The topic of "too many banks" has been in the news recently. So let's look at what has happened to the number of banks in the U.S. over the past twelve months.

The banking industry continues its ongoing transformation. Consolidation through mergers and acquisitions is occurring. On a rare occasion new banks are chartered. And a few banks have failed.

Community Banks remain key participants in the industry evolution. For this blog discussion, we will use $10 billion in total assets as the limit for defining a Community Bank. This makes the analysis easier, but size alone is not the best means to define a "Community Bank".

Today, there are 5,737 banks in the U.S. and 5,612 are Community Banks under $10 billion in total assets. Over the past 12 months, there have been 3 new banks started, 7 banks have failed and there have been some 240 bank mergers and acquisitions. The total number of banks dropped 4 percent over the last twelve months.

The chart below shows net change in the number of banks by bank size segmented by total assets.

All of the net reduction in aggregate numbers of banks occurred in Community Banks with total assets of less than $500 million. This was a net reduction of 285 banks, or 6 percent. There was net growth totaling 30, or 2 percent, for Community Banks between $500 million and $10 billion in total assets. This increase was due to some combination of organic growth and acquisitions (and net of 2 bank failures).

Over the past twelve months, there has been a net decrease in the number of banks by 244. The net reduction in number of banking organizations was concentrated across 12 states where the number of bank charters dropped by 145. Illinois had the largest decrease in banks at 21. Six other states - Kansas, Florida, Wisconsin, Texas, Missouri and Kentucky - had declines of 10 or more.

Community Banks continue to flourish and serve local markets - many small and rural communities- across the U.S. While there was a decrease in the number of Community Banks over the past twelve months, there remain over 5,600. The table below shows the top 10 states with Community Banks segmented by bank asset size. Several states have sizable concentrations of Community Banks with less than $500 million in total assets, including Illinois, Texas, Iowa, Minnesota, Wisconsin, Missouri, Oklahoma and Kansas.

As you progress through the table upward in total assets from “< $100M”, you will notice the “green” year-over-year growth rates showing up across many of these states. This shows the dynamic growth that is occurring across Community Banks. They are successfully executing on their strategic plans. Community Banks are achieving growth organically in loans and deposits through sales and service. And Community Banks are showing their expertise and merger readiness in carrying out their acquisition plans. 

While their numbers may be down from one year ago, Community Banks continue to grow, prosper and serve their customers.