During the five years ended June 30, 2024, the number of U.S. banks decreased by over 14%, mostly by way of mergers and acquisitions.

This consolidation of the banking industry in the U.S. has increased the average bank asset size by more than 50% in the past five years.

But not all banks are growing by way of merger; some are finding more unique avenues of growth.

The 50 banks listed on page 5 reported increases of more than 40% in their respective asset sizes during the last year alone.

Banks are Finding their Niches and Growing their Assets

During the past five years (June 30, 2019 to June 30, 2024) we lost 764 federally-insured banks across the nation (14.4% of  the industry). Some of that, as we saw last week, was from credit unions buying banks. (Two more credit unions announced bank acquisitions this week.) Still, that accounts for just a small fraction of the disappearing banks.

Much more frequently, banks are merging into other, larger banks. That consolidation has increased the average bank asset size by more than 50% in the past five years. The average U.S. bank at June 30, 2019 had roughly $3.4 billion in assets; today it exceeds $5.2 billion.

The 50 banks listed on page 5 reported increases of more than 40% in their respective asset sizes during the one-year period from June 30, 2023 to June 30, 2024. You will find them in descending order by percent of year-over-year asset growth.

Some of these banks have grown organically, but not always in a traditional manner. The first two banks listed are prime examples.

At the end of 2022, 3-Star Peoples Savings Bank, Montezuma, IA, a one-office bank with about $60 million in assets, was purchased by a group of former bankers, who: A) changed its name to 3½-Star Capra Bank; then B) moved the headquarters to Dubuque, Iowa, and finally C) sold the original Montezuma office to 5-Star First State Bank, Lynnville, IA.

Dubuque was where these bankers wanted to be. They went about it in a circuitous manner, but that was still easier than starting a de novo bank. From its new perch in Dubuque, IA, Capra began to spread its wings. An office was opened in September 2023 in Lubbock, Texas, then another in Albuquerque, New Mexico this past summer.

Capra Bank is betting on AI to help level the playing field and make it easier for community banks to compete with big banks. It seems to be working; Capra Bank’s assets have grown 500% since its inception as “Capra Bank” in 2022.

Another, 3-Star Sonata Bank, Brentwood, TN was formerly known as Sebree Deposit Bank, Sebree, KY before five high-profile business leaders got together to create a bank that would foster economic growth in the “Sebree region". (Sebree, Kentucky is just about two hours north of Brentwood and Nashville, Tennessee.)

In the second quarter of 2023, Sonata launched a new platform designed specifically for the quick-service restaurant (QSR) market. The fast-food industry has a very high turn-over rate which results in many workers being un-or-underbanked. Sonata wants to rectify that by focusing specifically on their needs.

Between June 30, 2023 and June 30, 2024, Sonata Bank’s assets grew more than 220% - from $55.558 million to $178.467 million.

Other banks are growing by way of mergers and acquisitions. During calendar 2023, 110 bank-bank combinations were completed; so far this year, we are up to about 70.

The first one we will highlight was billed as a “unification between family-owned brands” that included the four banks under the Crews Banking Corporation (Holding Company) umbrella (Charlotte State B&T, Port Charlotte, FL, Wauchula State Bank, Wauchula, FL, Englewood Bank & Trust, Englewood, FL and Crews B&T, Arcadia, FL).

The surviving FDIC certificate number and headquarters are that of Wauchula State Bank. However, once combined (September 2023) the new name became 5-Star Crews Bank & Trust, Wauchula, FL to match the parent. Crews B&T is only listed on page 5 because of mergers. The four banks combined actually reported higher assets at June 30, 2023 ($2.274 billion) than Crews B&T had at June 30, 2024 ($2.161 billion).

With several offices in Southwest Florida, Crews B&T did experienced some disruption from Hurricane Milton. All but one branch (on Gasparilla Island) are back up and operating. Arcadia and Englewood branches were already slated for demolition and replacement. That is still happening, but timing may have changed.

On May 1st of this year, these two unrelated banks joined forces: the $267 million asset First National Bank, Spearman, TX was acquired by Bank of Panhandle, Guymon, OK. Bank of Panhandle immediately changed its name and is now 5-Star Panhandle First Bank, Guymon, OK. The acquisition increased Panhandle First Bank’s assets by more than 126% - from $226.6 million to $513.3 million.  

Finally, 5-Star Burke & Herbert Bank & Trust Company, Alexandria, VA, formerly a $3.6 billion asset bank, serving customers in the Alexandria, Virginia area for over 170 years, announced plans last year for a merger of equals with Summit Community Bank, Moorefield, WV (assets $4.6 billion).

The transaction was completed in May 2024 more than doubling Burke & Herbert’s asset size (year-over-year) to $7.8 billion at June 30, 2024. The Summit name and website still exist as of this writing, while the banks work on merging their systems. Eventually, Summit Community Bank will be gone completely. Although, Burke & Herbert Bank & Trust Company does operate under another name online: SFGIDirect, a division of Burke and Herbert Bank &Trust Company.

We hope this explains how it is that the “average” bank size is now over $5 billion.