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Community banks in the US have two main characteristics. They are small in size and do most of their business in the community they are located in. Very few community banks are located far away from many of the customers they serve.
The community banks’ growth has exceeded expectations in the sense that they account for a very large share of all banks present in the US. However, these banks have a much smaller share of total banking activities as compared to normal banks. The reason for this is because the community banks hold a smaller share of loans and bank assets and they have limited access to non-deposit sources of funds like Federal funds, subordinate debt and repurchase agreements.
Although in the United States, community banks have a small share of total banking activities, their growth in certain communities and other parts of the country has been exponential. There is no doubt that community banks’ growth has exceeded the outlook that was prevalent earlier because they are very important in rural communities, accounting for 58 percent of all banking offices in such communities and 49 percent of all deposits. This does not mean that in big cities, community banks’ growth has not exceeded expectations. In fact, the reverse is true. In metro areas with less one million people, community banks operate 31 percent of all banking offices and control 23 percent of all deposits.
The reason why community banks’ growth has exceeded is because of the relationship-based and information-intensive banking services they provide. These services are offered to smaller customers like small businesses, family farmers and customers with low to moderate wealth.
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Community banks play a very vital role in the financial system of the United States economy. These banks, in fact, complement the role of large banks by providing relationship banking and credit to small businesses which are usually ignored by large banks. 
