SIC 6022 State Commercial Banks
SIC 6022
This category includes commercial banks and trust companies (accepting deposits) chartered by one of the states or territories. Trust companies engaged in fiduciary business but not regularly engaged in deposit banking are classified in SIC 6091: Nondeposit Trust Facilities.
522110
Commercial Banking
522210
Credit Card Issuing
522190
Other Depository Intermediation
523991
Trust, Fiduciary, and Custody Activities
Despite a lackluster economy, the U.S. commercial banking industry remained healthy in the early 2000s. According to the Conference of State Bank Supervisors, 75 percent of all U.S. commercial banks are state chartered and 33 percent of all commercial bank assets are held by state banks in 2004. At the end of 2004, there were 5,743 state-chartered banks holding about $3.38 trillion in assets. Return on assets was 1.11 percent between 2000 and 2003 and rose to 1.52 percent during 2004. Return on equity for state-chartered commercial banks was also up, from 12.67 percent in 2003 to 13.85 percent in 2004. Total commercial banks' assets grew from $6.5 trillion in 2000 to $6.9 trillion in 2001, while assets at state-chartered commercial banks increased from $3.01 trillion to $3.08 trillion over the same time period.
The consolidation frenzy of the 1990s had lessened by the early 2000s, at least in part simply because the number of banks had been reduced rather dramatically. There were 7,598 total commercial banks in operation in the first quarter of 2005, down from 8,129 in 2002, and down dramatically from 18,769 at the end of 1975. Of the 5,743 state-chartered banks, 919 were members of the Federal Reserve System. These banks comprised about 12 percent of all insured U.S. commercial banks and held about 15 percent of all insured commercial bank assets.
In 2001, mergers and acquisitions totaled 376, compared to 475 in 2000. In addition, the number of new banks created in 2001 dropped to 149, compared to 217 in 2000.
As interstate banking restrictions gradually disappeared, the reach of large national commercial banks expanded rapidly, moving across state borders and swallowing smaller banks, which found it increasingly difficult to remain profitable in the face of competition from their more leveraged competitors. The 445 largest commercial banks—those with assets of more than $1 billion—accounted for 87 percent of the banking industry's total asset base of $8.6 trillion (as of March, 2005), with the vast majority being controlled by the top 50 bank holding companies, By 2002, nearly 70 percent of all commercial banking assets were controlled by the 50 largest bank holding companies, many of which operated in more than one state; only a small handful of banks were engaged over state lines in 1980.
The challenge remained for state banks to prove capable of providing a range of new financial services in conjunction with their traditional operations while fending off competition from superregionals and foreign bank branches seeking to take advantage of more open financial markets to encroach on state banks' customer bases.
Despite the increasingly relaxed regulatory climate, U.S. state commercial banks are subject to a range of regulations at the state and federal level. In addition to the federal regulatory bodies that oversee national banks, each state has a system of supervisory bodies charged with the chartering and regulation of state commercial banks. These diverse structures and organizations are responsible for regulating the state's banking industry in a manner that is most appropriate for the financial, economic, and social environment of the state.
Historically, there were advantages to be found for banks in the multiplicity of rules and regulations state to state. At one time, for example, Minnesota was among the few states to allow its banks to sell insurance. Meanwhile, Texas once barred branch banking, so than any bank building had to exist as its own corporation with its own board of directors. While such differences smoothed out to a great extent, thanks to interstate banking deregulation in the 1980s and 1990s, enough perceived differences remained, in the form of tax incentives and loose restrictions, to convince many banks that it was still advantageous to be chartered by a state rather than by the federal government.
Commercial banks, which are organized primarily to conduct general banking business, are most often state or national banks. State banks are organized under a charter granted by the state government, while national banks are organized under charters issued by the Comptroller of the Currency of the United States. Many institutions that are chartered as trusts offer services that are generally considered commercial banking, while many banks also offer trust and savings services. These institutions and operations are also included under the commercial banking category.
The regulation of banks on the state level is delegated to a banking authority in each state. These bodies exercise primary and additional regulatory powers. There are four primary bank regulatory powers: new bank charter approval, new branch or separate facility application approval, cease and desist orders, and officer removal orders. There are also four additional state bank regulatory powers: power to fine, power to order affiliate...
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