(Opinion) Banking locally drives our local economy

Making deposits at local banks means more money being reinvested in your community

 FINANCIAL

By:  JAMES BRANNEN AND KRISTY MERRILL

Did you know that banking locally literally drives our local economy — to benefit you, your friends, neighbors and businesses large and small? For every dollar a customer deposits into a bank in New Hampshire, 99 cents is reinvested into our local communities — the highest level in the country, according to the Federal Deposit Insurance Corporation (FDIC).

Those deposits are reinvested through loans — whether residential mortgages, business loans or consumer loans made to support the needs of local businesses, neighbors and friends. This has a multiplying effect, resulting in growing our local economy. Banks are required to lend in the markets they serve, and are examined on those metrics regularly. Importantly, this is not true of all financial investments.

Local economist Brian Gottlob of Polecon Research recently studied banks’ impact on the Granite State’s economy and the dramatic multiplying effect created by banks in New Hampshire.

But first let’s be clear on who we are talking about, as the word “bank” is used often. The study looked at banks with FDIC deposit insurance and a physical presence, doing business in New Hampshire — this means large national banks, regional banks, out-of-state banks and our New Hampshire-based banks.

We’re fortunate to have a diverse banking industry available to customers. In addition to the variety of bank sizes, New Hampshire is home to many mutual banks, which are owned by their depositors, as well as stock banks that have shareholders and are publicly traded or privately held.

This diversity is key in supporting our economy because they each play a unique role in supporting its different components — whether they serve small, medium- or large-sized businesses with specialties in different areas, such as real estate development, nonprofits, the medical industry. And let’s face it, when we have healthy competition and a range of options to choose from, customers benefit from banks seeking to earn their business.

Access to credit

The Polecon study shows that in 2024, banks in New Hampshire provided $40 billion in lending, with $619 million going to small businesses to help them expand their companies, invest in equipment, or other improvements or hire more people. To put this number in context, according to the U.S. Bureau of Economic Analysis, New Hampshire’s GDP was $124 billion in the second quarter of 2025, meaning lending by banks in New Hampshire is roughly one-third the size of the state’s overall GDP.

Residential mortgage lending

Over $2 billion of the $40 billion lending figure was a result of home mortgage lending, through 7,820 mortgage loans. We all agree that the housing environment is challenging for potential homeowners, especially young adults and first-time homebuyers. It’s notable that for home mortgage applicants under the age of 35 applying for home mortgages, they saw 69% approval rates by banks when compared to other financial institutions at 54%.

Employment and earnings

Polecon Research further reports over $1 billion in earnings directly, indirectly or induced by banks in New Hampshire with over 17,260 jobs. Some 4,500 workers, paying over $500 million in employee compensation and benefits, are from direct employment by banks.

Tax revenues and charitable contributions

Banks in New Hampshire are taxpaying entities and pay millions of dollars annually in state, local and federal taxes. They play a prominent role in supporting our state’s roads and bridges and statewide and local infrastructure. Polecon Research reviewed the impact from direct payment of taxes by banks, along with the indirect and induced tax impacts of banking industry operations. They found that the banking industry contributed an estimated $127 million in state and local taxes in 2024.

Beyond being taxpaying entities, banks are good corporate citizens, regularly committing employee hours and providing generous financial contributions to local civic and nonprofit organizations. Many banks encourage employees to volunteer or even offer paid time off in this pursuit. Conservatively, through our own industry survey, we found that banks contributed $15 million in total sponsorships, cash, in-kind donations and volunteer hours to Granite State Causes in 2025. This is just one more layer of local community investment and support.

What does all this data on the banking industry mean? Depositing your dollars in banks in New Hampshire matters! Unique to any other industry, banks provide access to credit by lending customer deposits to our neighbors and local businesses, leading to job growth, increased tax revenue and expanding our local economy. So, before you make your next deposit, ask yourself, where is your money going?

James Brannen is CEO of First Seacoast Bank and chair of the NH Bankers Association. Kristy Merrill serves as president and CEO of the NH Bankers Association.