Once you are able to build up your earning assets, community banks do very well in their particular niche. This is a seemingly small percentage but is significant when considering all the mergers that have taken place since 1985. This shows that community banks are doing a superb job holding onto their customers and attracting new ones. The fallout of the mergers is being swept up by the community banks. Of course, large banks with numerous branches are not the only competition in town.
Banks now compete with credit unions for loans.
And the money that once upon a time would have been placed in a savings account often goes into a mutual fund or an insurance policy. Despite all these contenders for a consumer's dollars, community banks thrive because they have managed to carve an important niche for themselves. North Sound Bank has six branches scattered throughout the Olympic Peninsula. The Silverdale branch is vying for customers with 22 other financial institutions and 14 banks, thrifts, and credit unions compete with the Poulsbo branch, says Mike Clementz, president of North Sound Bank. Other branches in Port Angeles, Port Townsend, Bainbridge Island and Sequim all face competition too.