Community banking is experiencing a resurgence in Texas, as residents increasingly prioritize local relationships over large, national institutions.
According to a recent report by the Texas Bankers Association, community banks, defined as institutions with less than $10 billion in assets, have seen a 15% growth in deposits over the past year. This trend is particularly evident in small towns and suburban areas, where local banks are capitalizing on their personalized service.
In Tyler, Texas, First State Bank has reported a record year, with deposits rising by 20% in 2025. Bank President Linda Montgomery attributes this growth to the bank's commitment to community engagement. "We focus on building relationships with our customers, understanding their needs, and providing tailored solutions," she stated. "In a world dominated by large banks, we’ve found that our community-first approach resonates with our clients.”
The shift towards community banking has been further fueled by the economic uncertainty brought on by rising interest rates and inflation. Many Texans are seeking the stability and personalized service that local banks provide. This trend is echoed in another report which found that 62% of respondents prefer community banks for their lower fees and accessibility.
In Lubbock, South Plains Bank has launched a campaign encouraging residents to "bank local." The initiative aims to raise awareness about the benefits of supporting community banks, including the reinvestment of deposits into local businesses and projects.
"Our mission is to strengthen the local economy by keeping financial resources within the community," said Bank CEO Michael Wright. "When our customers deposit their money with us, they know it’s going back into their neighborhoods in the form of loans and support for local businesses.”
As the preference for community banking continues, industry experts predict that this trend will further reshape the banking sector in Texas. The resilience of community banks is a testament to their ability to adapt and serve the needs of their clients in a challenging economic climate.
Looking forward, community banks are expected to continue gaining market share, particularly among younger demographics who value personalized service and community involvement. With the right strategies in place, these institutions are poised for growth in the coming years.