The U.S. depository industry has continued its path of consolidation, but as of the end of 2017, there are still over 5,600 banks chartered in the United States.  This represents a decline of just under 3,000 charters from 10-years earlier, as mergers, receiverships and a near complete dearth of de novo activity have continued to shrink the number of banks.

As of December 31, 2017, we had 5,679 depository institutions with $17.5 trillion in total assets.  That represents a decline of 243 institutions an increase of $600 million in assets since the end of 2016, and a decline of 2,865 institutions and an increase of $4.4 trillion since the end of 2007.

The four largest depository institutions by asset size (JPMorgan, Wells Fargo, Bank of America and Citi) hold $7.03 trillion (up slightly from $6.84 trillion at the end of 2016).  Those four now represent 40.1% of the industry’s assets, down slightly from 40.5% at the end of 2016; but up from 34.8% ten years earlier.

There are 120 additional banks that have assets greater than $10 billion, holding $7.45 trillion.  Both of those numbers are materially higher than one year earlier; at the end of 2016, there were 111 banks in this category with $6.98 trillion in assets.  The 124 largest banks now hold 82.7% of the industry’s assets.  Ten years ago, there were 119 institutions with more than $10 billion in assets, and they collectively held 77.6% of the industry’s assets.

At the end of 2017, the United States had 633 banks with between $1 and $10 billion in total assets.  This group, which represents 11.1% of U.S. charters, holds $1.79 trillion in assets, or 10.2% of the industry’s assets.  This group increased by 6 charters since the end of 2016 and by 78 charters since the end of 2007.

86.7% of the bank charters in the United States are institutions with less than $1 billion in assets, with 675 institutions between $500 million and $1 billion in assets and 4,247 institutions with less than $500 million in assets.  Collectively, these charters hold less than 7.1% of the industry’s assets.  The number of charters with assets between $500 million and $1 billion ticked up by 12 charters since the end of 2016, while the impacts of consolidation were sharply felt by the smallest institutions.  Banks with less than $500 million in assets fell from 4,517 charters to 4,247 charters during the year, a decline of 270 charters (or almost a 6% decline during 2017).

Last year, we dug into more depth on the causes of these changes, and I believe most of those conclusions remain accurate.  The industry is continuing to “consolidate up,” and the smallest of banks are shrinking as a portion of overall bank population.  That said, the U.S. depository market remains a diverse line-up of institutions, with over 1,300 institutions with between $500 million and $10 billion in assets and another 124 will more than $10 billion in assets.

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