Community banks are narrowing their focus to compete with national lenders. Whether it’s Oak Valley’s faith-based lending team, Five Star’s mobile home park portfolio, River City’s clean energy and public finance platform, or Tri Counties’ push into middle-market commercial real estate, the strategy is the same: build deep industry expertise, underwrite with context, and price risk with confidence.
The risk, as demonstrated by SVB, is concentration. Banks need to know whether their specialization is disciplined and diversified, or simply narrow. Either way, in a market where community banks now represent fewer than 4,000 institutions nationwide, differentiation is no longer optional.
Where does your bank have true sector expertise, not just exposure? Are your credit teams organized around industries or geographies? If your bank isn’t known for something specific, what’s your competitive edge as scale advantages accrue to larger institutions?