What Is a Regional Bank? How It Differs from a National Bank

Regional banks, as defined by the Federal Reserve, are banks with $10 billion to $100 billion in assets. They’re referred to as regional banks because they’ve historically operated within a specific region of the country, but today, that’s not always the case. They differ from community banks and national banks in their size in terms of assets, not in the area they serve or the services they offer.

Regional banks, as we define them in this article, shouldn’t be confused with the 12 regional banks that are a part of the Federal Reserve System. Those banks, each of which is named after the city in which it’s located, serve and monitor commercial banks in those regions.

Key Takeaways

  • Regional banks are defined by their size in terms of assets, not the geographic area they serve. 
  • The Federal Reserve defines a regional bank as one with $10 billion to $100 billion in assets.
  • Regional banks typically provide products like checking accounts, loans, and credit cards.
  • A regional bank may provide business banking services, especially for small businesses.

Key Takeaways

  • Regional banks are defined by their size in terms of assets, not the geographic area they serve. 
  • The Federal Reserve defines a regional bank as one with $10 billion to $100 billion in assets.
  • Regional banks typically provide products like checking accounts, loans, and credit cards.
  • A regional bank may provide business banking services, especially for small businesses.

What Types of Services Do Regional Banks Offer?

Regional banks offer most of the services that consumers expect of a financial institution. In fact, they often offer the same services as national banks but with the more personal relationships of community banks. Here are a few services and products that you can expect many regional banks to offer:

  • Deposit accounts:Deposit accounts include checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).
  • Loan products: The types of loan products that regional banks may offer include mortgages, auto loans, personal loans, and home equity loans.
  • Business banking: In addition to personal banking services, many regional banks offer business banking services, especially for small businesses.
  • Credit cards: Many regional banks offer credit cards and, depending on the bank, credit cards with rewards.
  • ATMs: Regional banks typically offer ATMs at their branches, and they may offer access to a nationwide network of ATMs.
  • Investments: Investment services may include tax-advantaged accounts, such as individual retirement accounts (IRAs). Some regional banks may offer taxable accounts.

Examples of Regional Banks in the U.S.

The term “regional” may give the impression that regional banks are small or only serve certain areas. But many of these banks serve a large number of states and have online access nationwide. Here are some examples of some of the largest regional banks:

  • Associated Bank: Headquartered in Green Bay, Wis., Associated Bank has assets of roughly $39 billion and branches in Wisconsin, Illinois, and Minnesota.
  • First National Bank of Omaha (FNBO): FNBO has been serving customers in Nebraska for more than 165 years. Today, the company has more than $26 billion in assets and serves customers in eight states: Colorado, Illinois, Iowa, Kansas, Nebraska, South Dakota, Texas, and Wyoming.
  • Flagstar Bank:Flagstar Bank, held by New York Community Bancorp, is one of the largest regional banks, with assets of $90.1 billion. It serves nine states across the Northeast and Midwest.
  • Prosperity Bank:Prosperity Bank is headquartered in Houston and serves customers in two states: Texas and Oklahoma. It has $37.69 billion in assets.
  • Zions Bank:Headquartered in Salt Lake City, Zions Bank has more than $90 billion in assets. It serves 11 states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming.

Regional Banks vs. Community Banks vs. National Banks

Regional banks are essentially midsize banks. They’re too large to be considered community banks, but too small to be considered national banks. 

Regional Banks vs. Community Banks

The Federal Reserve clearly distinguishes between community and regional banks. A community bank is defined as one with less than $10 billion in assets, while a regional bank is one with $10 billion to $100 billion in assets.

But regional banks and community banks are likely to have other differences that may be more noticeable to customers. First, community banks may have fewer services than regional banks. They might offer many of the same deposit and lending products as regional banks, but they may not have investments or insurance.

Another difference often seen between community and regional banks is the size of the area they serve. Although they are not defined by this, regional banks do tend to serve larger geographic areas than community banks.

Regional Banks vs. National Banks

Unlike regional banks, national banks aren’t necessarily defined by their asset size. According to the federal government, a national bank is one whose charter is approved by the Office of the Comptroller of the Currency (OCC), is a member of the Federal Reserve System, and belongs to the Federal Deposit Insurance Corp. (FDIC).

Because of this definition, a regional bank could technically also be a national bank. But many people also refer to national banks as those that operate nationwide rather than in just one part of the country, as regional banks do.

If we consider national banks to be those that operate nationwide, then they are typically much larger banks with hundreds of billions or trillions of dollars in assets compared to the less than $100 billion in assets that regional banks have.

National banks may have a wider variety of personal and commercial products, including deposit accounts, and they may even offer corporate and investment banking services. These banks are more likely to be large household names like JPMorgan Chase, Bank of America, Citibank, and Wells Fargo.

Is It Better to Bank at a Regional Bank or a National Bank?

If you’re trying to choose between a regional or a national bank, you may find yourself wondering which is better for you. To answer that question, you’ll have to consider what you need from a bank.

Maybe it’s important to you that you can get all of your financial services at one bank and that you’ll be able to find a branch even when you’re on vacation. In that case, a national bank is probably better for you. On the other hand, if you prefer a bank that’s more community-oriented, with lower fees and local branches, then you might prefer a regional bank.

Is a Regional Bank Safe?

You also might wonder if a regional bank is safer or riskier than a national bank or a community bank.

In March 2023, the failures of Silicon Valley Bank and Signature Bank—both of which were major national banks—left customers wondering what would happen if a similar issue happened at a regional bank. The federal government quickly stepped in to respond to the failure of those, but would it do the same with a regional bank that may not be considered “too big to fail?”

If you have less than the FDIC insurance limits, which is $250,000 per depositor per account category at each bank, then you don’t have to worry about losing your money if your bank fails. That’s the case for both a major national bank and a regional bank.

The FDIC supervises banks to ensure that they aren’t taking on too many risks, and this includes regional banks. While it’s clear that the FDIC can’t always prevent a bank failure, it helps ensure banks are taking on an appropriate amount of risk so as to not put depositors’ money at risk.

The FDIC supervises banks to ensure that they aren’t taking on too many risks, and this includes regional banks. While it’s clear that the FDIC can’t always prevent a bank failure, it helps ensure banks are taking on an appropriate amount of risk so as to not put depositors’ money at risk.

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

How big are regional banks?

A regional bank is one that has more than $10 billion but less than $100 billion in assets. Regional banks can come in different forms, as some may serve just one or two states, while others serve many.

How do regional banks make money?

Regional banks make money in the same way as any other bank. First, they make money on the interest from the loans they offer. While they also pay interest on savings and other deposit accounts, there’s generally a spread that serves as the bank’s cut. 

Regional banks also make money on fees they charge. Regional banks often don’t charge as many (or as high of) fees as national banks, but they still are likely to charge some fees, including account fees, loan fees, overdraft fees, and more. Finally, banks make money from the interest earned on the securities they hold.

What are super regional banks?

A super regional bank is a type of regional bank, generally one with more than $50 billion in assets, that serves a large geographic area. Super regional banks aren’t necessarily defined in the same way as regional banks, and some banks that may not be considered regional banks under the Federal Reserve’s definition may be considered super regional banks.

Why do we need regional banks?

Regional banks serve an important role in the U.S. economy. Regional and other small banks provide important financial services that families and small businesses need, Treasury Secretary Janet Yellen said in a March 2023 statement. They have also helped with the economic recovery during the pandemic and have created competition in the banking sector.

How much of regional bank deposits are not insured?

The Federal Deposit Insurance Corp. (FDIC) insures up to $250,000 per deposit per account category at each bank. But many depositors have larger balances that aren’t fully insured. In fact, Wedbush Securities data reviewed by Investopedia shows that some regional banks have more than half of their total deposits as uninsured deposits. That shortfall could represent a significant amount of money that may not be recovered after a bank failure.

The Bottom Line

Regional banks serve an important role for consumers. For many people, their local regional bank provides all of the services they need. And these banks usually 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, as with any other bank, try to make sure your deposits are below the $250,000 threshold for FDIC insurance so that your funds will be fully protected. If you have more money to deposit, consider opening another account at another bank.

How big are regional banks?

A regional bank is one that has more than $10 billion but less than $100 billion in assets. Regional banks can come in different forms, as some may serve just one or two states, while others serve many.

How do regional banks make money?

Regional banks make money in the same way as any other bank. First, they make money on the interest from the loans they offer. While they also pay interest on savings and other deposit accounts, there’s generally a spread that serves as the bank’s cut. 

Regional banks also make money on fees they charge. Regional banks often don’t charge as many (or as high of) fees as national banks, but they still are likely to charge some fees, including account fees, loan fees, overdraft fees, and more. Finally, banks make money from the interest earned on the securities they hold.

What are super regional banks?

A super regional bank is a type of regional bank, generally one with more than $50 billion in assets, that serves a large geographic area. Super regional banks aren’t necessarily defined in the same way as regional banks, and some banks that may not be considered regional banks under the Federal Reserve’s definition may be considered super regional banks.

Why do we need regional banks?

Regional banks serve an important role in the U.S. economy. Regional and other small banks provide important financial services that families and small businesses need, Treasury Secretary Janet Yellen said in a March 2023 statement. They have also helped with the economic recovery during the pandemic and have created competition in the banking sector.

How much of regional bank deposits are not insured?

The Federal Deposit Insurance Corp. (FDIC) insures up to $250,000 per deposit per account category at each bank. But many depositors have larger balances that aren’t fully insured. In fact, Wedbush Securities data reviewed by Investopedia shows that some regional banks have more than half of their total deposits as uninsured deposits. That shortfall could represent a significant amount of money that may not be recovered after a bank failure.

The Bottom Line

Regional banks serve an important role for consumers. For many people, their local regional bank provides all of the services they need. And these banks usually 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, as with any other bank, try to make sure your deposits are below the $250,000 threshold for FDIC insurance so that your funds will be fully protected. If you have more money to deposit, consider opening another account at another bank.

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