De-Ruralization Helped Community Banks Weather Crash: FDIC

One of the side effects of agricultural improvements has been the steady depopulation of rural America, as young people with few local prospects move to metropolitan areas for better opportunities. Between 1980 and 2010, the population of the US increased 36%, but the population in a third of US counties fell. Losing young people in the midst of their careers wreaks havoc on local government as it struggles to maintain infrastructure, and it seems like community banks should struggle as depositors go elsewhere.

But not only have community banks in depopulating counties not struggled in recent years, they have had better performance than their peers (community banks in metropolitan areas or growing rural areas) in the years following the...