Community Bank Growth Model

The importance of community banks is critical to the future of small towns as they are the ones who often help to finance new entrepreneurs and fund the community wide projects that can help to differentiate a town. The continuing consolidation taking place in the banking industry is a major risk for many communities.

Capitol Bancorp has developed a very unique “franchising” model for the development of community banks. I was at another of their regional meetings in Henderson, NV, sharing my message of the paradigm shift in economic development toward the growth of entrepreneurs in our communities.

Capitol just opened their 50th bank in the USA this past month, with plans to grow to 100 in the next five years. They have new banks planned in small towns in OR, CA, NC and NY in the next six months.

They call themselves “The largest small bank company in America.” But, their results and stock price is anything but small time. Their stock has climbed from $14/share in 2001 to over $45 today. Out of the 270 public banks in the USA they are one of only five that has a net interest margin of greater than 5%, ROA >1% and ROE >13%.

Keep your eye on the growth of this very unique community bank.