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People Are Amazed When They Learn This About Their Hometown Bank

As banks continue to find new ways to offer customers convenient online services, it can be easy to lose track of the differences between financial institutions. You may spend less time in the lobby of a bank, but that doesn’t mean that a bank’s physical location is irrelevant.

In many ways, where a bank is located is more important than it has ever been. Why? Here are three amazing facts about hometown banks that you may not have known.

The money you borrow is from your neighbors (and the money they borrow is from you).

This one is an eye opener. Rarely do we think about where the money on our home or vehicle loan comes from. When you work with your hometown bank, however, it’s a question with an incredibly simple answer.

“For the most part, a hometown bank leverages its local deposits to make its local loans,” says Matt Beneda, a lender at First United Bank in Park River and Grafton, North Dakota. “In other words, the money you put into the bank is used right there at home to help your neighbor or a local business borrow money to get things they need.”

In fact, this is the root of how banks got their start – neighbors helping neighbors. Institutions that have branches across the country simply do not have the ability to maintain this “we’re all in this together” approach in each of the towns and cities they serve.

If your bank’s headquarters is far away, lending decisions are usually made far away as well.

It sounds strange, but at large corporate banks individual loan officers have little to do with decisions about who qualifies and who doesn’t qualify for a loan. Of course, there are certain guidelines that all banks follow, but in the end there is a decision to be made – and where that decision is being made can have a big impact on your ability to borrow money to buy things like a home or machinery for your farm.

Interestingly, some large institutions are relying more and more heavily on technology to help them make lending decisions. Hometown banks don’t shy away from technology either, but it is balanced with the instincts of local bankers who often live in the same town as the borrower. They see them at local events. They wave when they meet them on the road. The best lending decisions are made when all parties know each other, and that rarely happens anymore at large national banks.

Local banks support local businesses, organizations and charities.

Working with a hometown bank is just the first part of a chain reaction that forms the foundation of local economies, especially rural ones. Local businesses need help to navigate the unpredictable nature of these hometown economies, and that help most often comes from a bank they consider a partner.

“Your local bank wants to see every local business succeed,” says Beneda. “When those businesses succeed, everybody benefits, from their customers to local schools to area nonprofits. The more dollars that stay in the community, the healthier that community remains – period.” 

Once again, it’s the idea of neighbors working together for the greater good. Hometown banks are able to support local communities because local communities support hometown banks. It’s a financial ecosystem that has evolved over time but remains fundamentally the same as it was more than 100 years ago when rural banks got their start.

The tools that hometown banks use may be increasingly digital, but the relationships that keep them strong are decidedly analog. If you’re interested in learning more about how local banks keep communities strong, contact your local First United Bank or visit

First United Bank has locations in Park River, Grafton, Adams, Michigan, Hoople, Crystal, Aneta, Cooperstown, Sharon and Petersburg, North Dakota.

Member FDIC. Equal Housing Lender.