How Many Community Banks Are There in the US?
Gain clarity on the presence of community banks across the US. This article quantifies their current standing and historical journey in the financial sector.
Community banks serve a distinctive role within the United States financial system. These institutions are characterized by their deep ties to local economies and communities. This article will explore the defining characteristics of community banks, their current numbers, and the historical trends that have shaped their presence over time.
Defining a Community Bank
A community bank is defined by its localized approach to banking and its commitment to serving the specific needs of its immediate geographic area. These banks focus on traditional banking activities, such as gathering deposits locally and extending loans to local businesses and individuals. Relationship-based lending is a hallmark of community banks, where decisions often rely on personal knowledge of customers and local market conditions rather than solely on standardized models.
Beyond their qualitative characteristics, community banks are also identified by their asset size. Regulatory bodies like the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) define community banking organizations as those with less than $10 billion in total assets. This asset threshold helps distinguish them from larger regional or national banks, which operate with significantly greater asset bases and broader geographic footprints.
Current Number of Community Banks
As of the second quarter of 2025, there were 3,982 community banks insured by the FDIC. The data is regularly collected and reported by the FDIC through its Quarterly Banking Profile, providing a snapshot of the banking industry. These institutions collectively manage a significant portion of the nation’s banking assets and loans, particularly for small businesses and agricultural sectors.
The count of community banks is derived from detailed regulatory reports that all insured financial institutions submit. This allows regulators and the public to track the composition of the banking sector. While they represent a large percentage of all banks, their share of total banking assets is smaller compared to larger financial institutions.
Historical Changes in Community Bank Numbers
The number of community banks in the United States has undergone a decline over the past several decades. From 1984 to 2020, the total number of commercial banks in the U.S. decreased by nearly 70 percent, falling from 14,376 to 4,404. This trend continued into the new millennium, with the number of community banks decreasing by almost 50 percent from over 8,300 in 2000 to 4,277 by June 2020.
Mergers and acquisitions have been a primary driver of this reduction, as smaller institutions consolidate or are acquired by larger banks. Bank failures have also contributed to the decline, contributing to net community bank charter attrition since the mid-1980s. Additionally, some community banks grow in asset size, eventually surpassing the $10 billion threshold and reclassifying into larger bank categories. While the pace of decline has varied, these factors collectively illustrate a sustained shift in the structure of the U.S. banking industry.