What Exactly Is a Regional Bank? How It Differs from a National Bank
Regional banks are larger than community banks but smaller than national banks, with assets ranging from $10 billion to $100 billion. Some local banks are limited to one community, whereas a Regional Bank can have branches in several states and history in each location.
Their bankers may live in your area, shop at the same grocery store, and even coach the local soccer club.
Because of their “in-between” status, regional banks offer many advantages over national and local banks in a single package. They provide a comprehensive range of national bank services, from basic checking to expert investment advising, while also cultivating and sustaining the personal relationships that make local banking appealing.
The Key Takeaways
- Regional banks are defined by their asset size rather than the geographic area they serve.
- A regional bank is one with assets ranging from $10 billion to $100 billion, according to the Federal Reserve.
- Regional banks often offer services such as checking accounts, loans, and credit cards.
- regional banks might offer business banking services, particularly to small enterprises.
five regional bank benefits
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Branch and ATM access:
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Technology:
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Rates and fees:
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The breadth of financial services and products:
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Community involvement:
1. Branch and ATM access:
Regional banks typically have a large network of branches, many of which were inherited through bank acquisitions, so one is never far away. Furthermore, regional banks generally link with other ATM networks in addition to their branch ATMs to ensure the same availability as a national bank. Even if you are going outside of the United States, a regional bank will normally have in-network ATMs available.
2. Technology:
Regional banks recognize your need to be mobile. They employ their financial resources and talent to build innovative tech banking services, and their size allows them to roll out new services swiftly. Most branch services, from mobile deposits to digital person-to-person transfers, should be conveniently accessible via a smartphone app or a laptop.
3. Rates and fees:
Because of their flexibility, regional banks can usually offer their customers relatively competitive rates. Regional banks can even beat local banks in essential products such as savings, money market accounts, and CDs. Because they compete with both large banks and community lenders, their fees are likely to be competitive as well.
4. Breadth of financial services and products:
Because of their size, regional banks are likely to manage a portfolio of investment products and services as complete as those of their national competitors. They can, however, provide them with more customized care. You’re likely to find that all of your needs are addressed throughout your life, from high school savings to retirement preparation.
5. Community involvement:
Regional banks have a natural, major role in assisting the communities they serve because of their unique combination of size and geographical origins. Regional bankers, for example, may invest in the region’s charities, schools, and burgeoning towns, and it’s not uncommon to see them roll up their sleeves and volunteer in local communities.
But it’s not only monetary and time commitments; several regional banks are also involved in their communities through in-house financial literacy and wellness programs. These programs assist their customers in making more educated life decisions that benefit the community as a whole.
What Kinds of Services Do Regional Banks Provide?
Regional banks provide the majority of the services that customers expect from a financial institution. They frequently provide the same services as national banks but with more personal relationships associated with community banks. Here are a few services and products that many regional banks will provide.
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Investments
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ATMs
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Credit cards
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Deposit accounts
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Business Banking
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Loan products
1. Investments
Tax-advantaged accounts, such as individual retirement accounts (IRAs), may be included in investment services. Taxable accounts may be available at some regional banks.
2. ATMs
Regional banks generally have ATMs in their locations and may have access to a nationwide ATM network.
3. Credit cards
Many regional banks provide credit cards, including credit cards with benefits, depending on the bank.
4. Deposit accounts
Checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs) are all types of deposit accounts.
5. Business banking
Many regional banks, in addition to personal banking services, provide commercial banking services, particularly to small enterprises.
6. Loan products
Mortgages, vehicle loans, personal loans, and home equity loans are examples of lending products offered by regional banks.
Examples of Regional Banks in the U.S.
The term “regional” may imply that regional banks are small or exclusively service specific areas. However, many of these banks service a huge number of states and provide nationwide web access. Some of the largest regional banks are as follows:
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Associated Bank
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First National Bank of Omaha (FNBO)
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Flagstar Bank
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Prosperity Bank
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Zions Bank
1. Associated Bank
Associated Bank is headquartered in Green Bay, Wisconsin, and operates branches in Wisconsin, Illinois, and Minnesota.
2. First National Bank of Omaha (FNBO)
For over 165 years, FNBO has served customers throughout Nebraska. Today, the company’s assets exceed $26 billion, and it serves consumers in eight states: Colorado, Illinois, Iowa, Kansas, Nebraska, South Dakota, Texas, and Wyoming are the states involved.
3. Flagstar Bank
Flagstar Bank, which is owned by New York Community Bancorp, is one of the largest regional banks, with $90.1 billion in assets. It covers nine states in the Northeast and Midwest.
4. Prosperity Bank
Prosperity Bank is based in Houston and serves clients in two states: Texas and Oklahoma. Its assets total $37.69 billion.
5. Zions Bank
Zions Bank, headquartered in Salt Lake City, has more than $90 billion in assets. It serves Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming, among others.
Regional Banks vs. Community Banks
The Federal Reserve distinguishes explicitly between community and regional banks. A community bank has assets of less than $10 billion, whereas a regional bank has assets of $10 billion to $100 billion.
However, regional banks and community banks are likely to have other distinctions that clients would notice. To begin with, community banks may provide fewer services than regional banks. They may provide many of the same deposit and lending products as regional banks, but they may not provide investment or insurance services.
Another distinction between community and regional banks is the geographic area they service. Regional banks, while not defined by this, service wider geographic areas than community banks.
Regional Banks vs. National Banks
National banks, unlike regional banks, are not always defined by their asset size. A national bank, according to the federal government, is one whose charter has been approved by the Office of the Comptroller of the Currency (OCC), is a member of the Federal Reserve System, and is insured by the Federal Deposit Insurance Corp. (FDIC).
A regional bank might be a national bank under this criteria. However, many people refer to national banks as ones that operate across the country rather than simply in one region, as regional banks do.
If we consider national banks to be those that operate on a national scale, they are often significantly larger institutions with hundreds of billions or trillions of dollars in assets, as opposed to regional banks, which have less than $100 billion in assets.
National banks may offer a broader range of consumer and commercial products, such as deposit accounts, and may also provide corporate and investment banking services. These banks are more likely to be well-known brands such as JPMorgan Chase, Bank of America, Citibank, and Wells Fargo.
| Pros and Cons of Regional Banks | |
|---|---|
| Pros | Cons |
| Typically wider range of services than community banks | Fewer branches than national banks |
| Larger number of branches than community banks | Often have fewer services than national banks |
| May have lower fees than national banks | |
| More community involvement than national banks | |
Is It Better to Bank at a Regional Bank or a National Bank?
If you’re deciding between a regional and a national bank, you might be asking which is better for you. To answer that question, evaluate what you require from a bank.
Perhaps it is vital to you that you can get all of your financial services from a single bank and that you can find a branch even while you are on vacation. In that situation, you should generally go with a national bank. A regional bank, on the other hand, maybe preferable if you prefer a more community-oriented bank with reduced fees and local branches.
Is a Regional Bank Safe?
You may also ask whether a regional bank is safer or riskier than a national or community bank.
Customers were left wondering what would happen if a similar issue occurred at a regional bank after the bankruptcies of Silicon Valley Bank and Signature Bank in March 2023. The federal government moved in fast to respond to such failures, but would it do the same with a regional bank that isn’t considered “too big to fail?”
If you have less than the FDIC insurance limitations of $250,000 per depositor per account category at each bank, you will not lose your money if the bank fails. This is true of both a large national bank and a regional bank.
How big are regional banks?
How do regional banks make money?
Regional banks earn profits in the same way that every other bank does. First, they profit from the interest on the loans they provide. While they do pay interest on savings and other deposit accounts, there is usually a spread that acts as the bank’s cut.
Regional banks also profit from the fees they charge. Regional banks often do not charge as many (or as expensive) fees as national banks, although they will charge some costs, such as account fees, loan fees, overdraft fees, and others. Finally, banks profit from the interest on the securities they hold.
What are super regional banks?
Why do we need regional banks?
Regional banks play an essential part in the economy of the United States. Regional and other small banks provide critical financial services to households and small companies, according to Treasury Secretary Janet Yellen in a statement issued in March 2023. They also aided the economic recovery during the pandemic and increased competitiveness in the banking industry.
How much of regional bank deposits are not insured?
The Federal Deposit Insurance Corporation (FDIC) covers each bank’s deposits up to $250,000 per account category. Many depositors, however, have bigger amounts that are not completely protected. Indeed, according to Wedbush Securities statistics examined by Investopedia, some regional banks have more than half of their total deposits as uninsured deposits. That shortfall could amount to a substantial sum of money that will not be recovered in the event of a bank failure.
What is the difference between a national bank and a regional bank?
Regional banks are so-called because they have historically served a certain region of the country, but that is no longer always the case. They differ from community banks and national banks in terms of asset size, rather than in the areas they serve or the services they provide.
What is the difference between a regional bank and a global bank?
A super regional bank is a mid-sized financial organization with a strong presence in numerous states in a geographical region. In terms of assets, revenue, and scale of operations, it is comparable to a large national or global bank, but it does not operate on a worldwide scale.
How do you know if a bank is a regional bank?
The Federal Reserve classifies community banking organizations as having assets of less than $10 billion and regional banking organizations as having total assets of $10 billion to $100 billion.
What do regional banks offer?
Checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs) are all types of deposit accounts. Mortgages, vehicle loans, personal loans, and home equity loans are examples of financial products that regional banks may offer.
What are the 5 most important banking services?
Checking and savings accounts, loan and mortgage services, wealth management, credit and debit card provision, and overdraft services are the five most essential banking services.
In conclusion
Regional banks play a vital role in the lives of consumers. Many customers find that their local neighborhood bank provides all of the services they require. Furthermore, these banks typically have more branches and services than community banks while being more community-oriented than major national banks.
When opening an account with a regional bank, like with any other bank, strive to keep your deposits under the $250,000 FDIC insurance threshold to ensure that your savings are fully safeguarded. Consider creating another account at a different bank if you have extra money to deposit.
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