4/01/26
By Jessica Henley, Chief Marketing and Communications Officer, First Southwest Bank
Across the country, community banks are doing work that larger financial institutions often can’t or won’t do. According to the ICBA, community banks provide more than 60% of small-business loans nationwide, and over 80% of the banking industry’s agricultural loans. For a region like the San Luis Valley, where agriculture and small businesses form the backbone of the local economy, those numbers carry real weight.
What makes a community bank different isn’t just its size, it’s its model. Community banks are built on relationships. When a local business owner walks through the door, they’re not a credit score and a file number. They’re a neighbor. A lender who knows the borrower’s history, understands the local economy, and has a personal stake in the community’s success is going to make different decisions than an algorithm halfway across the country.
This matters in measurable ways. The Federal Reserve’s 2025 Report on Employer Firms found that satisfaction among small business borrowers is highest at community banks, outpacing both online lenders and large national banks. This reflects the investment that community bankers make in understanding the people they serve.
One finding that’s hard to ignore in this year’s Community Banking Month data is this: community banks are the only physical banking presence in one in three U.S. counties. In rural America, that fact is daily reality.
When larger banks close rural branches, as they have increasingly done over the past two decades, it is community banks that remain. They remain not because it’s always the easiest business decision, but because the community is the mission. Deposits made locally tend to stay local, reinvested in the form of loans to farms, small businesses, and families in the same ZIP codes.
Some community banks, like First Southwest Bank, carry an additional designation that deepens their commitment to underserved communities: Community Development Financial Institution, or CDFI. This certification, granted by the U.S. Department of the Treasury, recognizes institutions that direct a significant portion of their lending to low-income individuals, small businesses, and communities that conventional lenders have historically bypassed.
CDFI-designated banks can access federal and state resources that allow them to offer low interest rates on loans for affordable housing, agriculture, and small business development, tools that can be genuinely transformative for a rural entrepreneur who might otherwise find conventional credit out of reach.
In Colorado, there are only two CDFI-designated banks. That scarcity underscores how important these institutions are to the communities fortunate enough to have them nearby.
There is also a ripple effect from local lending. It is worth taking a minute to consider what a single community bank loan can set in motion. A small business loan to a local contractor means a new hire. A loan to a farmer means another season of operation. A loan to a nonprofit building a childcare center means working parents can hold jobs, and their children get early education. None of these outcomes show up on a national bank’s quarterly earnings call, but they shape the character and resilience of a community for generations.
The San Luis Valley offers a great example of this ripple effect. The region’s six rural counties have long been officially designated as a Child Care Desert, with an estimated 4,000 young children in need of quality care. That shortage doesn’t just affect families, it constrains the economic potential of an entire region, limiting workforce participation and holding back local businesses that struggle to recruit and retain employees without reliable childcare options. Creative, mission-driven financing that addresses gaps like this one can do what conventional lending alone cannot: unlock opportunity across an entire community. (Read more about our work with the Boys and Girls Club of the San Luis Valley in our 2025 Impact Report here.)
Community banks also invest in their communities beyond lending. They sponsor local events, serve on nonprofit boards, teach financial literacy, and mentor small business owners navigating their first loan application. This kind of local presence is difficult to quantify but impossible to replace.
Community Banking Month is a good moment for anyone who cares about their community and rural economic health to reflect on where they bank and why. Choosing a local institution isn’t just a personal finance decision. It is a small but meaningful act of investment in the place you live.