How Community Banks Grow Core Deposits

Every community bank CEO says they want core deposits. Cheap, sticky, relationship money that funds the loan book without chasing rate. What almost nobody talks about is how unevenly that money is actually flowing.

We pulled quarterly call report data for every active FDIC-insured bank between $100M and $2B in assets, 3,110 institutions, and measured deposit growth from Q1 2023 to Q1 2026.¹ The median bank grew 11.5% over three years. That number is boring. What sits around it is not.

The spread nobody publishes

Out of 3,099 banks with a full three years of data:

• 569 banks, about 18%, ended the period with fewer deposits than they started with.
• 406 banks, about 13%, were basically flat, under 5% growth across three full years.
• 563 banks, about 18%, grew 30% or more.

By the numbers

18.4%

of community banks shrank deposits over the last three years.

Read that again. Nearly a fifth of community banks are shrinking while a different fifth grows at ten times the pace of the flat middle. These banks operate in the same rate environment, face the same megabank and fintech competition, and file the same call reports. The difference is not the market. The difference is the bank.

Size helps, but less than you would think. The median bank between $500M and $2B grew 13.9%. The median bank under $500M grew 10.0%. Four points of median difference is real, but it is nothing next to the 49-point spread between the top and bottom deciles inside the band. Small banks show up among the fast growers. Billion-dollar banks show up among the shrinking.

By the numbers

49 pts

separate the top tenth of banks from the bottom tenth on three-year deposit growth.

So the honest question is not whether community banks can grow deposits. A fifth of them clearly can, quickly. The question is what separates them.

What the growers do differently

We are careful here, because this is where most bank marketing content starts making things up. Call reports tell you what happened to deposits. They do not tell you why. What follows is what we see in the market, stated as observation rather than proof.

They made opening an account not hurt. The single most visible difference between fast-growing and shrinking banks is what happens when a new customer clicks "open an account." At many community banks that click leads to a branch locator, a phone number, or a PDF. Meanwhile the megabanks and the neobanks a customer compares you against open an account on a phone in minutes. A depositor who was ready to switch and hit a wall did not become a branch visit. They became a Chase customer. This is fixable, and the vendors who fix it are now priced for community banks.

They market to a defined somebody. The shrinking banks tend to market to everyone within driving distance, which in practice means no one. The growers pick a lane: the ag operators in three counties, the medical practices in one metro, small business operating accounts, and build product, content, and calling effort around that lane. Focused deposits come with the relationship attached, which is what makes them core rather than hot.

They treat rate as a tactic, not a strategy. Paying up for money works instantly and builds nothing. Rate-shopped deposits leave the way they came. The banks growing durably use promotional rate as a door, then move fast to make the account primary: direct deposit, bill pay, the operating relationship. A high-rate CD without a checking relationship attached is a lease, not a deposit.

They show up where the decision happens. Deposit decisions increasingly start with a search or a question typed into a phone, not a drive past a branch. The banks winning younger households and small businesses are findable and legible online: clear product pages, real rates published, a straight answer to "can I open this account today." The ones losing share are often invisible at the exact moment a mover is choosing.

None of this is exotic. That is sort of the point. The 18% that grew 30%+ did not discover a secret. They removed the reasons a willing customer bounces.

What this data cannot tell you

This is a descriptive analysis of public data, not a controlled study. A few honest limits:

• Growth is not automatically good. Some of the fastest growers bought it with rate or acquired it, and some shrinking banks are shrinking on purpose, running off expensive money. The call report does not distinguish.
• We measured total deposits, not a strict core definition. Brokered and wholesale funding is in these numbers for some banks.
• We have not yet tested, at scale, whether any specific marketing capability correlates with growth. That is the next study on this site, and we will publish the method along with the result so you can argue with both.

We would rather tell you what the data does not prove than stretch it. You will see that habit throughout this site.

Where to start if you are on the wrong side of the spread

If your bank sits in the shrinking or flat cohorts, the order of operations that we see work:

1. Fix the front door first. If a new customer cannot open your flagship checking account online, on a phone, that is the constraint. Nothing you spend on marketing outruns it.
2. Pick the lane. Decide which two or three customer segments the next $50M of deposits comes from, and say no to marketing that is not aimed at them.
3. Publish your rates and your answers. Be the bank whose website actually answers the questions a switcher asks.
4. Then, and only then, spend on demand. Media aimed at a broken account-opening flow is money spent sending customers to a wall.

Methodology

Deposit figures come from the FDIC BankFind Suite API, which publishes quarterly call report data for every insured institution. We took all active banks with total assets between $100M and $2B as of Q1 2026 (3,110 institutions), pulled total deposits for the quarters ending March 31, 2023 and March 31, 2026, and computed three-year growth for the 3,099 banks with data at both endpoints. Percentile and cohort figures are computed on that set. The data is public and free. If you want to replicate or challenge any number here, the API is at banks.data.fdic.gov and we will happily compare notes.