Rural Depopulation's Surprising Effects on Community Banks
An FDIC report has found that rural community banks located in depopulating areas are coping with a shrinking pool of customers better than expected. Rural counties that experienced outflows lost 14.8 percent of their population on average. But community banks in those areas actually fared better, on average, than banks in metro areas. Unusually strong performance in the agricultural sector beginning in 2006 resulted in community banks in depopulating rural areas posting higher asset growth rates than community banks elsewhere from 2006 through 2012. Asset growth was accompanied by strong deposit growth as farmers placed their high earnings into their local institutions.