Wondering who ate your bank? If your bank was small, chances are it’s been swallowed by a bigger bank. Even if your bank was medium-sized, it’s likely merged with another. The consolidation of banks has been a trend over the past 35 years. In 1985, there were 14,427 banks in the U.S. (that were insured by the Federal Deposit Insurance Corporation). In 2018, there were only 4,718. Meanwhile, the number of branches has jumped from 43,790 to 78,014. On one hand, fewer banks mean less competition, which is bad for consumers. But on the other hand, big banks have lower costs, which they can pass on to their customers. And no matter where you live, you can open an online account with a big bank. Read on for more about the 10 biggest banks in the U.S. by total assets, according to the Federal Reserve.
At the top of the list, JPMorgan-Chase holds almost $2.4 trillion in worldwide assets. This makes it the largest bank in the country – and the sixth-largest in the world. The company is the result of the 2000 merger of J.P. Morgan and Company and Chase Manhattan Corporation. While the J.P. Morgan name is used for investment banking and private wealth management, the bank provides retail and commercial bank services as Chase.
Financial titan of the 19th century, John Pierpont Morgan is the namesake of the company and founder of the original J.P. Morgan Bank. Early American politician and notorious duelist Aaron Burr was one of the creators of Chase Manhattan. Today, CEO Jamie Dimon leads the bank. Its fourth-quarter profit for 2019 rose 21% to $8.52 billion, thanks in large part to its investment bank division.
Bank of America
With $1.8 trillion in consolidated assets, Bank of America is second on the list. Its headquarters in Charlotte, North Carolina, singlehandedly makes that city one of the biggest financial centers in the country. Though it is not the largest bank, this company is in fact the world’s largest wealth management firm, because it owns Merrill Lynch, a giant in that field.
Bank of America has 4,265 branches in the country, only about 700 fewer than Chase. It started as a small institution serving immigrants in San Francisco at the beginning of the 1900s, that was, oddly enough, called the Bank of Italy. Bank of America briefly ventured into finance in China with acquisition of a stake in Chinese Construction Bank, which it later sold off.
Following a merger with Norwest Corporation in 1998 and an acquisition of Wachovia National Bank in 2008, Wells Fargo is the fourth largest bank in the country. Going by number of branches, though, it is the largest, with 5,486. Its parent financial services company has headquarters in San Francisco, while the bank’s main office is in Sioux Falls, South Dakota.
Wells Fargo holds the oldest continuously operating bank charter in the United States. Acquired through Wachovia, it was originally granted to the First National Bank of Philadelphia. In 2016, the bank gained some notoriety after news came out about a corporate culture where employees felt pressured to create 2 million bank accounts without customers’ permission. After a series of charges involving wrongful home foreclosures and violations of consumer protection laws, CEO Tim Sloan stepped down in 2019. The bank reported a fourth-quarter profit in 2019 of $2.87 billion, down more than 50% from the previous year.
A pioneer of both the credit card industry and automated teller machines, Citibank – formerly the City Bank of New York – was regarded as an East Coast equivalent to Wells Fargo during the 19th century when both banks were purely regional. With its expansion to Argentina in 1914, Citibank was also the first U.S. bank to open a banking office in a foreign country.
Today, the bank has 700 branches in the U.S. and 170 in the rest of the world. The bank posted a full-year profit in 2019 of $8.04 per share. As a result, it was the best year for its stock since 1998.
U.S. Bank/U.S. Bancorp
Fifth on the list, U.S. Bank, which is part of U.S. Bancorp, has more than $477 billion in consolidated assets. With headquarters in Minneapolis, the bank largely operates in the the Midwest and West. It has 2,914 domestic branches.
The current bank is the result of many mergers and acquisitions of major regional banks, including Old National Bank, Heritage Bank, People’s National Bank, Northwestern Commercial Bank, Heart Federal Savings and Loan and West One Bancorp. In 1997, First Bank System acquired and renamed what is now U.S. Bancorp, only to be taken over by Firstar Corporation in 2000. The newly consolidated bank kept the U.S. Bancorp name (since 1933, the law has prohibited banks from using “United States” in their names). It has since acquired many more banks such as Pacific Century Bank, Bay View Bank, Vail Banks, Downey Savings and Loan and Charter One Bank.
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Pittsburgh-based PNC is a regional financial institution operating mostly on the East Coast. With 2,380 branches in 19 states and Washington, DC, the bank has nearly $397 billion in total assets.
An acronym for two different banks, PNC stands for both Pittsburgh National Corporation and Providence National Corporation. When the two Pennsylvania banks merged to form the beginnings of the current company, they decided to use just the acronym because of the coincidence of their acronyms. PNC was an early adopter of “virtual wallet” services among traditional banks, and is known for its yearly index of the prices of items from the Christmas carol, “The Twelve Days of Christmas.”
Capital One is primarily a retail banking operation, providing credit cards, auto loans and home loans in addition to checking and savings services. Originally a pure credit card company, Capital One expanded into banking in earnest in 2005. Early in 2014 Capital One was criticized for changing its customer terms of service to allow the bank to contact customers in any manner it chose, including deliberately deceiving them with fake phone caller IDs. Today, Capital One has more than $318 billion in assets, though its branches number only 474, the lowest count on this list.
With $311 trillion in assets, TD Bank is also the combination of several banks. Over the years, it has gone by the name Portland Savings Bank, Banknorth and now TD Bank. In 2008, it acquired Commerce Bank and then merged with Canadian TD Banknorth.
The TD in TD Bank actually stands for Toronto-Dominion. Though its parent company is Canadian, the U.S. subsidiary has headquarters in Cherry Hill, New Jersey, and 1,242 branches in the country.
Bank of New York Mellon
The Bank of New York was co-founded in 1784 by none other than the first Secretary of the Treasury, Alexander Hamilton. Bank of New York Mellon (BNY Mellon) is the result of the merging of that firm and T. Mellon and Sons, a Pittsburgh institution that financed the steel and fuel industries. This long history makes BNY Mellon the oldest banking corporation in the country. It holds $304 trillion in total assets and operates two offices in the U.S. and 15 overseas. Its subsidiary BNY Mellon Wealth Management provides investment management services,
Last but not least, Boston’s State Street Corporation originated as a shipping financing firm. It still does business that is similar in spirit, focusing on global banking services and investment management to overseas institutional investors. State Street was involved in a landmark court case in 1998 that found a computer algorithm can be patented in the US. Currently, the bank has more than $241 billion in consolidated assets. Like BNY Mellon, it has far more foreign branches (11) than domestic (two).
Tips for Choosing Your Bank
- If your local bank’s fees seem high, consider trying a national bank that offers online accounts or an online bank that has no physical branches. To increase their customer base, these banks often have lower requirements to avoid fees and offer higher interest rates on savings.
- Some banks are affiliated with wealth management firms. These advisors, though, may not be fiduciaries who are legally bound to put clients’ interests first. To find the right financial advisor for you, use SmartAsset’s matching tool, which makes up to three recommendations based on your situation and your goals. It’s free and takes five minutes.
Source: Federal Reserve
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