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MacroMonitor Market Trends Newsletter January 2018

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National, Regional, and Local Banks and Credit Unions

Post 2008–09 Recession, the United States has just a handful of large national banks (assets of $1 trillion or more), a spate of superregional banks (assets of $100 billion but less than $1 trillion), and all the rest—state, local, and community banks. With current government merger-and-acquisition (M&A) restrictions, the situation is unlikely to change. Large banks are prohibited from M&A; regional banks want to avoid restriction; smaller institutions are generally too busy to attempt M&A. In the past several years, when "organic growth" has been the dominant strategy, only regional banks continue to gain primary customers; in contrast, all other depositories are treading water.

Figure 1: Trend: Primary Depository

More households choose a national bank as primary than choose a regional bank, other bank, or credit union, and this number has grown significantly since the Great recession. However, other important considerations are how much of a household's savings and investments are at the household's primary depository and if that practice is increasing or decreasing.

Figure 2: Trend: Household's Savings and Investments Held 
at Their Primary Bank or Credit Union

The values in Figure 2 are not adjusted for inflation; adjusting would not change the trend meaningfully. The amount of savings and investments held by households that use a national bank as primary (red line) has continued to increase in comparison with the amount held by all households with a depository (black line). In addition, the gap between savings and investments held by all households at a national bank as primary has increased consistently postrecession. Regional banks, and all other bank primaries, previously with higher savings and investment holdings than those of all households with a depository, are now at parity. The average amount of savings and investments at credit unions as primary remains lower than for all households and is in decline.

The January Executive Report—Key Differences in Households Using National Banks, Regional Banks, All Other Banks, and Credit Unions as Primary—highlights demographics, financial balance sheet, institutional and channel use, and financial attitudes of these mutually exclusive households with implications for each type of provider.

To learn more, contact us. From their CFD client-landing page, MacroMonitor subscribers may:

  • Access the January 2018 Summary Report, Primary Depositories, Key Differences in Households Using National Banks, Regional Banks, All Other Banks, and Credit Unions as Primary.
  • Schedule a full presentation about these households, including a customized and proprietary Q&A session. Contact us to schedule your presentation.