but jobs in other sectors were scarce.7

Hence these regions saw an out-migration to urban 

5

 We use the shorthand “metro” to refer to counties belonging to a 

metropolitan statistical area, and “micro” to refer to counties belonging to a micropolitan statistical area, as defined in the inset box.

6

 These areas are defined in the 2004 FDIC article and are shown on 

Map 2 of this update.

7

 As noted in the introduction, ongoing consolidation in the agricultural 

sector was largely the product of technological change and organizational innovation.

and age distribution (age distribution is an indicator of 

the vitality that characterizes local communities).

Depopulation Trends in Rural Areas, 

1970–2000 and 1980–2010

The 2004 FDIC study focused on population trends at 

the county level during the 30 years from 1970 to 2000, 

categorizing all U.S. counties according to the population trends they experienced during this period.4

 Counties that gained population were designated “growing 

counties,” while those that lost population were designated “depopulating counties.” Depopulating counties 

were segmented according to whether their rate of 

population loss did or did not accelerate during the 

1990s (the last of the three decades in the period under 

study): Depopulating counties whose rates of outflow 

during the 1990s did not increase were designated 

“declining counties,” while depopulating counties 

whose rates of outflow during the 1990s did increase 

were designated “accelerated declining counties.”

Using these definitions, the study found that in 2000, 

one-quarter of all U.S. counties were depopulating 

4

 In this paper we use the term “county” to refer to counties and other 

geographies (for example, parishes, municipios, districts, and islands) 

that are treated as county equivalents by the U.S. Census Bureau.

The U.S. Office of Management and Budget (OMB) 

designates clusters of counties as metropolitan statistical 

areas or micropolitan statistical areas (the latter category 

was first defined in 2003) to provide nationally consistent definitions for collecting, tabulating, and publishing federal statistics. The OMB bases the designations 

on the population size of the urban cores and on socioeconomic integration. Under these definitions, metropolitan areas have an urban core of at least 50,000 

people. Micropolitan areas, though otherwise similar to 

metropolitan areas, have an urban core of between 

10,000 and 50,000 people. The OMB periodically 

reviews and revises its designations of metropolitan and 

micropolitan, adding new metropolitan and micropolitan clusters as well as adding or deleting individual 

counties from existing clusters of designated metro and 

micro areas.

The 2004 FDIC study based its system for classifying 

counties as rural on the OMB 2000 core statistical area 

definition file, which did not yet include micropolitan 

statistical area definitions. The 2004 study labeled counties shown to be part of metropolitan statistical areas as 

metro counties and all other counties as rural counties. 

The present update uses the OMB 2009 core statistical 

area definitions, which include micropolitan statistical 

areas. Thus, this update labels counties belonging to 

metropolitan areas as “metro counties,” counties belonging to micropolitan areas as “micro counties,” and all 

other counties as “rural counties.”

In full, in its 2009 definitions the OMB reclassified 401 

counties from rural to micropolitan in the four FDICdefined depopulating areas (see footnote 6): Corn Belt 

(166), Delta-South (104), Great Plains (84), and Appalachia-East (47). Much like their larger (metro) counterparts, micro counties tend to have growing populations. 

In the 2004 FDIC study, most of these counties had been 

classified as “growing” rural counties, and between 1980 

and 2010, 70 percent of them added population.

Changes to Definitions of County Types 

Between the 2000 and 2010 Census Periods
FDIC Quarterly 46 2014, Volume 8, No. 2

between 1980 and 2010 without reference to the 

designation of rural or urban, and we see that the longterm trend of depopulation is accelerating. Between 

1980 and 2010, 1,043 U.S. counties (32 percent) lost 

population, compared with 779 counties (25 percent) 

between 1970 and 2000. Moreover, the number of 

counties meeting the definition of “accelerated declining” rose from 188 at the 2000 Census to 393 as of 2010.

Map 1 shows that most depopulation continues to occur 

in the center of the country, with additional concentrations of depopulating counties among states of the midSouth region and the noncoastal states of the East. 

Because these geographic concentrations have remained 

relatively unchanged since our previous study, we 

continue to group depopulating counties within the 

four geographic areas of the Great Plains, the Corn 

Belt, the Delta-South, and Appalachia-East.

Map 2, which uses the same data as Map 1, shows that 

the four depopulating regions comprise the vast majority of the nation’s depopulating rural counties. In 2010, 

areas or rural counties that offered employment in 

manufacturing or retail. This out-migration in turn led 

to a slow disintegration of rural towns, which led to 

further population outflows. The result has been a longterm cycle of population decline in many rural counties.

More-current data allow us to compare depopulation 

trends and locations for our two 30-year periods.8 Map 1 

shows the population category of all U.S. counties 

8

 In this update, we applied the current county border definitions 

(2010) and the Office of Management and Budget statistical area definitions (2009) back to 2000 to make valid comparisons with the previous FDIC study. In addition, we expanded the current analysis to 

include geographic coverage beyond the 50 states and Washington, 

D.C., that were used in the 2004 study. These areas include American 

Samoa, Federated States of Micronesia, Guam, Commonwealth of the 

Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands, 

although these additions are not shown on Maps 1 and 2. Together, 

these 6 territories encompass 95 counties, of which 85 are growing, 5 

are declining, and 5 are accelerated declining. With the broader 

geographic scope of this study and with the changes made to county 

definitions between 2000 and 2010, this update covers 3,238 counties, 

compared with 3,141 in the 2004 study. 

Approximately One-Third of U.S. Counties Lost Population Between 1980 and 2010

Source: 2010 U.S. Census Population compared with 1980 U.S. Census Population.

Note: Growing—population increased between 1980 and 2010; Declining—population declined between 1980 and 2010;

Accelerated Declining—population declined between 1980 and 2010, and the rate of decline between 2000 and 2010 worsened 

from the previous two decades. 

Population Category

(Number of Counties)

Growing (2195)

Declining (650)

Accelerated Declining (393)

Map 1
FDIC Quarterly 47 2014, Volume 8, No. 2

Rural Depopulation

Table 1, which breaks down the population trend in 

number of counties for each of the four regions, shows 

that depopulation continues to be most prevalent in 

the Great Plains region, with Corn Belt counties experiencing the second-highest rate of depopulation. Some 

71 percent of Great Plains counties (340 of 478), and 

41 percent of Corn Belt counties (310 of 749) lost 

population between 1980 and 2010.

the four depopulating regions contained 530 of the 

nation’s 650 declining counties and 343 of its 393 

accelerated declining counties (see Table 1). More than 

46 percent of all counties in these regions lost population between 1980 and 2010. Although depopulating 

counties were also found outside the four depopulating 

regions—170 of them in 2010—such counties constituted only 13 percent of all the depopulating counties.

U.S. Rural Depopulation Remains Concentrated in Four Distinct Regions

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 

2010 OMB Metropolitan and Micropolitan Statistical Area county classifications.

Note: Growing—population increased between 1980 and 2010; Declining—population declined between 1980 and 2010;

Accelerated Declining—population declined between 1980 and 2010, and the rate of decline between 2000 and 2010 worsened 

from the previous two decades. 

Rural County

Growing

County Type

Metropolitan or

Micropolitan County

Declining

Accelerated Declining

Great Plains

Corn Belt

Appalachia-East

Delta-South

Map 2

Four Broad Geographic Regions Have Most of the Nation’s Depopulating Counties

Region

Number of Counties

Growing Declining Accelerated Declining Region Total

Great Plains 138 199 141 478

Corn Belt 439 198 112 749

Delta-South 316 65 70 451

Appalachia-East 125 68 20 213

Other 1,177 120 50 1,347

U.S. Total 2,195 650 393 3,238

Source: 2010 U.S. Census Population compared with 1980 U.S. Census Population.

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands.

Table 1
FDIC Quarterly 48 2014, Volume 8, No. 2

the difficulties it poses to local governments in maintaining critical infrastructure such as transportation 

systems and public schools.

The majority of Great Plains counties—rural, micro, 

and metro—lost population during the 1930s, when 

Dust Bowl conditions across the region created overwhelming adversity for agricultural producers and local 

communities. Although no decade since then has been 

nearly as challenging to the region, a majority of Great 

Plains counties have experienced depopulation in every 

decade since 1930 (see Chart 1). Between 1930 and 

2010, rural counties in the Great Plains region cumulatively shed more than 40 percent of their population; 

the rural counties of the Delta-South followed, but 

there the cumulative loss was just 5 percent.

Table 2 takes the depopulating counties only, and 

breaks them down in percentages by type of county for 

each of the four regions, thus helping to illustrate the 

extent to which long-term U.S. depopulation is most 

pronounced in rural counties generally and in rural 

counties in the Great Plains region specifically. Half of 

all rural counties in the United States lost population 

between 1980 and 2010, compared with 30 percent of 

micro counties and just 12 percent of metro counties. 

Among rural and micro counties, the greatest concentration of depopulating counties was found in the Great 

Plains, where 86 percent of rural counties and 51 

percent of micro counties lost population. The trends 

are similar, if less pronounced, in the other three depopulating regions.

Although the Great Plains region has the highest overall share of depopulating counties, the trend toward 

greater depopulation is accelerating in all four regions. 

Between 1980 and 2010, 52 percent of Great Plains 

counties lost population faster than they had between 

1970 and 2000, followed by the other three depopulating regions, where 28 to 36 percent of counties lost 

population faster. In only a few counties in the four 

regions did the population decline either slow down or 

reverse itself.

Depopulation and Population Density in the 

Great Plains

As noted several times above, of the four major regions 

undergoing rural depopulation, the Great Plains region 

stands out. It is noteworthy for the intensity and duration of its depopulation trend and for its low population 

density. Low population density is important because of 

Half of All U.S. Rural Counties and 

86 Percent of Great Plains Rural Counties 

Lost Population Between 1980 and 2010

Region

Percent of Counties That Lost Population 

Between 1980 and 2010

Rural Micropolitan Metropolitan

Great Plains 86 51 11

Corn Belt 59 43 20

Delta-South 44 34 13

Appalachia-East 43 48 36

Other 23 11 4

U.S. Total 50 30 12

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 

2010 OMB Metropolitan and Micropolitan Statistical Area county classifications.

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands

Table 2

For Eight Consecutive Decades, a Majority of Great Plains Counties Lost Population 

0

10

20

30

40

50

60

70

80

90

191019301950197019902010191019301950197019902010191019301950197019902010191019301950197019902010

Share of Counties With Negative Population Growth During the Decade

(Percent)

Appalachia-East Corn Belt Delta-South Great Plains

Source: Bureau of U.S. Census, decennial census data.

Note: Counties with zero or unknown population at the beginning or ending of the census period were excluded from the calculations. 

Chart 1
FDIC Quarterly 49 2014, Volume 8, No. 2

Rural Depopulation

becomes most pronounced in accelerated declining 

counties, from which many people aged 20 to 45 have 

departed in search of better opportunities in fastergrowing areas.

The age pyramids also indicate a relatively high proportion of elderly people in depopulating rural counties. In 

2010, some 13.2 percent of the residents of accelerated 

declining rural counties were aged 70 or older, 

compared with 10.6 percent in micro counties and only 

8.6 percent in metro counties.

The demographic trends shown in the age pyramids do 

not represent a new phenomenon for depopulating rural 

areas. A similar shape, showing a pinched waist for 

young adults and a relatively high proportion of elderly 

persons, was shown in age pyramids in the 2004 study.

Part II

Depopulation and Rural Community Banks

Outflows of young adults have clear implications for 

rural community banks, but many of the effects have 

been mitigated by other factors in recent years.10 This 

part of the paper compares the characteristics of rural 

10 Population outflows also have clear implications for local governments. The combination of relatively few working young adults and 

college graduates plus a relatively high proportion of elderly residents 

can put significant fiscal strains on depopulating rural counties. Local 

governments subsidize the primary education of young citizens, but if, 

after graduating from college, these citizens live elsewhere, the governments do not reap the rewards that flow from adding college-educated 

people to the local labor force and tax base. In addition, the moreelderly populations that are left behind tend to require certain specialized governmental services that add costs to local government budgets.

Table 3 shows that population densities tend to be 

lower in the Great Plains counties (rural, micro, and 

metro) than in the other depopulating regions. Rural 

counties in the Great Plains average only 4.2 people per 

square mile, whereas rural counties in the Corn Belt, 

Delta-South, and Appalachia-East have an average 

population density six to ten times greater. Micro and 

metro counties in the Great Plains also have much 

lower population densities than micro and metro counties in the other depopulating regions.

Rural Depopulation and Age Distribution

One very important aspect of the overall depopulation 

trend is its close connection to the age distribution in 

rural areas. Many rural areas have experienced outmigration of young adults beginning after the high 

school years, as these people move for better employment or educational opportunities.9

 The result is a 

dearth of residents in their 20s, 30s, and early 40s—

age cohorts that represent a substantial portion of 

child-rearing, working-age adults.

Chart 2 illustrates the effects of these trends in terms of 

“age pyramids,” or population distributions, broken 

down by five-year age cohorts. The top age pyramid on 

the left shows the distribution for all metropolitan 

counties in the United States. Notwithstanding the 

bulge among the baby boom cohorts now aged between 

45 and 59, the age distribution in metropolitan U.S. 

counties is fairly uniform across age cohorts through age 

55, after which the relative share of population gradually declines.

The next pyramid, for the nation’s micropolitan counties, starts to show a different shape, with fewer people 

in the 20 to 45 range than metro counties. In the 

micropolitan counties, the shape of the pyramid demonstrates what some demographers refer to as a “pinched 

waist,” which indicates that the populations aged 20 to 

45 are smaller than the populations younger or older 

than the 20 to 45 group.

In rural areas the pinched waist becomes more 

pronounced. The relative absence of people in the 20 

to 45 age group reflects the effects of out-migration by 

young adults. The convex shape of these age pyramids 

9

 Although out-migration of young adults is the most significant demographic trend in depopulating rural counties, weak or negative “natural 

increase” (or births minus deaths) is also a factor affecting population 

growth in these areas. The role of natural increase in depopulating 

rural counties is discussed in more depth in the 2004 study.

Population Densities Are Low in Rural 

Counties, Especially Those in the Great Plains

Region

Population Density (people/square mile)

Rural Micropolitan Metropolitan

Great Plains 4.2 18.8 110.7

Corn Belt 25.9 67.6 336.0

Delta-South 30.1 62.5 205.6

Appalachia-East 41.5 96.3 573.3

Other 7.7 33.6 281.7

U.S. Total 10.6 42.2 285.9

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 

2010 OMB Metropolitan and Micropolitan Statistical Area county classifications.

Note: ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands.

Table 3
FDIC Quarterly 50 2014, Volume 8, No. 2

total assets of nearly $150 billion (see Table 4).11

Although the total assets of these institutions represent just 1 percent of the banking industry’s total 

assets, the number of community banks in depopulating rural counties constitutes 15 percent of all insured 

institutions in the nation, and 16 percent of all 

community banks.

Like the areas they serve, community banks headquartered in depopulating rural areas tend to be clustered in 

the Great Plains and the Corn Belt. (The Great Plains 

contains so many depopulating areas that nearly half of 

all community banks in the region are located in 

depopulating rural counties.) Together, the Great 

11 The FDIC Community Banking Study (which defines community 

banks for purposes of the data in Table 4) was built around a custom 

definition that emphasizes traditional banking activities and a limited 

geographic scope of operations. This present study uses the same 

definition. For a complete description of the definition, see http://www.

fdic.gov/regulations/resources/cbi/report/CBSI-A.pdf.

community banks with those of community banks headquartered in metropolitan and micropolitan counties, 

and then compares community banks in the three types 

of counties in terms of their financial performance. The 

finding is that in recent years, the loan mix of banks in 

rural depopulating areas has helped to insulate them 

from the worst effects of the recent financial crisis and 

recession, and although these banks still find it challenging to grow their balance sheets, community banks 

in depopulating rural areas have actually fared better, 

on average, than banks in metro areas. Finally, the 

comparison is made with community banks in the 

different types of counties with respect to the consolidation of charters. Here, too, depopulation does not 

appear to have had the expected negative effect.

Characteristics of Community Banks Headquartered 

in Depopulating Rural Areas

As of year-end 2012, there were 1,064 community 

banks headquartered in depopulating rural areas, with 

The ‘Pinched Waist’ in Depopulating Rural County Age Pyramids Reects the Outow of Young Adults 

U.S. Metropolitan and Micropolitan Counties—Distribution by Age

Sources: 2010 U.S. Census Population compared with 1980 U.S. Census Population and 2010 OMB Metropolitan and Micropolitan Statistical Area county classifications.

10% 8% 6% 4% 2% 0% 0% 2% 4% 6% 8% 10%

<5 

 10–14 

 20–24 

 30–34 

 40–44 

 50–54 

 60–64 

 70–74 

 80–84 

10% 8% 6% 4% 2% 0% 0% 2% 4% 6% 8% 10%

<5 

 10–14 

 20–24 

 30–34 

 40–44 

 50–54 

 60–64 

 70–74 

 80–84 

10% 8% 6% 4% 2% 0% 0% 2% 4% 6% 8% 10%

<5 

 10–14 

 20–24 

 30–34 

 40–44 

 50–54 

 60–64 

 70–74 

 80–84 

Accelerated Declining Male Female Declining Male Female Growing Male Female

10% 8% 6% 4% 2% 0% 0% 2% 4% 6% 8% 10%

<5 

 10–14 

 20–24 

 30–34 

 40–44 

 50–54 

 60–64 

 70–74 

 80–84 

10% 8% 6% 4% 2% 0% 0% 2% 4% 6% 8% 10%

<5 

 10–14 

 20–24 

 30–34 

 40–44 

 50–54 

 60–64 

 70–74 

 80–84 

Metropolitan Male Female Micropolitan Male Female

U.S. Rural Counties—Distribution by Age

Chart 2
FDIC Quarterly 51 2014, Volume 8, No. 2

Rural Depopulation

in growing rural counties have a median asset size of 

$127 million, and the median metro-based community 

bank has assets of $200 million.

In addition—and this has proved critical for reasons 

detailed below—community banks headquartered in 

depopulating rural counties tend to be focused much 

more on agriculture than community banks headquartered elsewhere, particularly those headquartered in 

metro areas. The reason for this agricultural focus is 

closely linked with depopulating trends. As the agricultural sector has consolidated over the past century, 

the loss of employment in that sector, together with the 

absence of other employment possibilities in any other 

Plains and the Corn Belt have 835 community banks 

headquartered in depopulating rural counties (both 

declining and accelerated declining), or 78 percent of 

all such community banks in the nation. In addition, 

the two regions account for 339 of the nation’s 442 

community banks that are headquartered in accelerated 

declining counties.

Table 4 also shows that the asset sizes of community 

banks headquartered in depopulating rural counties 

tend to be relatively small. Community banks headquartered in declining or accelerated declining rural 

counties have median asset sizes of $88 million and $84 

million, respectively. Community banks headquartered 

More Than 1,000 Community Banks Are Headquartered in Depopulating Rural Counties

Number and Assets of Community Banks by County Type

Region

Rural

Growing Declining Micropolitan Metropolitan Total

Accelerated 

Declining

Great Plains

Number of Institutions 47 227 166 185 211 836

Total Assets ($ billions) 6.4 30.8 17.7 41.2 78.5 174.6

Median Assets ($ millions) 112.8 73.6 62.9 140.9 153.9 99.7

Corn Belt

Number of Institutions 240 269 173 527 1,135 2,344

Total Assets ($ billions) 38.3 34.2 21.7 112.5 349.9 556.7

Median Assets ($ millions) 113.5 87.9 80.1 130.9 152.2 125.3

Delta-South

Number of Institutions 122 41 65 175 296 699

Total Assets ($ billions) 22.9 8.8 12.7 51.5 94.7 190.5

Median Assets ($ millions) 139.5 135.6 113.8 186.8 172.4 160.0

Appalachia-East

Number of Institutions 50 21 4 74 282 431

Total Assets ($ billions) 19.4 4.1 0.8 28.3 186.5 239.1

Median Assets ($ millions) 226.6 124.7 199.3 205.1 305.4 258.3

Other

Number of Institutions 307 64 34 336 1,493 2,234

Total Assets ($ billions) 58.2 9.8 7.5 101.6 681.1 858.2

Median Assets ($ millions) 127.0 110.3 126.6 196.2 238.8 204.5

U.S. Total

Number of Institutions 766 622 442 1,297 3,417 6,544

Total Assets ($ billions) 145.3 87.6 60.4 335.2 1,390.5 2,019.1

Median Assets ($ millions) 126.7 88.0 84.0 153.9 199.9 155.2

Sources: FDIC Call Reports (year-end 2012), 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county 

classifications.

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). ‘Other’ category includes American Samoa, Federated States of Micronesia, Guam, 

Commonwealth of the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands.

Table 4
FDIC Quarterly 52 2014, Volume 8, No. 2

Community Banking Study.

12 At year-end 2012, nearly 

half of all community banks headquartered in depopulating rural counties specialized in agriculture, followed 

closely by community banks that had no lending 

specialty. Less than 4 percent of community banks in 

depopulating rural areas specialized in CRE lending. 

Not surprisingly, few community banks in metro areas 

specialized in agriculture, but a much higher proportion 

specialized in CRE lending. Even growing rural areas 

had relatively few community banks that specialized in 

agricultural lending; instead, half of the community 

banks in these counties had no lending specialty.

Financial Performance of Community Banks in 

Depopulating Rural Areas

As has been the case for decades, community banks 

headquartered in depopulating rural areas face difficulties related to their local market areas. In effect, the 

eroding size of the local customer base makes it harder 

at the margin to raise deposits and attract loan customers. This study shows that challenges to balance-sheet 

growth have continued to exist in depopulating rural 

areas, and banks that searched for deposit and loan 

growth by branching into metro areas in the first 

decade of the 21st century were adversely affected by 

12 Page 5-3 of the Study defines the lending specialty groups. Banks 

are agricultural specialists if their combined agricultural production 

loans plus loans secured by farm real estate are greater than 20 

percent of total assets. CRE specialists hold C&D loans greater than 

10 percent of total assets OR total CRE loans (C&D, multifamily, and 

secured by other commercial properties) greater than 30 percent of 

total assets.

sector, led to out-migration. In turn, the depopulation 

led to the erosion of main-street businesses and their 

commercial lending needs. For community banks in 

depopulating areas, the result has been a continuing 

shrinkage of lending options in their local markets 

apart from agricultural loans.

At year-end 2012, agricultural loans held by the 

median community bank in depopulating rural areas 

constituted 19.3 percent of total assets, while commercial real estate (CRE) loans constituted 6.6 percent, 

including 0.6 percent in construction and development (C&D) loans. Metro-based community banks 

had contrasting portfolios, with a median 0.4 percent 

in agricultural loans and 26.3 percent in CRE loans, 

including 3.1 percent in C&D loans. At year-end 

2007 (when the recession started), the contrast 

between the holdings of community banks in the two 

types of areas had been even more pronounced, when 

metro-based community banks had medians of 29.8 

and 7.6 percent of their assets in total CRE and C&D 

loans, respectively. At that time, the median community bank in depopulating rural areas had 7.8 percent 

of its total assets in CRE loans, including 0.9 percent 

in C&D loans.

Another way to look at the differences in lending 

between community banks headquartered in different 

types of areas is to look at the lending specialty of the 

institutions. Table 5 depicts the lending specialty 

groups of community banks as defined in the FDIC 

Community Banks in Depopulating Rural Areas Tend To Be Agricultural Lending Specialists

Lending Specialty

Number of Community Banks by County Type and Lending Specialty

Rural

Growing Declining Micropolitan Metropolitan Total

Accelerated 

Declining

Mortgage Lending 134 29 22 218 637 1,040

Other Consumer Lending 3 4 0 6 29 42

Commercial RE Lending 71 18 22 162 1,199 1,472

C&I Lending 10 7 4 24 96 141

Agricultural Lending 86 285 215 198 148 932

Multi Specialty Lending 80 33 28 157 435 733

No Lending Specialty 382 246 151 532 873 2,184

Total 766 622 442 1,297 3,417 6,544

Sources: FDIC Call Reports (year-end 2012), 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county 

classifications.

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). Lending specialty as defined in the FDIC Community Banking Study (2012).

Table 5
FDIC Quarterly 53 2014, Volume 8, No. 2

Rural Depopulation

and 2005, community banks in depopulating rural areas 

generally had much lower rates of growth in total 

assets, loans, and deposits than their counterparts in 

metro, micro, or growing rural counties (see Table 6). 

Starting in 2006, however, asset growth rates increased 

in depopulating rural areas in keeping with the strength 

in the agricultural sector, while weakening in other 

areas. As a result, from 2006 through 2012 community 

banks in depopulating rural areas posted higher asset 

growth rates than community banks elsewhere. Asset 

growth was accompanied by strong deposit growth, 

since farmers looked to place their high earnings into 

their local institutions. The downside, though, was that 

these earnings led farmers to reduce their borrowing 

the recession, just as metro-based banks were. Financial 

performance as measured by earnings and asset quality 

was actually stronger in depopulating rural areas than in 

metro areas because the agricultural sector—on which 

so many rural community banks depended, as described 

earlier—was strong during and following the overall 

U.S. recession. For details on the strength in the agricultural sector, see inset box above.

The Challenge of Balance-Sheet Growth

In keeping with the gradual decline in their local 

customer base, community banks headquartered in 

depopulating rural areas have historically had challenges in growing their balance sheets. Between 1991 

For many rural community banks, specialization in agricultural lending had unexpectedly beneficial results for 

the better part of the past decade. Historically the agricultural sector has been relatively volatile, with a downside risk that was clear in the 1980s, when the sector 

propelled hundreds of rural farm banks to failure. 

Currently, however, the agricultural sector is in the 

midst of a prolonged period of unusual strength. Annual 

U.S. net farm income, perhaps the best measure of the 

sector’s strength, averaged $63.7 billion from 1990 

through 2003. From 2004 through 2012, annual U.S. net 

farm income averaged $84.5 billion per year. This nineyear period includes six of the top ten annual net farm 

income figures since 1960 (see Chart I.B.1). The 2013 

forecast of $123 billion would also be among the top 

years in the past half century.

Much of the strength in net farm income is attributable to 

unusually high prices for corn, soybeans, and wheat—key 

crops in the Great Plains and Corn Belt. The average 

price of corn was 59 percent higher from 2007 through 

2012 than it had been from 1990 through 2006. Comparable price increases for wheat and soybeans over the same 

two periods were 53 percent and 45 percent, respectively.

In addition, the U.S. recession in 2008 and 2009 (as 

noted above) appeared to have little adverse effect on 

the agricultural sector. In fact, 2008 was among the ten 

best years for U.S. net farm income since 1960. This 

success came at a time when many metro and micro 

areas were being hit hard by job losses, especially in the 

construction industry.

Unusual Strength in the Agricultural Sector

Source: USDA’s Economic Research Service, inflation-adjusted 

figures using 2009 dollars.

Chart I.B.1

The Decade 2002–2012 Was Marked by Historically Strong Net Farm Incomes

U.S. Net Farm Income, Billions of Dollars

Constant Dollars (2009=100)

Source: USDA/ERS.

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012

Dark-Blue Bars Indicate the 10 Highest

Net Farm Incomes Since 1960

2013 Forecast
FDIC Quarterly 54 2014, Volume 8, No. 2

As of year-end 2000, 9.3 percent of community banks 

headquartered in depopulating rural areas operated 

branches in metro areas. By year-end 2007, the percentage had risen to 17.5. This branching strategy led to 

higher growth rates for these institutions. During the 

seven-year period from year-end 2000 through year-end 

2007, community banks headquartered in depopulating 

rural areas that had at least one metro branch grew total 

assets by 6.6 percent per year and loans by 8.2 percent 

per year on a merger-adjusted basis. These growth rates 

were approximately twice the rates experienced by 

community banks headquartered in depopulating rural 

areas that did not have metro branches.

In achieving this growth, however, community banks 

with metro branches took on many of the lending characteristics of metro banks. From 2000 through 2007, 

while rural community banks without metro branches 

maintained high levels of agricultural loans and low 

levels of CRE and C&D loans, their counterparts with 

metro bank branches had significantly more exposure to 

CRE and C&D loans (see Table 7).

As a result, when the U.S. economy went into recession and the quality of many CRE and C&D loans was 

adversely affected, rural community banks with metro 

branches reported asset quality and earnings performance that was more in line with that of metro banks 

than with that of other rural banks (see Chart 3). 

Past-due loan rates, loan losses, and provision expenses 

rose sharply, following the trend observed for metrobased community banks. The number of rural community banks with metro branches reporting annual net 

requirements, so that loan growth rates at community 

banks in depopulating rural areas dropped to under 2 

percent in 2011 and 2012.13

It is unclear how long community banks in depopulating rural areas will continue to have a growth advantage over community banks elsewhere. It is probably 

not reasonable to assume that the agricultural sector 

will continue indefinitely to enjoy the exceptionally 

strong conditions of recent years. Should farm earnings 

return to their normal level, most likely the banks that 

operate in rural areas will see their growth rates revert 

to levels more in line with historical norms. At the 

same time, as the overall economy continues to recover 

from the recession, metro-based community banks 

should see their growth rates improve.

Branching Strategies

Before the recession, some community banks in depopulating rural areas adopted various strategies to offset 

the effects of local population declines and to achieve 

higher rates of balance-sheet growth. One such strategy 

was to branch into metro areas where population and 

economic activity were growing faster than in the 

banks’ local areas. But with such a strategy came the 

associated risks of managing a branch not only in a new 

geography but also, in many cases, with a corresponding 

shift in lending focus.

13 There may be other factors that also contributed to lower loan 

demand at these institutions, but the unusually strong cash positions 

of farmers was the most common reason cited by bankers at meetings 

with FDIC regulators and during their examinations.

Table 6

Balance-Sheet Growth in Depopulating Rural Counties Has Been Bolstered in Recent Years

Median Annualized Total Asset, Total Loan, and Total Deposit Growth Rates of Community Banks by Type of County, 1991–2012 (Percent)

County Type

Total Assets Total Loans Total Deposits*

1991– 

1995 

1996– 

2000

2001– 

2005

2006– 

2010

2011– 

2012

1991– 

1995

1996– 

2000

2001– 

2005

2006– 

2010

2011– 

2012

1991– 

1995

1996– 

2000

2001– 

2005

2006– 

2010

2011– 

2012

Metropolitan 5.07 7.84 7.44 4.56 2.90 5.68 10.42 8.24 4.17 -0.10 4.38 6.76 7.12 4.94 3.20

Micropolitan 4.33 5.83 5.16 4.32 3.72 6.33 8.57 5.54 3.53 0.33 3.69 4.99 5.00 4.76 4.04

Rural: 

Growing 4.73 6.23 4.97 4.14 3.13 6.59 9.39 5.17 3.44 -0.79 4.27 5.49 4.85 4.47 3.36

Declining 2.60 3.91 3.42 4.61 5.76 6.15 6.75 4.39 4.22 1.86 2.12 3.30 3.24 5.02 6.06

Accelerated 

Declining 2.86 4.09 3.30 4.67 5.54 6.05 6.70 3.91 3.82 1.46 2.52 3.46 3.11 5.10 5.72

Sources: FDIC Call Reports, 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical area county classifications.

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). Growth rates are merger-adjusted.

* Significant changes in FDIC deposit insurance coverage occurred during the 2006–2010 and 2011–2012 periods. 
FDIC Quarterly 55 2014, Volume 8, No. 2

Rural Depopulation

was in a tight range of 1.42 percent to 1.56 percent. 

These earnings were bolstered by low and stable loan 

loss provision expenses for all groups studied. Levels of 

noncurrent loans and net loan losses were low in all 

groups, particularly in community banks headquartered 

in metro areas.

From 2006 through 2010, the financial performance of 

community banks began to vary depending on the type 

of area in which the bank was headquartered. Most 

noticeable was the deterioration in earnings and asset 

quality reported by community banks located in metro 

areas. In the five years between 2006 and 2010, metrobased community banks earned, on average, a full 

percentage point less per year than they had in the prior 

five-year period. These institutions also reported large 

spikes in provision expenses and in levels of noncurrent 

loans and leases: Between 2006 and 2010, both of these 

measures were more than three times what they had 

been between 2001 and 2005.

During the same period, community banks based in 

micro areas and growing rural areas fared somewhat 

better than metro banks, but their earnings and asset 

quality were still weaker than they had been between 

2001 and 2005. The institutions based in micro and in 

growing rural areas reported declines in annual pretax 

ROA of 62 and 57 basis points, respectively, compared 

with the 2001 through 2005 period. As in metro-based 

losses also increased, but not quite to the level seen at 

community banks in metro areas.

In addition, the operation of metro-area branches had a 

negative effect on the failure rates of community banks 

headquartered in depopulating rural areas. Between 

2000 and year-end 2012, of all community banks headquartered in such areas, 3.65 percent of those with 

metro branches failed, compared with 0.98 percent of 

those without metro branches.

Earnings and Asset Quality

Despite the demographic challenges in their local areas, 

community banks headquartered in depopulating rural 

counties reported relatively strong earnings and asset 

quality between 2001 and 2012, even through the U.S. 

recession. By contrast, community banks located in 

areas with increasing populations, such as metro areas, 

reported substantial deterioration in earnings and asset 

quality during the recession and had still not recovered 

fully at year-end 2012. This finding that banking performance has diverged from depopulation trends may be 

striking, but the explanation is simple.

In the early 2000s, community banks in both growing 

and depopulating areas were solidly profitable and had 

strong asset quality (see Table 8). Pretax return on 

assets (ROA) of community banks across geographies 

Table 7

Community Banks in Depopulating Rural Areas That Had Metro Branches 

Took on More CRE and C&D Loans Between 2000 and 2007

Banks Headquartered in:

(Percent)

2000 2007 2012

Metropolitan Areas

CRE Loans to Total Assets 16.82 22.30 24.65

C&D Loans to Total Assets 5.08 12.85 4.04

Ag Loans to Total Loans 1.88 2.01 2.02

Depopulating Rural With Branches in Metro Areas

CRE Loans to Total Assets 11.44 17.25 17.00

C&D Loans to Total Assets 2.57 7.83 3.51

Ag Loans to Total Loans 12.43 14.50 15.99

Depopulating Rural Without Branches in Metro Areas

CRE Loans to Total Assets 6.23 8.74 7.95

C&D Loans to Total Assets 0.94 2.21 1.03

Ag Loans to Total Loans 21.95 22.94 22.33

Source: FDIC Call Reports.

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). CRE loans are exclusive of C&D loans (which are shown separately). Ag loans are loans 

for agricultural production and loans secured by farmland. All ratios are weighted averages for the time periods shown.
FDIC Quarterly 56 2014, Volume 8, No. 2

Community Banks in Depopulating Rural Areas With Metro Branches Showed Deterioration During the Recession

Noncurrent Loan and Lease Ratio Loan and Lease Net Charge-Off Rate

0.00

0.50

1.00

1.50

2.00

2.50

2000 2002 2004 2006 2008 2010 2012

Percent (median)

2000 2002 2004 2006 2008 2010 2012

Percent (median)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Loan and Lease Loss Provision Expense to Average Assets Share of Institutions That Are Unprofitable

2000 2002 2004 2006 2008 2010 2012

Percent (median)

2000 2002 2004 2006 2008 2010 2012

Percent (median)

Source: FDIC Call Reports.

Note: Charts reflect only community banks as defined in the FDIC Community Banking Study (2012).

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

Depopulating rural without metropolitan branches

Depopulating rural with metropolitan branches

Metropolitan area

0

5

10

15

20

25

30

35

40

45

Chart 3

Table 8

The Financial Performance of Community Banks in Depopulating Rural Areas 

Remained Solid Through the U.S. Recession

County Type

Pretax Return on Assets 

(Percent)

Provision Expense to Average 

Assets (Percent)

Total Noncurrent Loans to Total 

Loans (Percent)

2001– 

2005

2006– 

2010 2011 2012

2001– 

2005

2006– 

2010 2011 2012

2001– 

2005

2006– 

2010 2011 2012

Metropolitan 1.49 0.46 0.65 1.01 0.22 0.73 0.61 0.35 0.74 2.55 3.33 2.62

Micropolitan 1.49 0.87 0.89 1.12 0.24 0.55 0.51 0.31 0.87 1.93 2.57 2.05

Rural: 

Growing 1.56 0.99 0.88 1.11 0.24 0.45 0.50 0.32 0.96 1.88 2.76 2.21

Declining 1.45 1.08 1.04 1.17 0.21 0.39 0.35 0.24 1.04 1.64 1.95 1.51

Accelerated 

Declining 1.42 1.13 1.23 1.41 0.25 0.40 0.32 0.22 1.13 1.45 1.59 1.35

Source: FDIC Call Reports.

Notes: Table reflects only community banks as defined in the FDIC Community Banking Study (2012). All ratios are weighted averages for the period shown.
FDIC Quarterly 57 2014, Volume 8, No. 2

Rural Depopulation

Number of Community Bank Charters in Rural Areas 

Compared With Metro Areas

Consolidation has been a long-term trend in the U.S. 

banking industry. The number of federally insured 

bank and thrift charters has declined steadily for 

almost three decades, from just under 18,000 in 1984 

to fewer than 7,000 in 2012. In concert with this 

trend, the number of community bank charters in 

depopulating rural areas has declined steadily since 

1984 (see Table 9). At year-end 1984, there were 

2,477 total charters in depopulating rural areas, more 

than 96 percent of which were community banks. By 

the end of 2012, total charters in these areas had 

declined to 1,074, and 99 percent (all but 10) were 

community banks. During the 28 years between 1984 

and 2012, the number of community banks in depopulating rural areas had declined by 55 percent.

Though depopulation is likely one of many factors that 

drove long-term consolidation of charters in rural areas, 

consolidation rates were even higher in metro and 

micro areas of the country.14 In metro areas, the number 

of community bank charters declined by 60 percent 

between 1984 and 2012, and in micro areas, it declined 

by 58 percent. Only growing rural areas showed less 

consolidation (slightly less) than depopulating rural 

areas, with a 54 percent reduction in charters between 

1984 and 2012.

14 See page 2-2 of the Study for other factors that have influenced 

consolidation rates among community banks since the mid-1980s.

community banks, higher provision expenses drove a 

large part of this earnings decline. In addition, between 

2006 and 2010 noncurrent loan levels in the institutions based in micro and growing rural areas were 

approximately twice what they had been between 2001 

and 2005.

In contrast, community banks headquartered in depopulating rural areas found the latter half of the 2000s to 

be much less difficult. These institutions reported only 

modest declines in average ROA—declines of between 

29 and 37 basis points annually, when 2006 through 

2010 is compared with 2001 through 2005. When the 

2006–2010 performance of community banks headquartered in depopulating rural areas is compared not with 

these banks’ own previous performance but with the 

2006–2010 performance of metro-based community 

banks, the comparison is starkly in favor of the banks 

in the depopulating areas: The average pretax ROA 

reported by community banks in depopulating rural 

areas was more than 60 basis points higher than that of 

their metro-based counterparts. In 2011 and 2012, this 

gap closed somewhat, though by no means completely, 

as community banks in depopulating rural areas still 

reported higher earnings than metro community banks. 

Of all community banks, between 2006 and 2010 those 

in depopulating rural areas also reported the lowest 

increases in provision expenses and in levels of noncurrent loans. This trend continued in 2011 and 2012.

Since 2006, much of the disparity in performance 

between community banks located in depopulating 

rural areas and those located in metro areas can be 

explained by the differences in the loan mix of the 

two groups (loan mix as of year-end 2012 was surveyed 

above, at the end of the “Characteristics” section). 

Community banks operating in depopulating rural 

counties relied substantially more on agricultural lending and had lower holdings of CRE loans, and this mix 

translated directly into lower loan losses during the 

recession. From 2001 through 2006, virtually every type 

of loan had performed well, but beginning in 2007 

several loan types, particularly C&D loans, had begun 

to show significant deterioration (see Chart 4). The 

noncurrent rate for C&D loans at community banks 

overall peaked at 13.4 percent in 2009, and at year-end 

2012 was still an elevated 7.9 percent. By 2009, CRE, 

residential, and commercial and industrial loans also 

showed substantial increases in noncurrent rates. The 

noncurrent rate of agricultural loans, however, 

remained low throughout the recession.

CRE Loans, Particularly C&D Loans, 

Deteriorated Substantially Beginning in 2007

0

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

C&D

Other CRE

1-4 Family Residential

C&I

Agricultural

Noncurrent Loans as a Percent of Total Loans in Category

Source: FDIC Call Reports.

Notes: Chart reflects only community banks as defined in the FDIC Community Banking 

Study (2012).

Noncurrent loans are loans 90 days or more past due or on nonaccrual status. 

Ratios are weighted averages. 

Chart 4
FDIC Quarterly 58 2014, Volume 8, No. 2

Part III

Looking Ahead: Some Positive Trends but Continued 

Challenges

When the FDIC conducted the prior study in 2004, 

continued depopulation of much of America’s rural 

areas seemed to be inevitable, as many of these areas, 

particularly in the Great Plains, were caught in a slow, 

self-reinforcing circle of decline. Population trends 

have, in fact, worsened since 2000: Not only are depopulation trends now covering more of the country than 

they did in 2000, but also in many areas the depopulation is accelerating.

Despite these adverse trends, as of early 2014 there are 

a few favorable developments affecting population flows 

in pockets of rural America. Most significant is the 

advent of the energy extraction of shale oil and natural 

gas in parts of the rural depopulating Great Plains and 

Appalachia-East regions. This exploration activity 

Continued depopulation raises the possibility that 

consolidation rates may increase in rural depopulating 

areas. Depopulation can make it more challenging to 

staff and manage bank branches and back-office facilities. Moreover, many small banks in rural areas are 

owned and operated by one or two key people, and the 

children of these executives, who perhaps would have 

been the successors to management, often move away 

to pursue opportunities in larger towns and cities. In 

such cases, if there are neither clear options within the 

institution for succession nor viable professional candidates within the community, successorship may become 

a concern.

The possible solution is to recruit talent from metro 

areas, but that can be hard to accomplish. At outreach 

meetings with FDIC staff, rural bankers have noted 

various challenges in bringing talented individuals into 

rural areas.

Table 9

Consolidation of Charters Has Occurred Since 1984, 

but Has Been Less Pronounced in Rural Counties

County and Bank Type

Number of Charters by Period Number by Period as Percent of 1984 Total

1984 1990 2000 2010 2012 1984 1990 2000 2010 2012

Metropolitan

Community Banks 8,569 7,175 4,566 3,723 3,417 100% 84% 53% 43% 40%

Noncommunity Banks 1,758 1,580 916 543 453 100% 90% 52% 31% 26%

Total 10,327 8,755 5,482 4,266 3,870 100% 85% 53% 41% 37%

Micropolitan

Community Banks 3,053 2,498 1,756 1,371 1,297 100% 82% 58% 45% 42%

Noncommunity Banks 271 261 116 63 51 100% 96% 43% 23% 19%

Total 3,324 2,759 1,872 1,434 1,348 100% 83% 56% 43% 41%

Rural 

Growing

Community Banks 1,651 1,448 1,048 809 766 100% 88% 63% 49% 46%

Noncommunity Banks 122 106 41 22 25 100% 87% 34% 18% 20%

 Total 1,773 1,554 1,089 831 791 100% 88% 61% 47% 45%

Declining

Community Banks 1,423 1,194 856 654 622 100% 84% 60% 46% 44%

Noncommunity Banks 54 42 9 8 5 100% 78% 17% 15% 9%

Total 1,477 1,236 865 662 627 100% 84% 59% 45% 42%

Accelerated Declining

Community Banks 967 836 590 459 442 100% 86% 61% 47% 46%

Noncommunity Banks 33 18 6 6 5 100% 55% 18% 18% 15%

Total 1,000 854 596 465 447 100% 85% 60% 47% 45%

Sources: FDIC Call Reports, 2010 U.S. Census Population compared with 1980 U.S. Census Population, and 2010 OMB Metropolitan and Micropolitan Statistical Area county classifications.

Note: Community banks as defined in the FDIC Community Banking Study (2012).
FDIC Quarterly 59 2014, Volume 8, No. 2

Rural Depopulation

The data brought to bear in this study indicate that 

community bankers in depopulating rural areas will 

most likely have to continue managing their institutions with the prospect of weak or negative growth from 

their local communities. Although searching for growth 

opportunities in other geographies is possible, it has its 

own set of challenges, as seen by the institutions that 

branched into metro areas before the recession. All in 

all, the conclusion of the 2004 FDIC study is equally 

applicable to this study: Although there may in fact be 

far fewer rural banks in the future, the rural banking 

system will most likely remain intact and strong.

Authors: John M. Anderlik, Assistant Director

Division of Insurance and Research

Richard D. Cofer Jr., Regional Manager

Division of Insurance and Research

The authors would like to thank Stephanie A. Brockmann 

for her contributions to this article. 

requires significant manpower, and some of these areas 

have seen large increases in population. An example is 

western North Dakota, a part of the Great Plains that is 

heavily rural and has long been sparsely populated and 

depopulating, yet has seen a great deal of energy extraction over the past decade. Exploration for additional 

suitable oil fields is under way across much of the rest of 

the western Great Plains, from Montana through Oklahoma. While it remains to be seen how many rural 

counties ultimately gain population because of these 

exploration activities, in some rural areas energy drilling 

represents perhaps the most promising economic development in decades.

On a much smaller scale, positive population trends 

may be developing in some areas. Two limited-scope 

studies indicate that a few rural areas may be seeing 

positive net in-migration of adults of child-rearing age 

together with their children.15 However, the inflows 

were very modest and the causes apparently idiosyncratic. And although positive, they are not sufficiently 

large or widespread to reverse the “pinched-waist” 

patterns observed in rural-county age pyramids overall.

The positive trends found in energy extraction and 

other developments do provide some optimism for rural 

areas, but the likelihood of a large-scale reversal in rural 

depopulation trends seems remote. The population 

outflows are well entrenched and in many areas date 

back a century or more.

Still, community banks in depopulating rural areas have 

been resilient in meeting the challenges posed by difficult demographic trends. In the years leading up to the 

financial crisis and recession, community banks in 

depopulating rural areas reported earnings and asset 

quality performance that was relatively similar to the 

performance of banks located in more economically 

vibrant areas. Through the recession and its aftermath, 

the community banks in depopulating rural areas 

outperformed their peers, thanks to the strong agricultural economy, which kept agricultural loan portfolios 

from feeling the adverse shocks received by C&D and 

CRE portfolios. Even the banking structure in depopulating rural areas has been more stable than in metro 

areas in terms of the number of charters.

15 Ben Winchester, Tobias Spanier, and Art Nash, “The Glass Half-Full: 

A New View of Rural Minnesota,” Rural Minnesota Journal 6 (2011); 

and Cheryl Burkhart-Kriesel, Randolph Cantrell, Bruce Johnson, 

Charlotte Narjes, and Rebecca Vogt, Newcomers to the Nebraska 

Panhandle: Who Are They? (Center for Applied Rural Innovation: 

University of Nebraska-Lincoln, 2007).