July 18, 2024
The Great Consolidation: Community Banking Decline in Greater Philadelphia provides a detailed regional analysis and offers strategies that can be employed to offset the negative effects of the Great Consolidation.
Community banks are assets to the communities they serve and vital resources for consumers and small businesses throughout the country, as well as across Greater Philadelphia. They play important roles in commercial real estate and mortgage lending. Community banks prioritize their relationship with the borrower when making decisions about loans, which differs from larger banks who leverage algorithms and objective measures that lack nuance and local context.
Unfortunately, the number of community banks is in decline due to a national shift in the banking sector known as the “Great Consolidation,” which describes the ongoing trend of bank mergers, acquisitions, and closures. Nationally, between 2012 and 2019, community banks decreased from 6,802 to 4,750, or over 30 percent, and in Greater Philadelphia, the number of community banks declined by 39 percent from 106 in 2012 to 65 in 2022.
DVRPC’s recent report, The Great Consolidation: Community Banking Decline in Greater Philadelphia, provides a detailed regional analysis of this trend, as well as 11 local strategies that can be employed to offset the negative effects of the Great Consolidation. These strategies range from physical realm interventions, such as zoning changes and adaptive reuse policies, to municipal lending programs and bank formation, which aim to increase access to capital.
To discuss the details of this report further, contact Spencer Gober, Manager in the Office of Community and Economic Development, at sgober@dvrpc.org.