Last week’s sale of Hyde Park Bank & Trust. Co’s parent company is the latest example of community banks losing ground in a market dominated by multinationals with ATMs on every street corner and online banking. But as Crain's reported, what's interesting about the Hyde Park Bank sale is that they actually weren't suffering too much financially.
What drove the sale then? The bank wasn't sure they could continue to lend to community members. “The environment for banks like ours is just incredibly difficult,” said CEO Timothy Goodsell. “And we don't see things getting better anytime soon . . . We could certainly continue to make money and move forward. We just felt our shareholders, employees and customers probably would be better off paired with a larger bank.”
As you can see from the map below, Chicago actually has a bevy of community banks. In fact, Illinois as a whole has more community banks than any other state in the nation because of the remaining legacy of regulatory decisions made about 30 years ago. Illinois was one of the last states to allow branching -- where one bank opens multiple locations -- so everyone who wanted a new bank location would have to literally start another bank. "As a result, we had a lot more bankers," said Crain's senior reporter Steve Daniels. "As consolidation swept banking in the 1980s and 90s, you’d have bankers out starting new banks, after they were consolidating. Chicago, as a result, has many more local banks."
For some in the modern age, banking locally can make them feel good, but comes with a host of problems.
A few notes about the map below: for ease of use, we've lumped banks by color that have more than 3 branches so you can see the community banks and their reach. The rest are all in blue; click around to see the names and locations of the banks. By our count, there are over forty community banks in Cook County, but reportedly around 300 in the greater Chicago metropolitan area; the former are displayed below. The information comes from a list provided by The Community Bankers Association of Illinois. (Not all local banks are members of CBAI).