Regional bank

What is a regional bank?

A regional bank is a bank with a primary market in a regional or metropolitan area but takes deposits from throughout the state in which it is located. It is typically more expansive than a community bank, but more restrictive than a national financial institution.

Deeper definition

Regional banks fall between local community banks and larger “big banks” in terms of their size and capabilities.

Since a regional bank is larger than the community bank in the center of town, it typically offers more services and has better ranking as a lender.

However, the regional bank also has the advantage of more cultural acceptance as a competent financial center that’s still able to adequately represent its patrons without becoming impersonal like a big bank might seem.

Though regional banks do fall somewhere in the middle of the spectrum of bank size, and loan and service offerings, there is some disagreement about what exactly a regional bank is. Because of this disagreement, it cannot be said that regional banks always offer a specific set of services.

However, it can be helpful to designate the regional bank by some key indicators:

• It serves a specific geographic region.
• It surpasses the community bank by possessing at least $1 billion in assets.
• It is somewhere below the ranking for a money-center institution by possessing less than one trillion dollars in assets.
• Its loans and deposits are derived from neighboring states rather than a single state or the entire nation.

Banks that meet the above qualifications are generally considered by the Federal Deposit Insurance Corp. as regional banks.

Regional bank example

If you live in the Northeast and do your banking with an institution that services your state and the surrounding states, you probably are working with a regional bank.

Some of the largest regional banks in the U.S. include Capital One, PNC, US Bancorp, BB&T and SunTrust Bank. Though these banks offer some national services, particularly through their credit products, they still fall into the designation of regional banks, due to their holdings and the regional limits of their primary markets.

Want to learn more about the differences between a community bank and national bank? Check out this comparison of community banks and big banks.