2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

of market share (Holmes). FirstBank in Fairview holds 64% of the deposit market share (Blade). In Paris, FirstBank is ranked third highest in deposits in its market and FirstBank in Memphis has more than doubled its market share in the last five years (“Each Depositor Insured”). FirstBank competes for customers by providing exceptional service and value. Buttrey stated, “At FirstBank, [the customer] is somebody, not just a number.” Each customer who walks through the FirstBank door is known by name and treated in the highest regard. Each FirstBank market faces location-specific challenges. In the Fairview market, the challenge is continuing to grow beyond the 64% market share (Blade). The Paris market faces competition from rate battles and also from the smaller banks with fewer regulatory requirements (Buttrey). To compete with single-branch banks, Buttrey strives to provide the most valuable service because FirstBank does not consistently have the lowest loan rates in Paris. FirstBank in Memphis is challenged with the sheer size of the market, but sees great opportunity to grow. FirstBank is highly concentrated in commercial business in Memphis because it currently does not have enough branches to compete with the national bank presence in the metropolitan area (Hudson). FirstBank’s shortage of branches in Memphis hinders its impact within the market, but provides avenues for expansion. As evidenced previously, FirstBank is faced with constraints from not only regulation, but also competition from banks of all sizes within the relative markets. Regulatory relief will allow

Each customer who walks through the FirstBank door is known by name and treated in the highest regard.

B. Community Banks vs. Credit Unions and Farm Credit Services Tim Johnson and Laurie Durham believe there is a disadvantage for community banks in competition with local credit unions and Farm Credit Services. Credit unions and Farm Credit Services have tax advantages and fewer regulatory obligations, thus, making it difficult for community banks to offer the same rates. Johnson believes if credit unions and Farm Credit Services incurred the same compliance expenses as community banks or community banks were given more relief from those expenses, FirstBank could offer more

competitive rates to customers. C. FirstBank’s Present Market Competition and Going Forward

FirstBank does not let the cost of compliance defeat its competitiveness within its markets and strives to be among the top banks in terms

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