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How do U.S local/regional banks stay afloat?

K

kyrax12

Platinum Member
So the big four baddie banks that I know of: Wells Fargo, Chase, Bank of America, Citibank are obviously the most popular in the U.S.


I never even considered or heard of regional banks until I seen some while driving.

What are their competitive advantage over the big four banks?
 
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The real question is how does Radio Shack survive?

No one knows how they're making money, not even themselves.
 
I don't do business with the big banks...nor the regional/local banks. I've done my "banking" with my credit unions for decades.
 
highland145 said:
They have CHEAP $$ to lend.
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Corrected that to note that they are not only paying nearly nothing on their customer deposits, they are charging more and more fees. It's to the point, it would be more economical to keep your money under the mattress than to keep it in a bank when the near ZERO interest and fees are added in.

As for the Radio Shack reference, I have no idea how they survive. When I was growing up, it was the place to go to get stuff to tinker with. Now, they have little in the stores to tinker with and really have no idea how they stay open, especially with the cellphone companies having their own stores and the big box electronic stores around them everywhere.
 
kyrax12 said:
What are their competitive advantage over the big four banks?
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From what I have seen they often offer lower fees or account minimums and higher interest rates but may offer fewer services and have a much smaller network (atms/branches)

I am generally pleased with my local bank and get a higher interest rate on my checking and savings account than the those 4 offer but I still have a chase account for nation wide and international access
 
Engineer said:
Corrected that to note that they are not only paying nearly nothing on their customer deposits, they are charging more and more fees. It's to the point, it would be more economical to keep your money under the mattress than to keep it in a bank when the near ZERO interest and fees are added in.
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Three words = high-interest checking accounts (note the plural because you can't put a lot of money in, I think the most I can put in one account is $30K, most are about $10 to $15K).

I know you have to do things such as x amount of debit usage per month and electronic statement only but 2.5% to 4.11 interesting paying accounts are not bad in this low rate environment.
 
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Svnla said:
Three words = high-interest checking accounts (note the plural because you can't put a lot of money in, I think the most I can put in one account is $30K, most are about $10 to $15K).

I know you have to do things such as x amount of debit usage per month and electronic statement only but 2.5% to 4.11 interesting paying accounts are not bad in this low rate environment.
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I get more back from using my credit card rewards than I would from high interest checking and the hoops needed to jump through to get them.

I've got most of my longer term cash stored in 3% CD's right now anyway and might put some into a 7 year CD that I just saw that is tied to Prime - 3.25% with a 3.00% floor and and a 7.5% ceiling.
 
Engineer said:
I get more back from using my credit card rewards than I would from high interest checking and the hoops needed to jump through to get them.

I've got most of my longer term cash stored in 3% CD's right now anyway and might put some into a 7 year CD that I just saw that is tied to Prime - 3.25% with a 3.00% floor and and a 7.5% ceiling.
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The most I can get from day to day usage cashback from CCs is 2%, the 5% is only for special rotating categories per quarter and most of them I could/would not use.

CDs? Wow, been a while that I use them. You know the banks can revoke the high paying CDs anytime, right? That's what happened to me with WaMu and a few other banks right after the start of the recession. Bastards closed the accounts and returned my money even I want to continue with the CD accounts.
 
Svnla said:
The most I can get from day to day usage cashback from CCs is 2%, the 5% is only for special rotating categories per quarter and most of them I could/would not use.

CDs? Wow, been a while that I use them. You know the banks can revoke the high paying CDs anytime, right? That's what happened to me with WaMu and a few other banks right after the start of the recession. Bastards closed the accounts and returned my money even I want to continue with the CD accounts.
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I know that they can but I'm using credit unions and they RARELY do anything like that, especially ones like Penfed, Navy Federal, etc. I had 5% CD's through Penfed through the first several years of the recession. When rates dropped sub 2%, my 5% CD's kept right on going to maturity. I love Penfed!

Besides, most of the smaller regional banks are less likely to do that than the big bastards mentioned above. I can't stand several of them especially Bank of America.
 
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Engineer said:
I get more back from using my credit card rewards than I would from high interest checking and the hoops needed to jump through to get them.
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exactly - 12 debit card transactions per month just to get the higher interest? i haven't used my debit card for a purchase in 10 years.
 
brianmanahan said:
exactly - 12 debit card transactions per month just to get the higher interest? i haven't used my debit card for a purchase in 10 years.
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Not to mention that it's just easier to deal with fraud on the credit card level than it is on the debit card level.
 
 
The real question is why are people still using the super sized national banks?

We switched to a Credit Union, PenFed, and get better rates and service has been better as well.
 
My bank is a regional bank. They survive by making sound business decisions. Even through all the subprime mortgage crap they stuck to their original lending standards and they came out of it stronger than ever. Personally I love dealing with a bank that has a guy there in charge of loans who literally remembers loaning me money through the years and seeing me make every payment on time. A guy like that will help you as long as you don't make him regret it. You dont get that from massive banks.
 
brianmanahan said:
exactly - 12 debit card transactions per month just to get the higher interest? i haven't used my debit card for a purchase in 10 years.
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You complain about 12? 😀

How about 76 per month for my multiple high paying checking accounts. Don't worry. I do not run around town and swipe my debit cards 76 times. Just have to be smart how to use them. Have my own system how to handle mutilple debit card usage. ()🙂

Engineer said:
I know that they can but I'm using credit unions and they RARELY do anything like that, especially ones like Penfed, Navy Federal, etc. I had 5% CD's through Penfed through the first several years of the recession. When rates dropped sub 2%, my 5% CD's kept right on going to maturity. I love Penfed!

Besides, most of the smaller regional banks are less likely to do that than the big bastards mentioned above. I can't stand several of them especially Bank of America.
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I do hear good things about PenFed, maybe I will use them next year.

Speaking of BoA, they took over my old 2% cash back everyday CC from Schwab. Now, only 1% CB on everyday, 2% on groceries, and 3% on gas. At least no annual fee, yet. Bastard.
 
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