The pace of the continuing banking industry consolidation remains impacted by the COVID pandemic. The Banking Industry Consolidation Rate was 2.4% for the trailing 4 quarters compared to the long term annual rate of 3.7%.

The Bank Merger Rate was only 2.4% L4Q compared to the 4.4% rate over the past 3+ decades.

The Bank Failure Rate over the L4Q was nearly 0.0%, showing the financial strength of the industry today.

And, while the De Novo Bank Replenishment Rate rose to 8.8% - primarily due to the drop in bank merger activity rather than a resurgence of de novo banking, this rate remained well below the average rate of 21.7% over the past several decades.

Overall, the number of banks in the U.S. fell to 4,914 at the end of Q3 2021 - down 88 from one year ago.

The largest declines occurred in Community Banks with less than $250 million in total assets.

And, importantly, the largest declines occurred in rural markets with populations of less than 50 thousand.

The rate of banking industry consolidation remained below the historical average of 3.7%.

For the L4Q, the Banking Industry Consolidation Rate was 2.4%, or approximately 24 banking charters disappeared for each 1,000 banks existing one year ago.

Community Banks consolidated at a rate of 2.7% with several states showing a consolidation rate of greater than 4%: Indiana, Minnesota, Tennessee, New York and Alabama.

For the L4Q, bank merger activity was restrained due to the pandemic. The Bank Merger Rate was 2.4% compared to an average rate of 4.4% since 1990. Preliminary data for Q4 2021 does show a pick up in activity with an annualized rate approximating the historical averages.

De novo banking activity has seen a pick up, but remains significantly below historical averages. The De Novo Bank Replenishment Rate was 8.8% for L4Q, or approximately 9 new banks formed to replace every 100 lost to merger or failure. But this rate remains well below the historical average of 21.7%.

There were no bank failures during 2021 and only 2 failures L4Q. Hence, the Bank Failure Rate was near 0.0%.

Financially, the industry is sound. Credit quality looks good. And capital levels are strong.