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Why you should be banking with First Federal Savings and Loan Assoc.

A tiny local bank with a big impact in the small city of Morehead, Kentucky

While you’re probably not able to bank with this Better Banking Option, we wanted to feature them as a reminder that sometimes, the Better Banking Option is also the most traditional. Usually, “traditional” banking is cautious about lending to low-income households, because these are considered riskier investments and the traditional bank’s main responsibility is to generate profit for their shareholders. However, when a smaller bank has been faithfully serving a town or neighborhood for decades, especially when that town may have a lower average income level compared to the national average, they coincidentally end up being a great community bank as well as a traditional bank.

First Federal Savings & Loan Association only has about $35 million in assets, making it the smallest institution we’ve ever featured. They have one branch in downtown Morehead, KY, and they’ve been serving the area for more than 50 years. They’re so small they don’t even have a website, making it impossible for anyone outside of Morehead or the surrounding area to deposit in this Better Banking Option. They’re also too small to have the resources to apply for any designations like CDFI, although they would probably qualify for CDFI status. Just because this bank is tiny, though, doesn’t mean they don’t have a big impact in Morehead.

Although this bank is too small to have to report what percentage of their lending goes to qualified census tracts (QCTs), because their only location is in a QCT and the median household income is lower than the national average, we can assume most of their housing focus is going to low- and moderate-income households. Considering that 71% of their lending is done in housing, this means that the majority of the assets at this institution are being used for low- and moderate-income housing. They do a significant amount of small business lending and small farm lending, with 10% and 2% of their assets being devoted to these areas, respectively. Additionally, they’re effectively loaned out, with 90% of their assets being used for loans.

We likely would not have found this institution if we hadn’t been specifically asked to look for Better Banking Options in Morehead. Many similar banking institutions are still operating all across this country, but they’re dying out, as people move away from small towns into big cities and move their money to mega banks as well. If you live in a metropolitan area, it’s likely most such banks have been driven out by competitors. But regardless of where you live, and especially if you live in a small town, check out BankLocal to see if there are any banks in your area that are entirely local.

The more branches a bank has in your area, the more lending is probably being done in your area. When you choose to bank with an entirely local Better Banking Option, you can be sure that your deposits are being used in your community. So just because you don’t live in Morehead, take reading this article as the opportunity to find any small, traditional and local banks in your area. Or, alternatively, reach out to us at, and we can see if there are any small gems in the banking realm where you live! We’ll do personalized research on the most socially responsible banks in your area. All you have to do is reach out today!


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