When a business enterprise goes out of business, the cause is often associated with inefficiency, inability, or unwillingness to serve customers, uncompetitive pricing and other economic and environmental factors. Are these factors involved in the decline in the number of community banks in the last decade? Is the decline in community banks associated with their unwillingness to lend to their customers? Are they guilty of charging exorbitant above-market rates of interest? Do they lack a willingness to serve their markets? It is doubtful that any of these conditions have contributed to the decline in the number of community banks. So why are their numbers declining?
Interviews with a substantial number of community bank CEO’s who are merging their banks in response to questions regarding their plans simply respond “I am tired. This is not fun anymore.” Further questioning uncovers the heavy burden of time and costs related to regulations from all agencies. Because of these regulations the bankers feel unable to serve their customers and to return to their stockholders a satisfactory yield on their investments, and they are tired of trying.
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