The banking industry had a tumultuous year in 2023, with failures at Silicon Valley Bank and peers like First Republic Bank making it the most chaotic since the 2008 financial crisis. However, some small community banks, such as City Holding Co., parent company of West Virginia’s City National Bank, barely felt the impact of the chaos. With $6.2 billion in assets, City National Bank is based in Charleston, West Virginia, a region known for coal production. Despite the state’s declining population, president and CEO Skip Hageboeck sees this as an asset, as major banks do not invest much in the region, allowing City National Bank to steadily increase its market share.
Focused primarily on retail banking rather than catering to businesses, City National Bank has only 17.5% of its $5.1 billion in deposits uninsured, compared to the 41% average for all U.S. banks. This focus on retail banking has proven to be a successful strategy for the bank, as they have been able to attract and retain customers in West Virginia and surrounding areas in Virginia, Ohio, and Kentucky. This strategy has helped City National Bank thrive while larger banks struggled.
One key factor in City National Bank’s success is its commitment to reinvesting in the communities it serves. By focusing on meeting the needs of individual customers and small businesses, the bank has built strong relationships and loyalty among its client base. This approach has helped the bank weather the storm of financial turmoil in 2023 and emerge as a strong and stable institution in the banking industry.
The success of City National Bank and other community banks like it highlights the importance of local banking institutions in serving the needs of communities that are often overlooked by larger banks. By focusing on retail banking and reinvesting in local economies, these banks are able to thrive even in challenging times. As the banking industry continues to evolve, the resilience and adaptability of community banks will be essential in ensuring the stability and growth of the banking sector as a whole.
While larger banks may struggle to compete in certain regions, community banks like City National Bank have a unique opportunity to fill the gap and provide essential financial services to local residents and businesses. By prioritizing customer service and community investment, these banks are able to establish themselves as trusted institutions that can weather economic uncertainty and provide stability in volatile times. As the banking industry faces ongoing challenges and changes, the role of community banks in supporting local economies and fostering financial health will only continue to grow in importance.
