Community Banks Survive Banking Consolidations

Consolidation in the banking sector has been a steady trend for nearly thirty years, with smaller banks disappearing and large banks becoming too big to fail, but the Federal Deposit Insurance Corporation (FDIC) argues that community banks have actually been very resilient as a group, growing in number throughout this period of heavy mergers and acquisitions.

“Institutions with assets between $100 million and $10 billion—most of which can be considered community banks—have increased in both number and in total assets since 1985,” write FDIC economists Benjamin R. Backup and Richard A. Brown.

Banks with between $100 million and $1 billion in assets grew 7% and banks with assets between $1 billion and $10 billion grew 5% between 1985 and 2013...