Almost everyone uses a bank, or credit union, except for people who prefer to stuff their money in the mattress or bury it in their backyard. Not all banks are the same, however, as some are locally owned and others — the bigger ones, often — are headquartered elsewhere, usually out of state.

Most individuals may not care too much what their bank offers; basic needs are a checking account, savings account (hopefully one that grows with each paycheck) and maybe a credit card or a mortgage.

Businesses may need more, like a line of credit and increased personal attention.

“We put a lot more focus on the local community and we try to find niches the big banks don’t see or want,” said Stockmens Bank CEO and President Rob Alexander. “A big bank doesn’t want to do a loan for a rancher in Limon, because there aren’t enough of them. They want to do credit cards because 200 million people want a credit card. They look at everything as market share. They want volume, baby.”

All banks attempt to excel at customer service and to satisfy the various needs of their customers, but that’s become increasingly important for smaller banks that are fighting to survive in a financial climate that includes increased costly regulations and expensive software.

Jason Doyle is community bank president for UMB Bank in Colorado Springs. UMB, headquartered in the Kansas City area, has $20 billion in assets, making it a mid-sized bank, Doyle said.

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“I think it’s getting tougher for small banks, just with regulation, with compliance, because you have to hire those positions to deal with compliance,” Doyle said. “That’s a large growing segment of our bank, hiring those positions. But those are non-revenue producing positions.

“You take a smaller bank that’s one or two locations, and they have to decide whether to hire someone in sales or a commercial lender or someone to serve their customers, or do they hire someone who works in a back office that never sees customers but has to handle compliance.

“Large banks can absorb that cost of compliance, but small banks might have a hard time absorbing that.”

So how do small banks survive, especially when larger banks are often buying them up, like when UMB bought Marquette Financial Companies’ 13 branches in Dallas and Phoenix in 2015, adding $1 billion in assets to UMB’s ledger?

“You just have to get your customer-facing associates to really perform,” Doyle said. “They have to increase their portfolios, increase their customers because your expenses are increasing, so it can be a tough road ahead if you’re not bringing in new business.”

Alexander knows that all too well. He’s growing his bank from about $114 million to nearly $330 million with the acquisition of First Home Bank of Mountain Grove, Mo., and its bank holding company.

Alexander says a small bank will need $500 million in assets to survive a decade from now.

Alexander, a Cheyenne Mountain High School graduate, also provided some historical background.

“The state of Colorado was the last state in the Union to have interstate banking,” he said. “It was the early 1990s, and we were the last state to make you have a Colorado charter to do business in Colorado. Within two years, big national banks were buying big Colorado banks, and the number of banks in the state was shrinking.”

That led to a resurgence for smaller banks, Alexander said.

“Independent bankers had a good run then because a lot of people wanted to know their local banker,” he said. “They wanted to go to church together, drink beer together. And some little banks opened up.”

The banking failures a decade ago led to fewer banks.

“If you look back to the early 1990s, you had almost 18,000 banks in the United States,” said Peoples Bank CEO and President Brendan Zahl. “Today there are just over 6,500. So that’s been the M.O. for two decades. It accelerated during the Great Recession as a lot of banks failed and they were consumed as a part of [the Federal Deposit Insurance Corp.] assist.”

Peoples was recently bought by National Bank Holding Company out of Greenwood Village in Denver. Pikes Peak National Bank agreed in May to be purchased by Antoun Sehnaoui, a 44-year-old Lebanese banker and businessman. Midland States Bank closed its doors in the Springs after the Illinois-based bank bought another bank closer to home and shifted its assets there.

Big banks swallowing smaller banks is an alarming trend, Alexander said.

“And it’s a trend,” Zahl said, “that isn’t going away.”

Editor’s note: Read more about small banks’ struggle for survival in the Banking Quarterly Focus in the July 28 Business Journal.