“Don’t blame me… I bank locally” reads the bumper sticker doled out for free by the Florence, Massachusetts based Florence Savings Bank. Their message: it was the big Wallstreet banks that brought on the crisis, small local banks are not to blame.

“There has been so much negative broad-brush painting of ‘banks’ in the media,” says Doug Burr, senior vice president of the Florence Savings Bank, “that many customers have been asking about the bank’s strength.” Which led the bank to communicate more clearly to their customers what the difference is between them and the big players. Small banks don’t deal with complex derivatives or aggressive trading, they are much too conservative and too boring for that, representatives of the sector point out.

Unfair competition
Indeed, their conservative strategy has kept small banks out of the storm for almost a year now, but over the past few months they too are beginning to feel the pain of the crisis. In the first half of 2009, 53 US banks filed bankruptcy, compared to only 3 in 2007. While the larger banks receive government funding, the small banks are left to their own devices. This leads to unfair competition, bankers complain.

While the struggle is not yet over, analysts foresee a bright future for small banks. “They are simple organizations and require a relatively small capital to back their operations,” says Christopher Whalen of Institutional Risk Analytics.

So what do you think of the small bank’s attitude? Is conservative and boring the way to go? And would you rather bank locally or with big international banks?