Communities are built on their small businesses, homes and schools — but none of that would be possible without the support of strong community banks.
“Community banks are the ones that are going to have their finger on the pulse of the needs of the area,” said Jason Tennant, president and chief lending officer at CS Bank, based in Eureka Springs.
“We really are the heartbeat. We know what’s going on in our communities and we’re always there to help,” said Alex Maynard, president of the commercial bank division at Farmers and Merchants Bank, headquartered in Stuttgart.
Alex Maynard
Community banks and the communities in which they exist share a truly symbiotic relationships.
“I am a believer that if you have healthy banks in your market, that means your economy is healthy and your community is healthy,” Tennant said.
“At its core, community banking is about more than moving money — it connects local capital with local opportunity. When local families and businesses succeed, the bank benefits, and when the bank responsibly invests in its customers, the broader community has a better opportunity to grow,” said Keith Collard, president and CEO at First Arkansas Bank & Trust, based in Jacksonville.
Keith Collard
Some of community banks’ largest contributions include providing loans, lines of credit and financial guidance to local businesses and financing local growth by helping members buy homes, purchase farm equipment and open businesses.
Tennant said even though there are other community banks in the Carroll County area that compete with CS Bank, he is happy that there are so many banks that are connected to the community and its history.
“We’ve watched the town grow and change,” he said. “We’ve been here a long time, and you develop that relationship with the people.”
Being connected to the communities they serve is a tenet of the small-town banks. These institutions work to be available for their customers when they have questions and issues and make sure they offer speedy answers when it comes to lending decisions.
“By knowing our people and our communities, we know how to serve them best, and we’re able to do that a little more efficiently and without so much red tape,” Maynard said.
Even though there tends to be fewer regulatory hurdles placed on smaller banks than large ones, the banks still have to work with regulation imposed by the government.
Jason Tennant
“Some regulation is not bad, but overregulation gets to be very burdensome on the banking industry and slows down the process of people getting access to money,” Maynard said.
One bill that Tennant believes is good news for banking and lenders is the ROAD to Housing Act, which became law in July and was championed by Rep. French Hill.
“Homeowernship should be within reach for more Americans, and this law moves us closer to that goal. This bill reduces unnecessary barriers to building, strengthens community banks and ensures families — not institutional investors — have a fair shot at buying a home,” Hill said in a press release.
“It’s getting harder and harder [to buy a home], especially for first-time home buyers,” Tennant said.
The bill will not only be beneficial for those in the community who want to own a home but also for the community as a whole, he said.
“The more homeowners you have, that is stabilizing your community and your schools,” he said. “People raise families and put down roots and housing is usually their largest investment, so it helps build financial strength, as well.”
Along with legislation changes, another set of challenges to small banks comes in the form of rapidly changing technology, including mobile banking apps, artificial intelligence and even nonbank money apps such as Venmo adding to the competition.
“Customer expectations are rising,” Collard said. “Customers increasingly expect the convenience they receive from large national banks and fintech companies.”
“It’s going to be harder and harder to compete,” Tennant said. “We have to change with the times.”
Tennant said apps such as Venmo and Cash App keep liquidity out of the banks as people keep their money in the apps instead, which can hurt the banks. He said he expects usage of the apps to increase in coming years.
“The younger the customer base gets, the more comfortable they are with all these apps,” he said. “As long as that can function and is speedy and easy to use, banks have to keep up with the technology and say, ‘Hey, we offer that too.’”
Maynard said community banks are going to have to start embracing AI more, as well, to keep up with larger competitors.
“We’re starting to figure out ways to use it,” he said. “It’s definitely not going to be a people replacer but a people enhancer.”
“Technology also affects employees and operations,” Collard said. “New banking technology can automate processes, reduce repetitive work, improve access to information and allow employees to serve customers more efficiently.”
However, he added that implementation matters and that employees need strong training, internal systems, support and understanding of what new technologies are coming their way to make the technology successful.
“For FAB&T, the opportunity is to combine banking technology with the relationship-based services of a community bank,” Collard said. “The goal isn’t to become a technology company; it’s to make banking easier and more convenient while preserving the personal relationships that differentiate FAB&T.”
However, while embracing and keeping up with technology can have a lot of positive impacts on community banks, it has also increased fraud and fraudsters are getting better at using tools such as AI to scam customers.
“Fraud is of grave concern for the financial industry, period, not just banks,” Tennant said.
However, Tennant is optimistic that banks will be able to keep customers protected.
“There is more time spent on fraud today than there has ever been,” he said. “I think the bank industry is as apt to fight it as anybody and equipped to do so.”
The increased use of technology and mobile banking may eliminate some face-to-face interaction between customers and bankers, but that does not mean they will lose the personal touch.
“In an industry that increasingly treats people like a number,” Maynard said, “we treat our customers and employees as individuals.”
Local banks’ work even goes beyond helping customers with their financial needs. The banks often invest in or volunteer with local schools, nonprofits and more.
Collard emphasized that a larger role of a community bank is being there for its people through difficult times.
“When a business experiences a downturn or a community faces an economic disruption, an established relationship with a local banker can make it easier to have a conversation about options,” Collard said.
Despite the challenges facing community banks, the leaders agreed that their banks are still strong and are an integral part of the areas they live in.
“Community banking is alive and well in Arkansas,” Tennant said. “I think people support community banks and appreciate the community banks. There is a need to keep community banking strong and alive.”
SEE THE FEATURE BELOW AND IN OUR SEPTEMBER 2026 ISSUE OF ARKANSAS MONEY & POLITICS
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