Best Small Banks by State 2022

By Newsweek

America's Best Banks 2022

Over the past 18 months, COVID has upended all aspects of American life, including how we bank. And that, in turn, has shifted what we look for in the place where we park our money and which institutions serve us best.

Take savings, for instance. While the personal savings rate is down from the stratospheric high of 33.8 percent recorded early in lockdown last year, Americans are still setting aside cash at historically high rates: nearly 10 percent recently. But just as our need to earn a decent return on our savings has rarely been higher, many banks have slashed rates; the average savings account pays out just 0.06 percent now, and many of the largest banks pay nothing at all.

"Interest rates are even lower than in the seven years following the Great Recession when the Federal Reserve also dropped rates to around zero," says Ken Tumin, founder of the bank comparison site DepositAccounts.com.

That makes it all the more important to seek out institutions that pay a decent rate, while also keeping fees to a minimum, so you keep more of what you earn. In that respect, there's a silver lining to current low-rate conditions as banks look for other ways to woo new customers. "Some are lowering fees, eliminating maintenance fees or offering better overdraft policies," Tumin says.

Also in demand these days: institutions that make it easy to bank remotely. Nationwide, 41 percent of Americans are now digital-only bank customers, J.D. Power reports, up from a third pre-COVID. About four in 10 who made the switch during the pandemic say they won't go back, says Paul McAdam, senior director of banking intelligence at J.D. Power.

To keep online users happy, banks are improving apps and adding features, like budgeting tools, options to round up debit card transactions to the nearest dollar to boost balances, and offering advice to help you reach financial goals like improving your credit score. "Banks are focusing on digital tools that help customers improve their financial wellness," says McAdam. "A lot of this work began before the pandemic, but over the past year or so, the industry has accelerated their efforts."

To help you make sense of the new banking environment and find an institution that best suits your needs, Newsweek has partnered with LendingTree, the online marketplace and comparison site for financial services, for our annual Best Banks rankings. We assessed thousands of FDIC-insured banks and credit unions, and the savings and checking accounts they offer, based on more than 50 different factors to land on best-in-class options in 26 different categories. One or more of these winning banks may be the perfect choice for you.

—Kerri Anne Renzulli, Senior Reporter

Award	State	Winner	Branches
N/A	Alabama	United Bank	18
N/A	Alaska	Northrim Bank	17
N/A	Arizona	Mission Bank	3
N/A	Arkansas	First Security Bank	78
N/A	California	Farmers & Merchants Bank of Central California	31
N/A	Colorado	Bank of Colorado	43
N/A	Connecticut	Ion Bank	20
N/A	Delaware	Community Bank Delaware	2
N/A	District of Columbia	City First Bank of D.C.	1
N/A	Florida	First Federal Bank	23
N/A	Georgia	Pinnacle Bank	24
N/A	Hawaii	Central Pacific Bank	31
N/A	Idaho	First Federal Savings Bank of Twin Falls	13
N/A	Illinois	Morton Community Bank	43
N/A	Indiana	German American Bank	50
N/A	Iowa	MidWestOne Bank	32
N/A	Kansas	Emprise Bank	33
N/A	Kentucky	Republic Bank & Trust Company	28
N/A	Louisiana	First Guaranty Bank	27
N/A	Maine	Bar Harbor Bank & Trust	22
N/A	Maryland	Hebron Savings Bank	13
N/A	Massachusetts	Brookline Bank	30
N/A	Michigan	ChoiceOne Bank	31
N/A	Minnesota	Deerwood Bank	13
N/A	Mississippi	The Citizens National Bank	24
N/A	Missouri	Southern Bank	37
N/A	Montana	TrailWest Bank	14
N/A	Nebraska	Union Bank & Trust Company	31
N/A	Nevada	Valley Bank of Nevada	2
N/A	New Hampshire	Bank of New Hampshire	22
N/A	New Jersey	1st Constitution Bank	26
N/A	New Mexico	First American Bank	15
N/A	New York	Trustco Bank	88
N/A	North Carolina	HomeTrust Bank	20
N/A	North Dakota	American Bank Center	16
N/A	Ohio	The Farmers National Bank	36
N/A	Oklahoma	Armstrong Bank	22
N/A	Oregon	Citizens Bank	15
N/A	Pennsylvania	Mid Penn Bank	39
N/A	Rhode Island	The Washington Trust Company	22
N/A	South Carolina	First Palmetto Bank	23
N/A	South Dakota	First Dakota National Bank	18
N/A	Tennessee	Reliant Bank	27
N/A	Texas	Happy State Bank	60
N/A	Utah	Cache Valley Bank	20
N/A	Vermont	Union Bank	14
N/A	Virginia	Blue Ridge Bank	31
N/A	Washington	HomeStreet Bank	36
N/A	West Virginia	Clear Mountain Bank	10
N/A	Wisconsin	North Shore Bank	44
N/A	Wyoming	Bank of Jackson Hole	10

Visit our rankings portal

Methodology

To identify America's Best Banks and Bank Accounts, Newsweek worked in partnership with LendingTree, which culled candidates from an initial universe of more than 2,625 FDIC-insured financial institutions (credit unions were excluded from consideration for overall bank winner categories but included for individual account winner categories). LendingTree applied filters to create a short list of candidates in each category, based on the most salient features for each bank type or account, supplied the data and made recommendations for scoring. The final proprietary ranking system was developed by Newsweek, based on the factors that would be most important to consumers. Data sources for the project included: DepositAccounts.com, information published by each bank or credit union, quarterly call reports filed with the FDIC by banks or NCUA by credit unions, Consumer Financial Protection Bureau complaints and mobile app reviews.

Best Bank winners were selected from among 2,508 financial institutions and assessed on more than 30 separate factors, covering the overall health of the bank, customer service performance and features, digital and branch presence, account and loan options, interest rate offerings and fees. Among the specific data collected: the average service charges collected on deposit accounts during the first quarter of 2021; average interest paid on deposit accounts during the first quarter of 2021; the number of complaints submitted to the Consumer Financial Protection Bureau and how quickly the bank responded, the kinds of loan and account products offered; mobile app scores; the kinds of customer service features offered; overall health of the bank as determined by DepositAccounts.com; and, depending on the Best Bank accolade, branch presence.

For Best Bank state winners, the Best Big Bank in each state needed to have at least one branch per 100,000 residents and at least $10 billion in assets, while the Best Small Bank in each state needed less than $10 billion in assets and had to be among the five banks with the most branches in the state. For Best Big Bank in Every Major Metro area, a bank must have at least one branch per 100,000 residents in the analyzed location. Financial institutions needed at least one branch to win for best checking, savings and traditional checking accounts. Only banks without a single physical branch were considered for the online bank categories. For Best Customer Service, a bank needed to have responded to at least 97 percent of complaints filed with the CFPB in a timely fashion to be considered; other features such as languages provided on the bank's website and app as well as banking and credit card service lines were also evaluated.

Individual Best Bank account winners were selected from a pool of more than 2,625 financial institutions that included 125 credit unions open to anyone to join. Criteria included: current interest rate; average interest rate over the past year; minimum deposit required to open an account, the monthly service fee charged to maintain the account and how easily it could be avoided; fees charged for nonsufficient funds, overdraft, or/and overdraft protection; amount charged to use an out-of-network ATM; amount refunded for out-of-network ATM usage; cost to replace a debit card; whether requirements like online banking or debit card usage must be met to get top rates; the bank's average mobile app score; branch presence; the bank's financial strength; and, for CD accounts, number of days of interest lost for withdrawing early. For all categories, no accounts were considered if they required you to also have another existing account with the financial institution.

The weighting given to each factor varied depending on the Best Bank accolade; Newsweek exercised final editorial judgment when selecting winners. The complete data set was last updated by LendingTree on July 28, 2021. Current interest rate information is accurate as of September 9, 2021 and represents the highest possible rate a customer could earn, if all qualifications are met.