Super Regional Bank

What Is a Super Regional Bank?

A super regional bank is a mid-sized financial institution that has a significant presence in a geographical region across multiple states. It is similar to a large national or global bank in terms of assets, revenue, and scale of activities, but does not operate on a global level.

Understanding Super Regional Banks

Super regional banks are much bigger than regional and community banks and operate across multiple states or regions within a country. Because of this, super regional banks can be thought of as occupying the middle tier of the banking sector between regional/community banks and global banks.

These banks generally offer a complete range of banking services from deposits and loans to securities brokerage, investment banking, and fund management. Some super regional banks started out as regional banks, then expanded across state lines by acquisitions of deposits, branches, and customers.

Though the super regional category typically refers to banks with more than $50 billion in assets, size alone is not enough criteria to determine whether a bank can be considered super regional. Super regional American banks include U.S. Bancorp, Bank of New York Mellon (BoNY), CapitalOne, KeyCorp, PNC Financial Services Group, and BB&T Corp.

While super regionals are significantly smaller and present less systemic risk than money center banks (e.g., Citibank, JPMorgan, Bank of America), they have been affected by tightened financial regulations following the financial crisis. Congress passed the Dodd-Frank Financial Reform and Consumer Protection Act in 2010. The legislation period increased minimum capital requirements and mandated regular liquidity assessments and stress testing by the U.S. Federal Reserve, for banks deemed to be "too big to fail."

Super regional banking institutions have expanded their service offerings in recent years to include and or broaden the number of capital markets and investment banking activities they engage in. Some super regionals have grown significantly by taking over smaller rivals and taking market share from the community and regional banks.

Many have also expanded geographically and grown aggressively through deal-making. KeyCorp and BB&T in particular, have added hundreds of branches and significant additions to their asset base through mergers and acquisitions.

Systemically Important Financial Institutions (SIFI)

The threshold to be included on the SIFI list was $50 billion in assets. As a result, many super regionals experienced more regulatory constraints and compliance requirements. Then, in 2018, following a wave of complaints from smaller banks struggling to handle the costs of complying with enhanced regulation, Dodd-Frank Act was partially rolled back.

This increased the SIFI threshold to $100 billion and then all the way up to $250 billion in assets 18 months later. While the largest super regionals (e.g., PNC and BoNY) will still fall into the SIFI category, smaller banks such as KeyCorp and BB&T will no longer be considered to be SIFI.