When Stacey Marmolejo was looking to expand her music school franchise several years ago, she went to the national bank where she had an account and asked to secure an expansion loan. “I thought my financials and my experience with the bank would be enough,” she says. “But the banker said he didn’t see the second location as an expansion but as an entirely new business, and as such, I needed to come up with 30% of the money needed to open the second location.”
But then, a mentor introduced Marmolejo to the concept of local and regional banks. Until then, she’d thought that “a bank is a bank,” she says. “I couldn’t have been more wrong.”
Marmolejo secured a loan with much better terms at an independent bank called the Business Bank of Minnesota, which was later acquired by a regional bank called Bell Bank (No. 1 in North Dakota)—and she never looked back. At the local bank, she enjoyed excellent rates, personalized service and lasting relationships. “My banker became another financial expert on my team,” says Marmolejo. “We talked monthly about the financials, and he had suggestions and recommendations. The support was so great that I moved my personal account to the bank, as well.”
She worked with the same three people at the bank for the 16 years she owned that business, and she still has her personal account at Bell Bank, which ranked No. 1 in North Dakota (where it’s headquartered) on our sixth annual list of the Best Banks In Each State 2023.
To create the list—in addition to our list of the Best Credit Unions in Each State 2023—Forbes partnered with market research firm Statista and surveyed approximately 31,000 U.S. residents. Participants were asked to name all the banks and credit unions where they have a checking or savings account and evaluate these institutions based on criteria such as customer service, the quality of the financial advice representatives offer and whether fees are transparent and reasonable. They were also asked about the ease of navigating the company website, on-location branch services and the overall level of trust the companies inspired. Additionally, reviews and ratings posted on Google Reviews between March 2020 and April 2023 were evaluated for each bank and credit union.
Large nationwide banks and credit unions with branches in more than 15 U.S. states—like Bank of America, JPMorgan Chase, Wells Fargo and Navy Federal Credit Union—were excluded so that the lists reflect the best of the smaller, regional institutions. Outside of the nation’s largest banks and credit unions, there are approximately 4,100 regional and community banks and nearly 4,900 credit unions.
Ultimately, 137 banks and 147 credit unions across all U.S. states made the lists, with 164 awards given to the banks and 157 awards given to the credit unions.
“Small businesses do better with regional banks because the large money center banks (the national banks) really don’t want to deal with these smaller businesses,” says Bob G. Wood, Ph.D., professor of finance at the University of South Alabama’s Mitchell College of Business. At a local or regional financial institution, however, people seeking a loan “can go in and not have to wait two weeks while it goes up the chain and comes back down—it’s so much easier,” he says.
Credit Unions Versus Banks
The credit unions that topped the rankings offer many of the same personalized benefits that local and regional banks provide but with a nonprofit model.
Case in point: Mark Ostrom—also in Minnesota—switched to Affinity Plus Federal Credit Union (No. 5 in Minnesota) years ago because he didn’t feel appreciated at his larger commercial bank since he “didn’t have seven figures in the bank,” he says. At the credit union—owned and controlled by the members who use its services—Ostrom received both financial and community support.
When he launched his nonprofit business, the Joy Collaborative, which creates enriching spaces for kids with chronic or life-limiting conditions, the representative who opened the account “not only did a great job getting us established, but has since become a personal friend and is now doing volunteer work for us,” says Ostrom. “This same person recommended us for a community grant, which we were awarded!”
The community grant, from the Affinity Plus Foundation, funded the creation of a joy room in the Transitional Healing Center in Minneapolis run by Firefighters for Healing. And the support didn’t stop there. “I knew they had our back, were actively engaged in our project and have since become a huge advocate for us,” says Ostrom.
Jennifer Bush, in California, has been banking with credit unions for most of her life and says that she loves “that they give back to the communities they are in through donations, scholarships, and education workshops and webinars.”
Beyond that, choosing a credit union has made good financial and practical sense. At Star One Credit Union in Santa Clara County (not ranked), where she currently banks, the offerings include “free, interest-paying checking accounts, lower interest rates on loans and credit cards and a more personalized approach to customer service,” she says. “Their website is great, and when I need to call them, I can get help quickly without going through a complicated phone tree.”
Sterling Nielsen, president and CEO of Mountain America Credit Union (No. 1 in Nevada and headquartered in Utah), says the core distinction between a credit union and a bank is “ownership”—and it dictates everything they do. “We’re not here to make a profit,” he says, “we’re here to improve our members’ lives.” One way the credit union is held accountable to this mission is through its volunteer board, which is made up of elected members. “Each member gets a vote whether they have $1 in deposits or a million dollars,” he says. “Their sole purpose is to represent the membership.”
A Brighter Financial Future
While the banks in our Best Banks In Each State rankings are for-profit businesses, they also emphasize bettering the lives of their customers. Capital One (No. 1 in Maryland, No. 2 in New Jersey and No. 5 in Texas), a regional bank known widely for its credit cards, “was founded on the belief that no one should be locked out of the financial system and that increasing access has the potential to improve their financial lives and that of future generations,” says Celia Karam, president of the Retail Bank at Capital One. To this end, in January 2022, Capital One eliminated overdraft and non-sufficient funds fees for customers, helping to remove barriers to financial security.
Plus, not only does Capital One offer an array of digital products, but customers also have the option to get support on the phone or in person at one of the many Capital One Cafés, which are not your typical bank branches. Customers and non-customers alike are welcome to have coffee, ask banking questions, work or simply relax. “The Cafés also serve as community hubs, where we offer free meeting spaces and nooks for community organizations, student groups and nonprofits,” says Karam.
So if you’re looking for a financial institution that offers a personal connection, customized solutions, fewer fees and a vested interest in your community, you may want to consider one of the banks or credit unions on our lists.
Or take it from Michael Johan, who banks with FirstBank (No. 3 in Colorado): “The local networks of banks and credit unions are part of the glue that binds our communities together.”
For the full list of the the Bests Banks in Each State, click here.
For the full list of the Best Credit Unions in Each State, click here.
Methodology
To create the lists of Best Banks And Credit Unions In Each State 2023, Forbes partnered with market research firm Statista for the sixth time and surveyed approximately 31,000 U.S. residents. Participants were asked to name all the banks and credit unions where they have a checking or savings account and evaluate these institutions based on criteria such as customer service, the quality of the financial advice representatives offer, whether fees are transparent and reasonable, ease of navigating the company website, on-location branch services and the overall level of trust the companies inspired.
Large nationwide banks and credit unions with branches in more than 15 U.S. states—like Bank of America, JPMorgan Chase, Wells Fargo and Navy Federal Credit Union—were excluded so that the lists reflect the best of the smaller, regional institutions. Outside of the nation’s largest banks and credit unions, there are approximately 4,100 regional and community banks and nearly 4,900 credit unions.
Online reviews and ratings posted on Google Reviews between March 2020 and April 2023 were also evaluated for each bank and credit union. These reviews and ratings accounted for 20% of the scoring, while the surveys accounted for 80%.
All told, 164 awards were given to 137 unique banks, and 157 awards were given to 147 unique credit unions across all U.S. states.
As with all Forbes lists, companies pay no fee to participate. For questions about this list, please contact listdesk (at) forbes.com.
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