Community bank growth rates are likely to improve in relation to larger institutions.

• Position: MARKETING NEWS

GROWTH RATES FOR COMMUNITY BANKS are likely to improve in comparison to those of noncommunity banks over the next several years, according to the recently released FDIC Community Banking Study.

Such a shift could help mitigate the disparity in growth rates between metropolitan and nonmetropolitan areas that has limited the growth potential of community banks, the study notes.

While community banks are more prevalent in nonmetropolitan areas, they lag in size and growth relative to noncommunity banks. Nonmetropol-itan regions accounted for 16 percent of the U.S. population in 2011, but only 12 percent of economic output. "These disparities in population and growth have not necessarily hurt the financial performance of community banks that operate in nonmetro areas," the study says.

Both community and noncommunity banks headquartered in non-metropolitan areas outperformed their counterparts headquartered in metro areas on the basis of pre-tax return on assets (ROA) for the study period. Where community banks lagged was in the area of growth. Banks headquartered in metro areas in 2011 that also operated in 1984 grew more than twice as fast over that interval as similar banks headquartered in nonmetro...