Community banks fund nearly 60% of the nation's small business loans and more than 80% of agricultural loans — and they do it with a model that hasn't changed in its essentials for decades: take in local deposits, reinvest them locally, and make lending decisions based on relationships, not algorithms. April is Community Banking Month, and while the designation comes from the Independent Community Bankers of America (ICBA), the substance behind it shows up every month in towns like Glencoe, Chaska, Waconia, Cambridge, and across the Twin Cities metro.
At Security Bank & Trust Co., we've spent over 90 years building a bank that reflects that model — and the results speak for themselves. But this isn't a post about handing out trophies. It's about why the community banking model still matters in 2026, what the data says, and what Minnesota business owners, families, and farmers should look for in a banking relationship.
The Numbers Behind Community Banking in 2026
Community banking isn't a nostalgic idea. It's a high-performing segment of the financial system, and the latest data backs that up.
According to the FDIC's most recent quarterly reports, community banks nationally saw 8.5% growth in net income in 2025, alongside roughly 5% growth in both loan balances and domestic deposits. Credit conditions are loosening for the first time in years: the Federal Reserve's Senior Loan Officer Survey from January 2026 showed the smallest net tightening of small business lending standards since early 2022. Loan demand from small businesses hit its strongest reading in two years during the fourth quarter of 2025. And for the first time since 2021, more banks increased their small business loan size limits than reduced them.
That's a meaningful shift. After several years of tighter underwriting across the industry, the lending environment is opening up — and community banks are positioned to move quickly because their decision-making structures are local, not layered through regional committees and corporate approval chains.
For Minnesota businesses, this matters. Whether you're a construction firm in Carver County looking to finance equipment, a professional services company in the Twin Cities exploring an acquisition, or a multigenerational farm operation in McLeod County structuring a succession plan, the lending decisions that shape your business are made faster and with more context when your banker knows your operation.
What Makes Community Banks Different — and Why It's Not Just a Slogan
The phrase "relationship banking" gets used so often it risks losing its meaning. Here's what it actually looks like in practice.
When a business owner walks into a community bank to discuss a loan, they're typically sitting across from someone who has authority to make — or significantly influence — the credit decision. That banker has likely seen the borrower's financials over multiple years, knows the local market conditions, and understands the specific dynamics of the industry. The FDIC's Small Business Lending Survey found that community bank lending remains overwhelmingly a staff-driven, in-person process: only about 3% of community banks have fully automated any part of small business underwriting, and most borrowers are located within 40 miles of a branch.
Compare that to a national bank, where a loan application may pass through several layers of review by people who have never visited your market, don't know your competitors, and evaluate your business against national benchmarks that may not reflect conditions on the ground in Minnesota. That's not a knock on large banks — it's a structural difference in how decisions get made. And for business owners who need speed, flexibility, and a lender who understands the nuances of their situation, that structure matters.
Community banks also recirculate capital locally. Deposits gathered in Glencoe fund loans in Isanti. Deposits from Hennepin County support agricultural lending in Sibley County. The economic multiplier effect is real: community bank lending directly supports local tax bases, municipal infrastructure, school districts, and nonprofits. When you bank locally, your money stays in the communities you live and work in.
Where SBTC Fits In
Security Bank & Trust Co. is a $1.3 billion community bank headquartered in Glencoe, Minnesota, with 21 locations across McLeod, Carver, Hennepin, Ramsey, Anoka, Sibley, and Isanti Counties. We've grown through five acquisitions, most recently the 2024 merger with Flagship Bank Minnesota, and we serve a diverse mix of business owners, agricultural operators, municipalities, nonprofits, and families.
The external recognition has been consistent. In 2025, Twin Cities Business Magazine named SBTC the Gold Winner for Best Business Bank in Minnesota, along with Bronze recognition in both commercial lending and wealth management. Newsweek awarded SBTC a 5-star rating in its America's Best Regional Banks & Credit Unions list for both 2025 and 2026. GOBankingRates ranked us among the top three banks in Minnesota. And the Minnesota Bankers Association has recognized SBTC as a Community Champion multiple years running.
Those awards reflect something specific: a bank that's operationally disciplined, financially strong, and embedded in the communities it serves. Our Trust & Wealth Management division manages over $566 million in assets and continues to grow. Our agricultural lending team understands the operating realities of Minnesota farming — from commodity price exposure to equipment financing to generational land transfers. Our commercial lending group has deep experience in construction, real estate, professional services, and business acquisitions.
If you're a Minnesota business owner evaluating your banking relationship — or a family thinking about estate planning and trust structures — the question isn't just who offers the best rate. It's who will be there when the deal gets complicated, when the market shifts, or when you need a banker who picks up the phone and actually knows your name.
How to Evaluate Whether Your Bank Is Working for You
Community Banking Month is a good moment to take stock. If you're currently banking with a larger institution — or even a community bank that doesn't feel like the right fit — here are the questions worth asking.
Does your banker know your business well enough to spot problems before you bring them up? Can you get a lending decision in days rather than weeks? When you call the bank, do you reach someone who knows your account, or do you start from scratch every time? Is your bank actively investing in the communities where you operate — sponsoring local organizations, supporting municipal infrastructure, showing up at the events that matter to your employees and customers?
These aren't abstract questions. They're the practical differences that show up when you need a business loan structured quickly, when you're navigating a complex real estate transaction, or when you need a treasury management solution that actually fits how your business moves money. For a deeper look at what separates community banks from larger institutions, take a look at our post on what sets community banks apart.
The Bottom Line
Community banks aren't a relic. They're the backbone of local economies, and the 2026 data shows they're growing, lending, and outperforming in the metrics that matter most to the businesses and families they serve.
At Security Bank & Trust Co., we don't celebrate Community Banking Month because it's on the calendar. We celebrate it because it's what we do every day — in Glencoe, in St. Louis Park, in Cambridge, in Chaska, and across Minnesota. If you're looking for a banking partner who makes decisions locally, invests in your community, and treats your business like it matters, we'd welcome the conversation. Reach out to our lending team — we'd be glad to talk.
Frequently Asked Questions
What is Community Banking Month? Community Banking Month is observed every April and is promoted by the Independent Community Bankers of America (ICBA). It highlights the role community banks play in supporting local economies, small businesses, agricultural operations, and families through relationship-driven banking.
Why do community banks matter for small businesses? Community banks originate nearly 60% of all small business loans and more than 80% of agricultural loans nationally. Their lending decisions are made locally, typically by bankers who know the borrower's business and market — which means faster approvals and financing structures that reflect real-world conditions.
How is Security Bank & Trust Co. different from a large national bank? SBTC is a $1.3 billion community bank headquartered in Minnesota with 21 locations. Lending decisions are made locally, not routed through distant corporate offices. The bank has earned Gold recognition as Minnesota's Best Business Bank, a 5-star Newsweek rating, and consistent recognition as a Minnesota Bankers Association Community Champion.
What areas does Security Bank & Trust Co. serve? SBTC serves McLeod, Carver, Hennepin, Ramsey, Anoka, Sibley, and Isanti Counties across 21 branch locations in Greater Minnesota and the Twin Cities metro area.
How can I start a conversation with SBTC about my business banking needs? Visit our lender contact page to connect directly with a banker, or explore our business loan guide to learn about the financing options available to Minnesota businesses.
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