Think mortgage math is complicated? Many in the nation are focused on air conditioning. Why is it measured in tons? It harkens back to the days of using ice, and a “ton” measures how much heat, removed by the system, would be needed to melt 2,000 pounds, or one ton, of ice in a 24-hour period. The result is then expressed in BTUs per hour. It takes 288,000 BTUs to melt a ton of ice in 24 hours, or 12,000 BTUs per hour. 1 BTU/hr. = 0.00029307107 kWh. And the average residential electricity rate in the U.S. is about 23 cents per kilowatt-hour (kWh). When you see your utility bill in the mail, don’t think about me. Maybe the math in a company acquisition is more straightforward. I mention this since ICE and Black Knight have agreed to sell Optimal Blue to Constellation Software in an effort to get regulatory approval for their merger. Constellation Software is already buying Empower and will purchase OB for $700 million paid for in $200 MM cash and a $500MM promissory note. Meanwhile, plenty of branch-level acquisitions are occurring that don’t make the headlines and will continue. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with Seth Sprague and James Brody on the wave of loan-repurchase requests from Fannie Mae and Freddie Mac that represents another threat to lenders’ balance sheets.)
Lender and Broker Software, Services, and Products
With first mortgage rates rising and inventory dropping to record lows, many lenders are looking to turn up the volume on their HELOC business. Many of these lenders have begun aggressively advertising these solutions, many even announcing “HELOC Promos” on billboards, marques, and in digital advertising. In other words, the HELOC market is starting to heat up, and your competitors are beginning to make a big grab for this business. Don’t let them get to your borrowers before you do! With Symmetry, you can offer your borrowers one of the best, most competitively priced HELOC options on the market. Let Symmetry help you present this solution to your borrowers before they go somewhere else. Contact your Area Manager today!
Verus Mortgage Capital recently launched a Closed End Second Lien Mortgage program to help lenders capitalize on the more than $18 trillion of tappable home equity in the U.S. Verus’ new program is the perfect solution for borrowers who don’t want to refinance their home but want to take advantage of the equity they’ve amassed. In this competitive environment, non-QM can be a new revenue channel for originators, one that enables you to meet the needs of borrowers who need more flexibility, people with nontraditional income, those who are investing in properties, foreign nationals or borrowers seeking an interest-only payment option. Interested in serving more applicants with non-QM? Meet with Verus at the Western Secondary Market Conference Aug. 21-23 to learn more. Contact Jeff Schaefer, EVP – National Sales at 202-534-1821.
The Work Number® can help streamline processes and provide greater value to income and employment verification processes. Wider data coverage can help streamline lending processes, and the standard Mortgage VOE and Mortgage VOI solutions from The Work Number are now available with the option for a receipt. The Work Number is the largest commercial repository for consolidated income and employment data with access to 618 million INSTANTLY returned records, updated each pay cycle, provided directly by employers and payroll providers. Lenders and brokers have a choice: access The Work Number directly from Equifax OR through our pre-built integrations with over 60 Point of Sale (POS) and Loan Origination Systems (LOS). Gathering all of the necessary information about potential borrowers through your LOS or POS is quick and efficient and can eliminate the need to swivel back and forth between systems, juggling multiple logins.
BSI Financial Services extends Sagent partnership for seven years! Sagent is thrilled to announce the recent expansion of its partnership with BSI Financial Services (BSI) for another 7 years. As BSI looks to grow its servicing operation to 1M loans, Sagent will continue to power BSI with its configurable, cloud-based platforms including LoanServ, TEMPO, Datascape+, and LoanBoard. BSI’s great reputation and growth is because they’ve mastered things like automating complex tasks, solving customer issues fast, and adapting in real-time to regulator and investor needs. Sagent takes this crucial role in helping BSI very seriously, and they are excited to continue building with the BSI team! Read Sagent/BSI partnership details here.
“According to ATTOM, foreclosure filings were up 7% in May and 14% from a year ago. Managing an REO portfolio requires a strategic and systematic approach to ensure effective management and maximize returns. The team at Consolidated Analytics delivers one of the most comprehensive asset management solutions to streamline your REO process and satisfy the most stringent investor and client requirements combining a seasoned team, advanced tech and management platforms, and access to a nationwide network of REO professionals. Our team delivers from post-foreclosure through marketing and final disposition with proven strategies to streamline the asset management process, meet SLAs, accelerate turn times, and maximize returns. Contact [email protected] to help make more informed decisions and achieve portfolio management goals.”
There are so many things we’d rather put off in life: stumbling to the gym at 5 a.m., eating our broccoli, preparing tax returns. But avoiding pain in the present doesn’t set us up well for the future. It’s the same for lenders looking to make a strong rebound when today’s cold originations market starts heating up again. Black Knight held discovery sessions with dozens of banks, credit unions and independent mortgage bankers who all agreed: the time to invest in your mortgage technology is now. Click here to read why competitive lenders will likely be the ones who seize this market moment and prepare themselves now to be ready for the future, even though it might be uncomfortable in the short term. Then contact Black Knight when you’re ready to see how you can be prepared for whatever the market throws at you next.
Podcast Alert! Tune into HousingWire’s Housing News podcast featuring Wolters Kluwer’s VP of Banking Compliance Solutions Simon Moir and HousingWire’s Clayton Collins. With more than 20 years of experience in the banking and financial services industry, Simon shares valuable insights on the relationship between AI and regulatory powers, and the changing dynamics in the fintech world and investor strategies. Don’t miss this key conversation exploring the future of technology, regulations, and finance. Tune in now for valuable industry perspectives.
When Premium Mortgage Corporation set out to replace its Point-of-Sale system, Premium chose LiteSpeed by LenderLogix. Amazing borrower experience. Immediate ROI. Seamless integration into Encompass® by ICE Mortgage Technology™. The best part, the results speak for themselves: Check out its experience here.
Capital Markets
The secondary markets are incredibly complicated, especially what happens “behind the scenes.”
Don’t forget that MISMO, the real estate finance industry’s standards organization, announced that the Private Label Residential Mortgage-Backed Securities (PL RMBS) Specification has reached “Candidate Recommendation” status, which means that it has been thoroughly reviewed by a wide range of organizations and industry participants and is available for use across the industry and should lead to a more efficient process for private label residential mortgage-backed securities. The MISMO PL RMBS Specification provides a standard and defined set of data that can be used by the rating agencies to help determine the ratings applied to securitizations. The tools are designed for parties that support the submission of the current ASF and supplemental mapping specifications to the rating agencies. They will provide lenders, rating agencies, third-party reviewers, and technology solution providers with the necessary information to update their systems with the revised data from the MISMO PL RMBS or flat file layout.
And while you’re not forgetting, last month Ginnie Mae announced, in All Participants Memorandum (APM 23-09), that it is extending the use of electronic signatures in conjunction with Remote Online Notarization (RON) to include power of attorney (POA) mortgage documents. All Ginnie Mae Issuers can now use RON to execute POA documents when necessary to obtain Single-Family government insured or guaranteed loans on “paper” mortgages.
By extending digital capabilities to include POA mortgage documents, Ginnie Mae is modernizing its Mortgage-Backed Securities (MBS) program with flexibility that benefits our Issuers and borrowers. Issuers must continue to follow all insuring or guarantying agency guidance regarding POA eligibility and requirements, including the circumstances under which a borrower is permitted to use an attorney-in-fact to obtain Single-Family government insured or guaranteed loans. By using RON for POA, Issuers are subject to the electronic signature and notarization requirements outlined in chapter 24 of the MBS Guide. Please refer to APM 23-09 for more information regarding the requirements.
In bond market activity, which changes every day, bets are growing that central banks are winning their battle against inflation without driving economies into deep recessions. Goldman Sachs lowered its probability of a U.S. recession over the next 12 months to 20 percent from 25 percent yesterday, and ECB Governing Council member Knot suggested that additional rate hikes after next week are uncertain. Investors also received a weaker than expected Retail Sales report for June (actual 0.2 percent, expected 0.5 percent), with gasoline a big driver of the decline. Figures are not adjusted for inflation, and on a year-over-year basis, sales rose 1.5 percent. We’ve also received better-than-expected Q2 earnings from big banks such as JP Morgan, Citigroup, and Wells Fargo. Manufacturing took a step back in June, though Treasuries and MBS prices showed no significant response to that below-consensus June Industrial Production report (actual -0.5 percent, expected flat).
“Risk-on” sentiment has taken hold over the last couple of weeks, meaning investors are favoring stocks following softer-than-anticipated consumer and producer price data in June that has optimism abounding over inflation continuing to soften and the economy avoiding a recession. CPI dropped precipitously to a 3.0 percent annualized rate in June from 4.1 percent in May. Producer price increases are also slowing with core PPI up 2.6 percent from one year ago. Core CPI remains at a still robust annualized pace of 4.8 percent, albeit down from 5.3 percent in the previous reading. Yes, inflation is still above the target of 2 percent, but bets are that the 25-basis point rate hike on July 26 that lifts interest rates to a 22-year high will be the last as the Fed reaches a terminal target rate of 5.50 percent. Then begins the waiting game, as the tight U.S. labor market is key for long-run inflation considerations.
Today’s economic calendar kicked off with mortgage applications from MBA. Including an adjustment for Independence Day, Mortgage applications increased 1.1 percent from one week earlier, which was not entirely unexpected following last week’s Treasury rally after both CPI and PPI came in softer than expected. During the reporting period, the 10-year yield fell more than 20 basis points, with the 30-year mortgage rate tumbling even more (25 basis points, to 6.89 percent, according to Mortgage News Daily).
We’ve also received housing starts (-8.0 percent at 1.434 million) and building permits for June (-3.7 percent to 1.44 million). Expectations were for 1.455 million starts and 1.525 million permits versus 1.631 million and 1.496 million previously. Later today brings a Treasury auction of $12 billion reopened 20-year bonds. We begin the day with Agency MBS prices about .125-.250 better than Tuesday evening, the 10-year yielding 3.73 after closing yesterday at 3.79 percent, and the 2-year at 4.70.
Employment
While most people are struggling in this market, there are still some lenders growing and adding to their leadership team! A national IMB located in the Dallas/Fort Worth Metroplex is looking to add a Chief Financial Officer, a Head of Capital Markets, and a Chief Compliance Officer with Ginnie Mae/Agency securitization experience to its team. Must have direct experience working in a securitization heavy environment. NonQM is a plus. If you are interested, please email Chrisman LLC’s Anjelica Nixt to forward your confidential note/resume.
“Job boards and careers pages can produce applicants, but are they quality candidates? Our team at Pezian Search Group are Talent Experts within the Mortgage, Banking, Credit Union, Title & Escrow and Financial Services spaces from the C-Suite to the Call Center, Front Office, Bank Office, Operations, Sales, Marketing, and everything in between. That means that we understand the industry and take the time to properly discuss important items with candidates such as backgrounds, skill sets, experience, growth objects and more. This ensures that there is a long-term fit and that we are providing our nationwide network of Clients quality candidates every time. We’ve set ourselves apart from our competition, career pages and the traditional job boards, all while offering a full satisfaction guarantee. To learn more, email our team, follow us on LinkedIn, and review the opportunities that we currently have available throughout the country.”
“Micah Parsons, linebacker for the Dallas Cowboys and the 2021 NFL Defensive Rookie of the Year, recently signed a two-year partnership with SWBC to join us as a spokesperson and brand ambassador. He is a natural fit for SWBC, as his commitment to excellence and drive to make a difference within the community align with our goal of inspiring hope where we live and lend. Micah is an exceptionally talented individual, and we’re excited to work with him to help hopeful buyers tackle their homeownership goals. SWBC Mortgage has big goals and is looking for those who can help us reach them. We combine innovation with personal interaction, empowering our loan officers to serve the communities where they live and lend. Contact us to learn more about how our unique setup helps maintain LO compensation and pricing. Contact James Clark, Director of Strategic Growth or visit us here.
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Efficiency, Fulfillment, Correspondent Products; Offices Into Housing; Capital Markets
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Efficiency, Fulfillment, Correspondent Products; Offices Into Housing; Capital Markets
By: Rob Chrisman
Mon, Jul 17 2023, 10:25 AM
I am often asked about the jumbo segment of our business. Frankly, aside from the coasts and a couple cities in-between, much of the nation is not overly concerned with it. Paying $1 million or more for a house may seem excessive to most Americans, although that doesn’t mean million-dollar homes aren’t prevalent in some parts of the U.S. Per LendingTree, only an average of 6.68 percent of owner-occupied homes in the nation’s 50 largest metros in 2021 were valued at $1 million or more. The share of million-dollar homes has grown: That’s up from an average of just 4.71 percent of owner-occupied homes in the nation’s 50 largest metros in 2020. San Jose (66.3 percent) and San Francisco, CA (52.9 percent) have the largest share of million-dollar homes, the only two cities where most homes are worth at least $1 million. Including San Jose and San Francisco, the four metros with the highest percentage of million-dollar homes are in California. Only four metros (Buffalo, NY, Cleveland, Pittsburgh and Louisville, KY) have fewer than 1.00 percent of owner-occupied homes valued at $1 million or more. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with Richey May’s Nathan Lee on outsourcing considerations and changing fixed costs into variable costs.)
Lender and Broker Software, Services, and Products
“Citi Correspondent Lending remains dedicated to serving diverse markets as well as continued responsible, sustainable growth. With a growing product suite that includes our new HomeRun program (no MI, up to 97% LTV and as little as 1% borrower down payment contribution required), a robust set of CRA pricing incentives and a quality-focused pre-purchase loan review process, Citi is well positioned to help you grow your business. Complete our Prospective Correspondent Questionnaire or request an appointment to talk with a Citi Account Executive at the Western Secondary Conference next month. We would welcome the opportunity to chat with you about all that Citi Correspondent Lending has to offer.”
If you’re looking for ways to squeeze every dollar out of each loan transaction, check out Computershare Loan Services (CLS). You can turn your fixed costs into variable expenses by outsourcing your processing, underwriting, and closing to CLS’ originations fulfillment team. They maintain top-tier POS, LOS technology, and a robust compliance program that keep you one step ahead. CLS’ money-saving solutions continue! Membership in their mortgage cooperative gives you exclusive access to negotiated pricing on commonly used mortgage services like VOI, flood determination, and trailing doc solutions. They do the hard work, uncovering best-in-class services that positively impact lenders. You’re one call away from savings that could dramatically improve your bottom line. Contact Computershare Loan Services today.
Blend has always put borrowers at the forefront of their mortgage products. KeyBank, a regional bank that’s been around for nearly 200 years, knows that customers are the backbone of their business too. And with modern mortgage expectations, they needed a modern mortgage solution. Learn how KeyBank’s partnership with Blend improved their NPS scores, operational efficiency, and LO adoption in this case study.
Sleep in Your Office? What About the Vacant Homes Conspiracy?
Before “van life” people would occasionally sleep in their offices. But what about making the office into a place to sleep?
There’s an anomaly facing major cities in the U.S.: many office buildings are empty while housing is in short supply. There has been a lot of talk of simply converting large offices into more apartments, but it’s much more difficult than it seems. Conversions are possible, but real estate developers face a variety of physical, regulatory, and financial constraints. Zoning restrictions and regulations restrict alterations and limit the scope for office-to-residential conversions. Structural complexity and code requirements mean that not all buildings are conducive for repurposing (e.g., ceiling height, access to lighting, plumbing considerations, etc.), and many structures have to be reinforced with more steel. Repurposing is often an expensive process that comes on top of initial acquisition costs, and ultimately will not save or make any money.
High costs require high rents to offset, meaning that most office conversions tend to cater to the luxury segment of the market and won’t help to alleviate a shortage of affordable housing in the city. Finally, as the status of remote work remains in flux, there’s a big question mark over the desirability of these conversion projects in the first place.
While we’re talking about inventory solutions, Chris Maloney with BOKF had some recent thoughts on people who look at the level of vacant single-family homes “that are, to them, evidence of a nefarious plot by speculators to hold supply off the market, drive prices higher and then sell at an even greater profit.” “There are a number of problems with this viewpoint, the most evident being that the total of vacant houses in these United States is currently far below its historic average.
“Except that of the 145 million or so housing units in the country, only about 15.1 million (or 10.4 percent of total housing stock) are vacant, which if it were proportionate to what the average has been this millennium (12.7 percent of total housing stock) would mean we’d have about 3.3 million more vacant homes than we currently see. The supply of vacant homes, like everything else in the housing market, is scarce. And of the 15 million housing units that are vacant, the Census Bureau number crunchers estimate only about 3.6 million fall into the ‘other’ category where speculators reside, and of that 3.6 million only about 227,000 fall into a sub-category (such as “preparing to rent/sell”) which points to the unit being readied for a near-term sale.
“Bottom line, it does not appear (at the national level) that speculators holding homes off the market, waiting for a better selling point, are the cause of the housing crisis. Of course, an institutional investor can concentrate its fiscal firepower onto specific areas, but even if they do the question here comes down to private property. If someone buys a home and wishes to take the risk of holding it off the market until they decide it’s the right time to sell, that is their right as it is their house, not society’s.” Thank you, Chris.
Capital Markets
Where to start with last week? Upbeat quarterly earnings reports on Friday from three of the largest U.S. banks capped a week in which almost everything rallied in markets. JPMorgan Chase, Citigroup, and Wells Fargo all reported above-consensus results to kick off the Q2 earnings season. However, the main economic headline over the last week was the continued deceleration in inflation, as core CPI was below 5 percent for the first time since November 2021. Consumer prices rose 0.2 percent in June and core CPI increased 4.8 percent from one year ago as durable and nondurable goods saw price declines. U.S. inflation is down from its peak of 8.9 percent, and suddenly “disinflation” is the buzzword on trading desks.
While the lower inflation numbers were welcomed by the markets, the Fed is still expected to increase the federal funds target following its next meeting on July 26. The committee is likely to feel validated that tighter monetary policy is slowing inflation while economic growth has not turned negative. Housing costs may continue to be a headwind in the Fed’s fight to get back to 2 percent inflation as higher interest rates not only reduced demand as intended but have also severely limited supply which has buoyed home prices. For those thinking that the Fed is done hiking rates, Fed Governor Waller said on Friday that he expects two more rate hikes this year.
This week kicks off with a limited calendar that consists of just NY Fed manufacturing for July. Data and supply pick up over the remainder of the week and include June retail sales, June industrial production/capacity utilization, May business inventories, and July homebuilder sentiment tomorrow, June housing starts and permits on Wednesday, and July Philly Fed manufacturing, June existing home sales, June leading indicators, and $17 billion in new 10-year TIPS on Thursday. After the 10-year U.S. Treasury yield dropped 23 basis points over the course of last week to 3.82 percent, in the early going to start the week, Agency MBS prices are better about .125 versus Friday, the 10-year is yielding 3.78, and the 2-year is 4.72.
Employment
Black Knight is hiring an MSR Account Manager in its Optimal Blue division. This person will be responsible for helping clients with strategies related to mortgage servicing rights valuation and hedging, whole loan valuations, and more through the employment of industry-leading, proprietary analytics. This position is available in Chevy Chase, Md., Denver, Colo., and San Francisco, Calif. For more details on this role, contact Betsy Meek. In addition, Black Knight is always looking for talent across many roles. Visit BlackKnightInc.com/Careers for a full listing of all open positions.
Recently named by Euromoney.com as the Best U.S. Super Regional Bank in 2023, Citizens is garnering attention for its clear vision, strong leadership and disciplined execution. With the recent strategic acquisitions of HSBC branches and Investors Bancorp., making it geographically complete, Citizens is looking for talented salespeople (managers, loan officers, account representatives) in all three mortgage lines of business – Retail, Wholesale and Correspondent businesses throughout the Northeast, MidAtlantic, Midwest and Florida. Our deep product mix allows us to help many different loan needs, from affordable loan programs such as HomeReady to a best-in-class one-time close construction to permanent product, Citizens has what you need to succeed. Our specialty loan programs such as condo/co-op financing, rate protection programs with extended rate locks, along with an amazing Private Wealth discount value proposition for high net worth banking clients, ensures you have all the tools to win in this challenging market. To learn more, contact Sean Reilly or visit here.
Nations Lending continues growth, expanded opportunities for producers! Nations Lending is continuing its growth with multiple in-house product offerings, creating a world of opportunities for its origination team nationwide. The company’s dedication to servicing almost all its agency business and its licensure in all 50 states highlights its commitment to building the businesses of its loan officers. This proves true with the expansion of its recent product offerings: RIO and ACE. RIO is the company’s DSCR product (underwritten in-house), which eliminates proof of employment or income verification, services LLCs, and caters to short-term rentals. With ACE, borrowers complete their loan application and receive financing approval before initiating the homebuying process, varying largely from traditional pre-approval methods. Corey Caster, EVP of National Production says, “We know the headwinds originators are faced with today and our goal is to give them as much ammunition as possible. Every day our Leadership Team is focused on how we can improve our platform.”
“At Guaranteed Rate Affinity we believe our loan officers need the perfect combination of technology and human touch to succeed in this market. Not only are we a fintech organization but we focus on memorable experiences to drive loan officers’ personal branding. We have a dedicated events team to support our loan officers in the creation of these experiences that will leave a lasting impact. Build your business by leveraging the power of events to make connections and partnerships organically and stay top of mind in your community. Your Events Coordinator will take care of everything from start to finish, all you have to do is host your referral partners and clients. Learn more about what sets us apart. Contact Tim McGraw to get started.”
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Broker and LO Scorecards, Escrow Mgt., Homebuyer Products; How Many Borrowers are at Less Than 4 Percent?
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Broker and LO Scorecards, Escrow Mgt., Homebuyer Products; How Many Borrowers are at Less Than 4 Percent?
By: Rob Chrisman
Mon, Jul 10 2023, 10:05 AM
“The world is going to come to an end tonight at midnight. Tune in tomorrow to see if it did!” Sensationalist headlines or bad predictions are tiresome at best, misinformation at worst. There is actual news, however. For example, thank you to the Knowledge Coop’s Ken Perry who sent along the latest in the Matter of ICE and Black Knight. LOs and underwriters know that the Supreme Court overturned the Biden administration’s student-debt forgiveness plan which would have wiped off $430B in loans from the government’s books, and people who worked hard to pay off their debt cheered. Although there are already some alternatives that are in the making, this carries huge implications for inflation, consumer discretionary spending, and the distribution of wealth in the U.S. In other news, the latest update on inflation in the U.S. is this week with June’s Consumer Price Index report. Economists forecast headline inflation to fall to 3.0 percent from 4.0 percent in May and core inflation to be reported at 5.0 percent from 5.3 percent in May. A CPI surprise could reset expectations on the direction of the Federal Reserve. The market is pricing in a 90 percent probability that the Federal Reserve will raise rates by 25 basis points at the July 25-26 meeting. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, incentive compensation, and business intelligence. Hear an interview with Stavvy’s Kosta Ligris on the benefits of Remote Online Authorization (RON) and advances from Ginnie Mae’s recently published All Participants Memorandum.)
Lender and Broker Software, Services, and Products
On Nov. 15, millions of fans endured what felt like “several bear attacks to purchase Taylor Swift Eras Tour tickets on Ticketmaster’s flailing website. Don’t let your customers suffer the same fate as Swifties as they try to purchase their ticket to homeownership. SimpleNexus, an nCino company, enables you to extend a modern mortgage experience with the convenience of a single-sign-on portal where homebuyers can manage their search listings, complete their mortgage application, and sign closing documents from anywhere. See how SimpleNexus can give your business a leg up with modern mortgage technology that elevates the borrower experience and enhances efficiency by scheduling a demo.
“At NexBank, we are committed to our clients’ success by offering highly competitive products and services in Wholesale and Correspondent Lending, Warehouse Lending, and Treasury Management including Escrow Deposit Management. NexBank’s business is focused on residential housing and driving growth through our TPO channels. Our teams have been built to serve the TPO market. We do not compete with our clients for retail originations or refinancing business and are dedicated to their growth and invested in their success. NexBank offers unique products and competitive rates, and exceptional client service is our mission. To ensure our clients’ experience is simple, fast, and efficient, we are excited to announce that we have hired two new account executives to our strong and experienced sales team: welcome Adelfo Emanuele and Wendy Papaj! To learn more, visit us at the NAMB National Annual Conference this September or contact us today. Member FDIC, Equal Housing Lender, NMLS 672886.”
Mortgage professionals in the market for new technology know that buying new solutions is only the start; it’s getting them implemented without missing a beat that’s critical. That’s why Black Knight held discovery sessions with dozens of lenders to see how they implement new solutions while keeping business disruptions to a minimum. Read Black Knight’s new blog ‘You’ve Selected the Tech – Here’s How You Avoid a Failure to Launch’ to see how 32 decision-makers at lending organizations of all sizes handle their deployments. You’ll learn the ways you can build your own strong rollout plan before implementation starts, and how your own employees can actually make deployment go smoother. Read the blog today, then talk to Black Knight when you’re ready for proven mortgage solutions with white-glove implementation.
Grow that Pipeline with LoanStream’s Summer Specials on Non-QM and Government. Includes Price Improvements on FHA, VA, Select Government loans. Plus, Specials for Non-QM includes Full Doc, Alt Doc and DSCR. Here for a limited time so don’t wait, contact your Account Executive for full details as restrictions apply, or visit here. Plus, MaxONE DPA programs are now available in Massachusetts! Finance up to 100 percent CLTV with 600 Min FICO. Contact your AE to learn more.
Roller coasters are usually a thrill, but the people stuck upside down for nearly 3 hours last week on a Wisconsin ride might disagree. Similarly, mortgage production volumes have had lenders on a roller coaster lately and it’s one we never wanted to be on in the first place. As production levels out, do you know how your recent performance compares to that of your peers? Find out right now with MMI’s monthly Mortgage Industry Benchmarks newsletter, which lets lenders and LOs compare their recent performance to their peers via production-based tiers. Are you on the same track as your competition or are you on a completely different ride? Sign up for MMI’s monthly newsletter to find out!
Is your focus to do more with less? A business intelligence solution should highlight where there are opportunities to incorporate efficiencies and reduce costs. The most forward-thinking industry leaders are turning to Richey May’s RM Analyze to learn what they need to know now more than ever: how to operate even leaner. It’s half the cost of a full-time employee, and you gain access to a strong bench of talent with a rich background in the mortgage industry and access to hundreds of reports, including real-time peer benchmarking data, in no time. With these insights you can make meaningful decisions for your business and do more than just survive. Learn how to operate leaner.
Learn the process that enables lenders to more than double their average AE monthly loan volume. Wholesale lenders need efficient broker account policies to ensure the success of their Account Executives. Managing a sales force responsible for engaging with tens of thousands of mortgage brokers while competing with larger and more technologically advanced competitors requires a sound and scalable process. OptifiNow’s Mortgage Broker Scorecard shows wholesale lenders how to build a highly efficient sales process that guides the right AE to call the right broker at the right time. Download the Mortgage Broker Scorecard for free today!
Current Temperature of Housing Prices and Residential Lending
Black Knight’s monthly Mortgage Monitor is out this morning. “The housing market showed clear signs of reheating in May, with the seasonally adjusted Black Knight Home Price Index hitting an all-time high. The fifth consecutive month of growth, May’s 0.7 percent M/M gain is equivalent to an annualized rate of 8.9 percent, despite the backward-looking year-over-year growth rate currently hovering at 0.1 percent. If the rate of growth we’ve seen over the past few months continues, annual growth would remain at or near 0 percent for just a short time before inflecting and trending sharply higher. Home price gains over the past five months have now completely reversed the declines the market experienced last fall. In fact, 27 of the 50 largest markets and the US have returned to their prior home price peaks or set new highs this spring. It all comes down to inventory, and for-sale listings have deteriorated in 95 percent of major U.S. markets this year, leading to some dramatic swings in home price trends.
“Meanwhile, more than 60 percent of existing mortgage holders (thus potential sellers) are sitting on first lien rates below 4 percent, with significant disincentive to list in this high priced, low inventory, high-rate environment. High rates and their impact on affordability are simultaneously doing a number on demand: the monthly P&I payment on the average home purchase hit an all-time high in May. And just this week, rising rates made this the least affordable housing market in 37 years. Here is the full report.”
Capital Markets
Friday, we digested the latest nonfarm payrolls report following hotter than expected private hiring data the previous day. The U.S. government report showed the economy created 209,000 jobs in June, well below expectations and the smallest increase since the end of 2020. The data was taken by some as a sign that the Federal Reserve’s interest rate hikes were finally starting to cool the labor market, but other details of the report such as stronger than forecast wage gains suggested the Fed may have reason to resume raising rates later this month.
Yes, the main headline to close last week was that U.S. job growth (+209k for June) was solid but came up short of expectations and well short of the estimate of 500k of new payrolls seen in Thursday’s ADP Employment Change report. While the pace of hiring has slowed, 2023’s average monthly job gains are currently at 287,167, which still outpaces all pre-pandemic years going back to 1997. The June employment report was the first employment report to come in below forecast over the last 15 months but stronger-than-expected wage growth for June is likely to keep the Fed on track to raise interest rates July 26.
Wage inflation is the Fed’s biggest concern, staying at a plateau for the past several months after declining in the second half of 2022, meaning there’s still some ways to go to get back to a level the Fed is comfortable with. June average hourly earnings were up 0.4 percent, meaning that over the last 12 months, average hourly earnings have risen 4.4 percent, versus 4.4 percent for the 12 months ending in May. Jobs growth may have slowed but remains too strong and wage pressures are still too strong to justify an extended Fed pause. Pre-pandemic, average hourly earnings were increasing at around 3.5 percent.
This week’s calendar contains plenty of market moving potential including the $90 billion mini-Refunding over Tuesday to Thursday, with updates on consumer prices for June (expected to rise 3.1 percent year over year), producer prices, and many Fed speakers scattered throughout the week. In addition, earnings get under way with JP Morgan, Citigroup, Wells Fargo, and State Street reporting on Friday.
Today’s calendar gets under way mid-day today with the non-market moving May Employment Trends Index and wholesale inventories and sales for May. The afternoon brings May consumer credit and remarks from San Francisco Fed President Daly, Cleveland Fed President Mester, and Atlanta Fed President Bostic. We begin the week with Agency MBS prices roughly unchanged from Friday night, the 10-year yielding 4.07 after closing last week at 4.05 percent, and the 2-year at 4.91.
Employment
“Equity Resources is an independent/ privately-owned mortgage banker that is proudly celebrating our 30th anniversary! Our longevity and continued success are quite simple; we listen to, invest in, and develop our team members! In a slower market, we cross-train our team, we do not lay them off. “Improving the lives of families” is our core purpose and this begins with all our team. While uncertainty and concern are running rampant in the mortgage markets, we are creating opportunities for our award-winning loan officer team! Equity Resources is actively seeking focused loan officers throughout our 19 footprint states. In addition, we are also seeking an account executive for our B2B division with a history of working with credit unions and community banks. If you are frustrated with the direction of your mortgage career and would like to have a conversation about “Why Equity”, please contact Tom Piecenski, EVP of Sales and Development, at 614.327.5353.”
“Calling all LOs looking to dominate in their local market? Look no further than PrimeLending! We believe that you, as a loan originator, know exactly what it takes to succeed in your community. That’s why we empower you to build your business your way. With over 400 loan programs, including 23 renovation loan products, we offer all the flexibility you need to impress your clients and business partners. And when it comes to our production leaders, they believe in giving you the space you need to excel. In fact, in our latest Great Place to Work employee survey, 97 percent of our team said that management trusts them to do an amazing job without looking over their shoulders. So, if you’re ready to take the reins and steer your own professional journey, get in touch with Nic Hartke to talk about joining the PrimeLending family. Get ready to soar towards a bright future!”
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I find predictions, and the people who make them, fascinating for a few reasons. First, I — like everyone — would love to get a hint of what’s coming up.
But successful forecasting is pretty difficult. Which brings us to the second reason why I like predictions: It’s entertaining to see how different the world turned out from how people expected. Here are several memorable predictions of yore:
“Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax.” William Thomson, Lord Kelvin, British scientist, 1899
“Television won’t last because people will soon get tired of staring at a plywood box every night.” Darryl Zanuck of 20th Century Fox, 1946
“They couldn’t hit an elephant at that distance.” Final words of Union General John Sedgwick, 1864
“Atomic energy might be as good as our present-day explosives, but it is unlikely to produce anything very much more dangerous.” Winston Churchill, 1939
“Who the hell wants to hear actors talk?” H. M. Warner, Warner Brothers, 1927
“It will be years — not in my time — before a woman will become Prime Minister.” Margaret Thatcher, 1969
“We don’t like their sound, and guitar music is on the way out.” Decca Records, when rejecting the Beatles in 1962
“The abdomen, the chest, and the brain will forever be shut from the intrusion of the wise and humane surgeon.” British surgeon Sir John Eric Ericksen, 1873
“I think there is a world market for maybe five computers.” Thomas Watson, president of IBM, 1943
“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” Western Union internal memo, 1876
“I’m just glad it’ll be Clark Gable who’s falling on his face and not Gary Cooper.” Gary Cooper, on turning down the lead role in Gone With the Wind
Good stuff.
The blind leading the blind But we don’t have to go back decades to find instances of people (some of them pretty smart) being wrong about the future. Let’s flip through the cyber-pages of the Dec. 20, 2007, issue of BusinessWeek, which featured one of those year-end, “where the Dow will be a year from now” types of articles.
So where did six Wall Street experts think the Dow would be at the end of 2008? Dumb roll, please…
Leo Grohowski, BNY Mellon Wealth Management: 14,800
Thomas McManus, Banc of America Securities: 14,700
David Bianco, UBS Investment Research: 15,250
You may recall that the Dow was quite a bit lower than each of those predictions on Dec. 31, 2008 — approximately 40% lower, in fact, at 8,776.
Okay, so those people aren’t really dumb. In fact, they’re likely in possession of above-average intelligence, and work with teams of analysts who also have above-average brains. And they also likely have access to the most data, the fastest computers, and the best software.
And they still were very, very wrong.
Boy, it would be great if we could consistently predict which investments would be the winners and which would be the losers. But it’s very difficult; in the short term, it’s impossible.
Dr. Doom Want more proof? By now, you likely have heard and seen Dr. Nouriel Roubini, the NYU professor known as “Dr. Doom” for his pessimistic outlook. He gained a lot of fame for predicting the housing crash and resultant deep recession. Good for him.
In December 2008, Fortune magazine asked Roubini for his predictions for 2009. Here’s what he wrote:
For the next 12 months I would stay away from risky assets. I would stay away from the stock market. I would stay away from commodities. I would stay away from credit, both high-yield and high-grade. I would stay in cash or cash-like instruments such as short-term or longer-term government bonds. It’s better to stay in things with low returns rather than to lose 50% of your wealth.
Well, you know how good that advice was. The assets that Roubini warned against posted huge double-digit returns in 2009. As for the investments he recommended, the Vanguard Short-Term Treasury Fund (VFISX) returned just 1.4%, and the Vanguard Long-Term Treasury Fund (VUSTX) lost 12.1%.
As Yogi Berra once said, “It’s tough to make predictions, especially about the future.”
On my CAPS blog, I occasionally summarize predictions I’ve run across from the previous week or two. I always break them up into two groups: Those who predict good things for the economy or stocks, and those predict ill. Invariably, the people I quote are all smart, thorough, well-educated people. And they look into their crystal balls and see vastly different things.
J.D.’s note: CAPS is the free Motley Fool website where you can try your hand at picking individual stocks, track your performance, compare your performance to other CAPS players, and see what investments the best CAPS players are picking. GRS first mentioned it about two years ago. I’m no longer one for picking stocks, but if you are, CAPS is worth checking out.
But isn’t picking stocks the same thing as making predictions? If the future is so hard to forecast, why even try?
Ay, there’s the rub. If you’re putting money in an IRA or 401(k), you have to choose which investments to buy with that money. And investing, by its nature, is a predictions game; you put your money into the things that you think will be worth more in the future than they are worth today.
So what to do?
The power of diversification As I’ve written before, having a well-diversified portfolio is the way to go for most people, because there’s no crystal ball required. You own lots and lots of investments, so that something will do well in just about any scenario. You own domestic and international investments; large, mid, and small stocks; index and actively managed funds; and if you own fixed-income investments, then diversify across corporate bonds, Treasuries, and inflation-adjusted bonds.
If you’re investing in individual stocks, keep yourself honest by tracking your results. If, after all the time you spend researching and monitoring your stocks, you underperform the market, then perhaps you’d be better off in a mutual fund of some kind. Motley Fool CAPS is a great way to see if you have what it takes to be a stock-picker before you commit too much of your nest egg.
In summary, my fellow Americans (and the Canadians who are reading — darn you and your gold-winning hockey team! — though you put on a great Olympics), unless you put all your money under your mattress, you have to make some guesses about what the future will bring. But do so with great humility and honesty. And beware of any “expert” who is very confident about what will happen. Chances are, if you examine his record, you’ll find plenty of reasons he shouldn’t be so confident.
A lack of existing homes for sale and robust demand are fueling a rally in homebuilder stocks, according to Citigroup.
The sector gauge outperformed the S&P 500 Index last week, rising as much as 3% compared with a 1.4% decline in the broader gauge. Both indexes slipped about 0.5% on Monday as traders weighed the Federal Reserve’s next move on interest rates this year. The housing supply shortage is lifting homebuilders, despite a strong May housing starts that led investors to wonder if the market is in the early stages of overbuilding, Citigroup said in a note on Monday.
Single-family inventories are still down 19% in April, below pre-pandemic levels, and under-building after the global financial crisis has caused a significant deficit of more than 1 million homes in the U.S., Citigroup analysts led by Anthony Pettinari wrote. As it currently stands, most measures suggest “the market does not have a path to close the housing deficit in the near-term,” the note said.
Adding to the crunch, current homeowners are locked into their lower mortgage rates, and it doesn’t appear they’ll be “unlocking” from that anytime soon, according to Citi. Tight resale inventory is in part due to a large group of potential move-up buyers opting not to sell their current properties, as to not lose their highly favorable mortgage rates.
The tight supply “may provide a multi-year tailwind for builders,” the note said. The bank remains positive on homebuilders, with buy-ratings for PulteGroup Inc., D.R. Horton Inc. and Lennar Corp., citing favorable net order growth as a near-term catalyst in the second half of 2023.
Citi estimates that benchmark Fed interest rates would have to fall to about 5% before total supply could reach pre-pandemic levels, and rates would need to fall to roughly 3% before supply could reach pre-global financial crisis average levels. The analysts view the latter scenario as highly unlikely.
Last week, the Fed unanimously voted to hold the benchmark rate in the target range of 5% to 5.25%, its first pause since it began aggressive rate hikes in early 2022.
“We expect that as mortgage rates fall, some of this pent-up supply may come to market; however, it would require a significant decline in benchmark FRM rates before supply normalizes to pre-pandemic levels,” the analysts wrote.
When you choose a bank for your daily checking and savings needs, you can choose between a national bank, a smaller regional bank, credit unions of varying sizes, and even online banks and financial technology companies.
Since early 2023, when Signature Bank and Silicon Valley Bank both experienced failures after customers pulled out large amounts of money during bank runs, banking customers may feel more comfortable choosing a national bank.
Although the U.S. government took extraordinary measures to protect the assets of SVB and Signature Bank customers, and deposits held in the accounts were FDIC insured, many customers were still rightfully concerned about gaining access to their money in a timely manner.
After the banking crisis of 2008, the Federal government declared banks like JPMorgan Chase, Bank of America, Citibank, and Wells Fargo as “too big to fail.” But these aren’t the only national banks or credit unions available.
You might think that smaller online banks may have lower fees, while small local banks are known for friendly and responsive customer service. But the national banks on this list blend the best of all worlds: low fees, high marks for customer satisfaction, ways to avoid overdraft fees, convenient ATM networks, and a variety of banking products.
16 Best National Banks
Here are the 16 best national banks that offer exceptional services, excellent customer support, and innovative banking solutions to meet all of your financial needs.
1. SoFi – Best for Digital Banking & High Yields
SoFi became a nationally chartered online bank in 2022, after acquiring Golden Pacific Bancorp, Member FDIC. Originally known for its vast array of loan products, including private student loans, today SoFi has a combination checking and savings account, or a cash management account, with no monthly service fee.
SoFi also has no minimum balance requirements, no overdraft fee, and overdraft protection up to $50 with qualifying direct deposits each month. You can bank for free at any of 55,000+ fee free Allpoint ATMs nationwide.
As an online bank, SoFi offers higher interest rates than you may find at brick and mortar banks. Earn up to 4.20% APY on your savings account balance and 1.20% on money in your checking account. When you use your SoFi debit card at select local businesses, you can earn up to 15% cash back.
SoFi offers two tiers of accounts: SoFi and SoFi Plus. To qualify for the “freemium” SoFi Plus membership, bank customers must have qualifying direct deposits. Plus, when you sign up before December 31, 2023, you can earn a cash bonus of $250 when you set up direct deposits of $5,000 or $50 with a direct deposit as low as $1,000.
SoFi Plus members receive loan rate discounts, bonus rewards, access to special entertainment events and more, making SoFi a unique company when it comes to online banks.
2. Discover Bank – Best for Cash Back
Discover may be best known for cashback and rewards credit cards. But its online banking products are some of the best you’ll find among national banks.
With no monthly fees and no minimum balance, your Discover Cashback checking account pays 1% cashback on up to $3,000 worth of debit card purchases monthly. You’ll never pay overdraft charges, and you can withdraw cash at a network of 60,000+ fee free ATMs.
You can qualify for overdraft protection by linking your Discover Bank savings account. Discover Savings pays a high 3.90% APY with no minimum deposit required.
Other Discover Bank deposit accounts include CDs with terms from 3 months to 10 years, and a money market account that pays 3.80% APY for balances under $100,000 and 3.85% on balances $100,000 and up.
For questions or help with your account, you can reach a U.S.-based customer service representative for Discover Bank by phone, 24/7/365.
3. Chase Bank – Best for Credit Card Rewards & Referral Bonuses
As the world’s largest national bank, JPMorgan Chase Bank doesn’t need to do much to entice customers. People will choose Chase based on its name, reputation, and more than 4,700 convenient branch locations across the U.S.
However, Chase happens to have one of the best bonuses for new customers and a generous referral bonus program when existing customers refer their friends. This, coupled with a robust and easy-to-use mobile app and a variety of checking, savings and investment services, puts Chase on our list of top national banks in the U.S.
Chase is currently offering new Chase Total Checking customers a $200 bonus when they open a new account and set up direct deposit within the first 90 days.
New or upgrading Chase Private Client customers can earn a $3,000 bonus with a deposit of $500,000 or more within the first 45 days of account opening. Deposits of $150,000 to $249,999 earn $1,000 and cash deposits of $250,000 to $499,999 earn $2,000. You must keep the money in your J.P. Morgan Wealth Management or JPMorgan Chase deposit accounts for 90 days to qualify.
In addition to Chase Total Checking, the bank’s most popular checking account, and Private Client services, Chase also offers other checking and savings accounts.
Chase Secure Banking has a $4.95 monthly fee and no overdraft fees. Chase Premier Plus Checking offers a few added benefits beyond Chase Total Checking, including ATM fee rebates up to four times per statement cycle, a linked personal checking account with no monthly fees, and a 0.01% interest rate on balances.
Chase also offers bank accounts for kids, teens, and college students, as well as CDs, savings and money market accounts, mortgages, loan products, and a full array of top-rated rewards credit cards.
If you have multiple Chase accounts, it’s easy to manage them all within the mobile app.
4. Chime – Best for Building Credit
Chime is a financial technology company backed by Stride Bank, Member FDIC, and Bancorp Bank, Member FDIC. It is not a bank, itself, but offers some of the same features, including online banking, a debit card, and direct deposit up to two days earlier than some other banks.
Chime has no monthly service fee, no overdraft fee, and no minimum balance requirements. For customers who need a little boost to make it from paycheck to paycheck, Chime offers fee-free overdraft up to $200 through the SpotMe5 program and a credit builder secured Visa credit card with no annual fees, interest or minimum security deposit.
Use your Chime debit card at any of 60,000+ fee free1 ATMs in the Allpoint, MoneyPass or Visa Plus Alliance ATM networks. Out of network ATM fees may apply, otherwise.
You can qualify for Chime’s SpotMe program with a single direct deposit of $200 or more during any monthly statement period. If you process a transaction that would put you into overdraft, Chime will accept the transaction even if it puts your balance into the negative by up to $200.
The Credit Builder Secured Visa card carries the same requirements of a $200 monthly minimum direct deposit. You can build your credit and raise your credit score with responsible use of the card.
5. Citi® – Best for Large Cash Deposits
The third of the four largest national banks in the U.S. based on assets, Citi, owned by Citigroup, is best for high net worth customers or those with large cash deposits divided among Citi checking, savings, and other accounts.
Currently, you can earn a generous cash bonus of $200 to $2,000 when you open a qualifying Citi checking account and meet specific minimum opening deposit requirements. Your bonus will be determined by your account balance on the 20th day after opening the account. Funds must remain in the account for an additional 60 days after the 21st day.
Citi offers multiple checking accounts to meet various customers’ financial needs, all with monthly fees that are easy to waive if you hold the required minimum balance. The bank accounts include:
Citibank
Citi Priority, which includes travel perks and access Citi Personal Wealth Management advisors
Citigold, relationship banking and investment services
Basic Banking and ATM access
Access Account, a debit account with no paper checks
For the Basic Checking account, you’ll need to maintain a $1,500 minimum balance to waive the fees. The other accounts have larger minimum balance requirements to avoid monthly maintenance fees and take advantage of other perks, up to $200,000 for a Citigold account.
All accounts provide access to personal banking at Citi branches and access to more than 65,000 fee free ATMs across the U.S. All accounts except for Basic and Access accounts also have no fees at ATMs outside the Citi network.
Like all the larger national banks on this list, Citi has a full gamut of rewards credit cards, savings and money market accounts, and high-yield CDs.
6. CIT Bank – Best for High Interest Rates
CIT Bank, a division of First Citizens Bank, has earned awards and accolades for customer satisfaction, rated by American Banker as #1 for “delivering the most humanized experience in banking.”
You should be aware that deposits in First Citizens Bank & Trust Company, Member FDIC, are not separately insured. This only matters if you hold more than $250,000 in any single account type, such as checking or savings, in both First Citizens Bank and in CIT Bank.
CIT is the online only banking arm of First Citizens Bank, with high-yield savings accounts, CDs, money markets, and eChecking, all with no monthly fees and no overdraft fees. You won’t pay any ATM fees at CIT Bank machines, and CIT Bank reimburses up to $30 per month when you use out-of-network ATMs.
CIT offers 0.25% APY on checking when you hold more than $25,000 in your account, and 0.10% APY on balances under $25,000. The bank has high interest rates for savings, offering customers a 4.85% APY on balances of $5,000 or more with the Platinum Savings account.
CIT Bank has two other savings accounts as well:
Savings Connect, with a 4.60% APY
Savings Builder, which requires a minimum balance of $25,000 or a $100 monthly deposit to earn 1.00% APY
You’ll need a $100 minimum deposit to open a checking or savings account at CIT Bank.
7. Bank of America – Best for College Students
As the second largest of the best national banks, behind Chase, Bank of America has the full gamut of banking products, with three checking accounts plus a student account, savings, CDs, and investment products.
It’s easy to waive monthly maintenance fees on a checking account with a minimum daily balance, direct deposits, combined balances across eligible linked Bank of America accounts, or by enrolling in their Preferred Rewards programs.
We like the Advantage SafeBalance banking for kids, teens, and college students under 25 years old. They have no monthly fee and no overdraft fees. Teens ages 16+ can have sole ownership of the account.
For everyone else, the bank offers Advantage Plus and Advantage Relationship checking accounts with easy ways to waive the monthly fees with direct deposit or a minimum daily balance.
When you open a new checking account, you can qualify for a $100 bonus when you receive qualifying direct deposits of at least $1,000 within 90 days of opening the account.
Of course, Bank of America also has CDs, and a savings and money market account. Plus you can invest with Merrill. All of these deposit accounts count toward your Preferred Rewards membership.
When you have a combined average daily balance of at least $20,000 for three months, you’ll qualify for the rewards program.
8. U.S. Bank – Best for Military Members & High Balance Savings
U.S. Bank offers the Bank Smartly checking account so you can earn interest on your money. The current interest rate is just 0.01% APY on all checking balances. You’ll pay a $6.95 maintenance fee, but this is waived if you meet minimum deposit requirements or if you are a member of the U.S. military.
You can link your Bank Smartly checking account to a standard savings account or Elite Money Market to earn even more. To avoid fees on your savings account, you’ll want to keep a $300 minimum daily balance or a $1,000 average monthly collected balance. If you are already a Bank Smartly customer, you can enroll in Smart Rewards to waive savings account fees.
The Elite account is better for those with high balances. You can earn up to 4% APY on balances from $25,000 up to just under $500,000.
The appeal of U.S. Bank is in its high ratings for banking satisfaction across the board from customers. U.S. Bank earned accolades for having the best mobile app, the best digital mortgage tools, the best customer service features, and best mobile check deposit capabilities. These factors all contribute to its ranking as a best national bank.
9. Axos Bank – Best Online Bank
Axos is an online only bank with a rewards checking account that delivers up to 3.30% APY, with no fees and unlimited ATM fee rebates for out-of-network ATMs.
To earn the maximum APY, you’ll need to set up direct deposit and Axos Bank’s free Personal Finance Manager for 0.70% interest. Then, open an investment account and take out an Axos personal loan or auto loan and earn another 2.60% annual percentage yield on your checking account balance.
Axos also offers an Essential Checking account with early direct deposit and no fees, and a Cashback Checking account, which gives you 1% cash back on debit card purchases, along with no maintenance fees and unlimited domestic ATM fee reimbursements.
Voted the best online bank by many top personal finance sites, Axos Bank offers more than just high interest, no fee checking.
Axos Bank offers CDs with terms between 3 and 60 months and a savings account with 0.61% annual percentage yield, with interest compounded daily. You can also find personal loans, car loans, mortgages, and investment products.
Like other national banks, Axos Bank provides FDIC insurance up to $250,000 or $500,000 for joint account holders. But you can expand your coverage up to $150 million with Axos Bank InsureGuard+ Savings from IntraFi Network Deposits.
Axos splits up your large deposit into multiple accounts across several banks, each covered up to $250,000. If you are dealing with a substantial amount of cash and want your savings protected at a single bank, Axos may be a good choice for you.
New customers can earn a $100 welcome bonus by opening an account with just a $50 minimum opening deposit.
10. Truist Bank – Best for Relationship Banking & Innovative Savings Perks
Truist Bank is one of the top 10 largest national banks, formed as a merger between BB&T and SunTrust in 2019. Called “the biggest bank you’ve never heard of” by CNN Business, Truist holds assets of $574 billion and has been growing steadily since the merger.
Truist offers checking and savings accounts, CDs, and credit cards. Truist checking and savings customers can earn perks and benefits. This includes access to Long Game, a savings game app that lets you earn cash when depositing into your Truist savings account. It also includes bonus rewards on your Truist credit cards.
Truist has four levels of relationship banking in its Truist One checking account. This means the more you deposit, the more perks you will receive, up to a 50% loyalty bonus on Truist credit cards, and a discounted annual fee for a Delta SkyMiles debit card. Benefits for relationship banking begin at $10,000 in combined average monthly balances for Truist deposit accounts.
Your Truist checking account has a $12 monthly fee, which is easy to waive with $500 or more in direct deposits each month or a $500 minimum balance across all Truist deposit accounts. Truist personal loan, mortgage or credit card customers also pay no fees on their Truist checking account.
You can also waive the monthly fee with a linked Small Business checking account or if you are a student under the age of 25. You’ll need a $25 minimum opening deposit for a Truist One checking.
Customers with lower income or just getting started establishing their finances can benefit from Truist Confidence checking and savings accounts. The account has just a $5 monthly maintenance fee, which is easily waived.
11. Capital One – Best for High Interest Rates at a Brick and Mortar Bank
Like Chase Bank, Capital One is well known for its top-rated rewards credit cards. The company is also one of the best national banks with a savings account and CDs offering interest rates higher than the national average.
Capital One Performance 360 savings has a 3.90% APY, no monthly maintenance fees, and no minimum deposit to open your account. A Capital One 360 Performance checking account, similarly, has no monthly maintenance fee, overdraft protection through your linked savings account, and early direct deposit.
You can bank with no fees at a network of 70,000+ ATMs nationwide, and can deposit cash easily at CVS retail locations. Although you must open your Capital One Performance account online, you can receive personalized service and deposit cash at any Capital One bank branches or Capital One Cafes.
12. PNC Bank – Best in East and Southwest
PNC Bank is a large, national bank with branch locations across 29 states. Most branches are in the east, south, and southwest, although you will also find branch locations in some Midwest states.
PNC Bank’s online checking account is called Spend and it links to the PNC VirtualWallet. You can add a savings account, called Reserve, or upgrade to the Performance Select product with two tiers of savings and double layer overdraft protection.
When you set up your VirtualWallet with PNC Bank and open your Spend account, you can earn a $50 bonus.
Combining your Spend account with a PNC Bank Reserve account yields even more benefits. Earn a $200 bonus when you qualify. Finally, if you open a Performance Select VirtualWallet, you could earn $400.
Each account comes with a low monthly fee that is easily waived through qualifying monthly direct deposits or by meeting minimum balance requirements.
13. Wells Fargo – Best for Checking Account Options
Wells Fargo, one of the “big four,” is the fourth largest of the best national banks in the U.S. It is known for having many convenient bank locations, with 4,700 branch locations.
The vast number of branches across the country puts it top on our list for in-person banking and customer satisfaction.
Plus, we also rated it best for various checking account choices for everyone from children to retail investors.
Like the other national banks on this list, Wells Fargo has checking, savings, and CD accounts. The bank has four checking account options for consumers at various stages of their financial lives:
Clear Access Banking, with no overdraft fee and a low $5 monthly fee, waived for teens and young adults ages 13 to 24
Everyday Checking, the most popular bank account, with optional overdraft protection
Prime Checking, offering discounted interest rates for loans and higher interest rates for linked CDs and savings accounts
Premier Checking, a relationship banking service with 24/7 support and discounts on investing services
It’s easy to waive the $10 fee on Everyday Checking with a $500 minimum daily balance or $500 in monthly direct deposits. Waive the $25 fee on your Prime checking with $20,000 in linked balances. Similarly, your Premier Checking account will be free with $250,000 in linked balances, including investments with the bank’s Advisors.
You’ll need a $25 minimum opening deposit to open your account.
14. Ally Bank – Best Online Only Bank for Savings
Ally Bank is widely recognized as one of the best national online banks. It has very few fees, including no maintenance fee, no overdraft fee, and no ACH fee (even on expedited transfers). Plus, you’ll earn interest of 0.25% in your checking account and 3.85% APY on savings, including money you have allocated into various buckets.
We rated Ally Bank as the best online only bank for savings, not just because of the high interest rate, but because it offers so many ways to manage your money and ramp up your savings efforts.
You can set up recurring transfers into your savings account for specific goals or just to build up your emergency coffers. You can choose to round up transactions made with your Ally Bank debit card, or even electronic payments and checks. When Ally Bank finds at least $5 in “round-up” savings, it will be transferred automatically to your checking account.
Finally, Ally Bank analyzes your checking account periodically to reveal extra funds that are “safe to save.” Ally Bank automatically transfers that money for you. But you can transfer it back whenever you’d like.
In addition to these savings benefits, Ally Bank lets you access your money with your debit card with no fees at any of 43,000+ Allpoint ATMs. The online bank also refunds up to $10 in fees charged by out-of-network ATMs.
You can avoid stress and overspending with the Overdraft Transfer Service, which automatically transfers money from your Ally Bank savings account into checking. If you exceed six transfers or six savings withdrawals per month, Ally Bank will reimburse those fees, too.
You can also apply for CoverDraft℠ Coverage, which will cover up to $250 in charges that would put your account in the negative. You’ll qualify 30 days after you deposit at least $100 into your checking account. If you receive qualifying direct deposits of at least $250 two months in a row, you can increase your coverage to $250.
15. TD Bank – Best for Overall Banking Satisfaction
TD Bank, deemed America’s most convenient bank for its number of branches, branch hours and excellent customer service, blends the best of brick and mortar banks with easy online banking.
Most TD Bank locations are open seven days a week, including Sundays, with extended hours beyond what most brick and mortar banks provide. Most TD Bank branches are located across the East Coast, with locations in 15 different states and Washington, D.C.
TD Bank is the 7th largest bank in the U.S. based on deposits, with 1,668 branch locations nationwide. You can also reach customer service by phone, 24/7/365, which earns TD Bank high marks for banking satisfaction.
TD Bank offers six checking accounts for customers in various life stages:
TD Essential Banking
TD Convenience Checking
TD Beyond Checking
TD Simple Checking
TD 60 Plus Checking
TD Student Checking (for ages 17 to 23)
Currently, TD Bank is offering sign-on bonuses for new customers who open a TD Beyond or TD Convenience bank account. You’ll need a qualifying direct deposit (or more than one) totaling $2,500 within the first 60 days to earn $300 with TD Beyond, and a direct deposit of just $500 within the first 60 days to earn $200 with TD Convenience.
16. Schwab Bank – Best for Investors
Schwab may be best known as an investment service, but the bank was rated highest in banking satisfaction with checking accounts from J.D. Power & Associates four years running.
If you have a Schwab investment account, or are considering opening one, Schwab could be the best choice in banking for you.
The Schwab Bank Investor checking account has no foreign transaction fees, no minimums, and unlimited ATM fee rebates. Plus, earn 0.45% annual percentage yield on checking. Schwab’s savings account offers 0.48% APY.
Schwab also offers exceptionally high interest rates for CDs, with up to 5.40% APY and terms as short as 30 days. You’ll receive FDIC protection exceeding the federal maximum because you can purchase CDs from multiple banks, all through Schwab investment.
Methodology: How We Chose the Best National Banks
We evaluated a variety of banks and credit cards, taking into consideration the:
Variety of products
Interest rates
Monthly fees
ATM fees and ATM fee reimbursement
Branch locations and number of branches
Minimum deposit requirements
Fraud protection and security
We also looked at consumer reviews, and drew on the general reputation of each bank to find the best national bank.
Finding the Best National Bank
Now that we’ve explored the specifics of the best online banks and brick and mortar banks nationwide, you probably still have questions about which one is really the best national bank.
Let’s compare the three largest in the U.S. based on number of branches, interest rates, and overall banking satisfaction.
Chase vs. Wells Fargo
For the largest nationwide bank, Chase offers excellent banking satisfaction with an A+ rating from the Better Business Bureau, 4,800 branch locations, and an easy and intuitive mobile app. If you are shopping for a bank credit card, Chase also offers some of the best rewards cards available today.
Wells Fargo rivals Chase when it comes to number of branches, with roughly 4,700 locations across the U.S. It’s somewhat easier to waive the checking account fees at Wells Fargo. Wells Fargo offers higher interest rates for savings, with a 0.15% APY compared to Chase’s 0.01%.
Both banks have lower interest rates than you might find at online banks. However, if you are looking for national banks with a solid reputation, many branches, and high marks in banking satisfaction, either Chase or Wells Fargo would be a good choice.
Wells Fargo vs. Bank of America
Bank of America and Wells Fargo are the second and third-largest banks in the U.S. based on assets. BofA only has 4,000 branches compared to Fargo’s 4,700, but BofA boasts more ATMs nationwide.
BofA stands out when you join the Preferred Rewards program because you can waive the fees on your bank account and enjoy perks, bonus rewards on BofA credit cards, and rate discounts on loans.
If you have a large balance or are looking for an investing platform through your bank, BofA may be your best choice. On the other hand, Wells Fargo offers high interest rates on savings and convenient branch locations nationwide.
Common Questions
People have many questions related to whether an online bank is better than a traditional bank or whether a local bank is better than one of the largest national banks. We break it all down here.
Which is better, an online bank or a brick-and-mortar bank?
If you are looking for the highest interest rates and generous rewards programs, you are highly likely to find them at online banks. However, there are some advantages to a brick and mortar bank, including in-person service at local branches, the availability of paper checks, and easy ways to deposit cash in person or at branch ATMs.
You should expect the best national online banks and the best brick and mortar banks to have robust mobile apps, easy-to-waive fees, and fraud protection.
Make sure whatever bank you choose is “Member FDIC,” which means your deposits are insured up to $250,000 per account holder, per account type. That means joint accounts have $500,000 worth of FDIC insurance protection.
Is my money safer in a national bank vs. a regional bank (or a national credit union vs. a regional credit union)?
All banks on this list are Member FDIC, which means they are insured to the maximum allowable limit of $250,000 per account holder, per account type. Credit unions are covered up to the same limits by the National Credit Union Administration.
Many online banks are insured up to $2 million or more. These financial institutions divide cash deposits among multiple partner banks. Each bank insures deposits up to the maximum limit allowed by the Federal Deposit Insurance Corp. Read the fine print to determine your coverage limits when you choose a bank.
Beyond that, your money should be equally safe in a national bank, a smaller bank, or a credit union of any size. Also look for features such as fraud protection, fraud alerts via text, email or in the mobile app, and enhanced website security measures. You should also be able to lock and unlock your debit card in the mobile app if you misplace it or believe it may have been stolen.
What makes big banks different from smaller banks?
By definition, big banks will have larger market capitalization, which represents the total value of a bank’s stocks. Big banks will also hold more assets. For instance, Chase, which is the world’s largest financial institution, holds $3.2 trillion in assets. The second-largest national bank, Bank of America, possesses $2.41 trillion in assets. Larger financial institutions may also have more bank branches.
In many other ways, big national banks and smaller banks are similar, especially today. Customers want specific features and are unwilling to compromise on things like fee-free ATMs, no monthly fees, early direct deposit, and an intuitive mobile app.
How much interest do the best big banks pay?
In general, some of the largest national banks do not have the highest interest rates for savings and very few offer interest earning checking accounts.
Capital One 360 and Discover are two of the best national banks that offer interest on checking. To earn a higher APY with one of the largest national banks, you might want to consider CDs.
Are national banks better than other kinds of banks?
National banks aren’t necessarily better or worse than other kinds of banks. They may have more convenient branch locations, a higher number of branches, and a greater variety of products, but they might also have higher fees. Decide what’s most important to you when you choose a bank.
If you’d prefer to trust your money with one of the largest national banks, with a large market capitalization, high value, and branches nationwide, consider opening your checking and savings accounts with one of the best national banks on this list.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
The Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
In spite of bank failures over the past three decades, most banks and credit unions in the U.S. remain secure places to store your money. One of the benefits credit unions and banks offer is easy access to your money.
Account holders can withdraw money quickly from a checking account at a bank branch or with a debit card, often with no fees. They can also find easy access and higher interest rates with a savings or money market account.
Keeping your money in a bank or credit union is considered safe because your money is insured up by the FDIC or NCUA, respectively.
In the event of a bank failure, which occurred more than 100 times during the financial crisis that spanned 2008 to 2012, some of your money is still protected by the federal government. Money in all U.S. banks, including the nation’s five biggest banks, is FDIC insured up to $250,000, per person, per account.
Fortunately, bank failures are less common today. The FDIC reported that the last time an FDIC insured bank failure occurred was October 2020. The FDIC paid out an estimated $18.3 million to account holders.
Credit unions carry similar protection in the form of insurance through the National Credit Union Administration.
How to Choose a Safe Bank Account
You already know that if a bank fails, the federal government will protect a large portion of your funds through FDIC insurance. You can spread your money between multiple checking and savings accounts so that no account holds more than the maximum $250,000 that is FDIC insured.
When you’re looking for the safest bank to open a new bank account, you want to compare other factors, including the bank’s total assets, security measures, fraud liability policies, history, and more.
What We Mean By a Safe Bank
You can see from this list of safest banks in the U.S. that bank security doesn’t always depend on the bank’s size. You’ll find financial institutions ranging from smaller banks to the largest banks on this list.
Bank safety means that the bank uses state-of-the-art security measures to protect your money, including:
Data encryption for their own systems and for online banking
Secure online bill pay
Two-factor authentication
Alerts for unauthorized transactions
Guarantee against unauthorized access
Card locking by app or phone
Direct deposit
We’ll look at these and other safety measures. Then, we’ll explore what makes some of the biggest banks in the U.S. some of the most secure banks and which other banks are keeping pace. Read on to find out: What is the safest bank in the U.S.?
Safety Measures Banks Use
Banks use a combination of training and state-of-the-art technology to keep account holder’s money secure. This includes training bank employees in security best practices and how to respond promptly to fraud alerts. It also includes bank policies, such as $0 fraud liability.
Finally, technology that includes SSL encryption and two-factor authentication can also help to keep your bank account safe during online banking.
12 Safest Banks in the U.S.
The Global Finance “World’s Safest Banks” list highlighted 50 safe banks. Of those, only a handful were based in the U.S. Here are 12 of the safest banks for U.S. customers, based on the Global Finance list.
1. JPMorgan Chase
With a market capitalization of $413.7 billion and a balance sheet total of $3.31 trillion, JPMorgan Chase is the largest bank in the U.S. based on assets, according to InsiderIntelligence.com.
During the financial crisis of 2008, Chase was one of the banks deemed “too big to fail.” Certainly, an account holder can feel secure that their most is protected even if the bank faces financial hardship.
But is Chase also ahead of the curve when it comes to security? Chase uses multiple authentication checks when you try to sign in to your online account.
The bank monitors for unusual activity and may send a text message or email for you to authorize a transaction outside your home state or for an exceptionally high amount.
The bank’s website uses 128-bit data encryption to secure your personal information. Finally, bank employees are trained in fraud prevention, fraud detection, and ethics.
Everyday security features
128-bit encryption
Multifactor authentication
Guarantee against unauthorized access
EMV chip cards
Card locking through the app or automated phone system
24/7 fraud protection by phone
2. U.S. Bank
With assets totaling nearly $675 billion, U.S. Bancorp, parent company of U.S. Bank, is the fifth-largest bank in the U.S. The bank website and mobile app offer SSL encryption, one-time card numbers for online purchases, and enhanced security features for commercial banking customers.
The Bank Smartly checking account for consumers allow you to set up account alerts and reminders through the mobile app. You can make contactless payments through the app, which gives you added protection against point-of-sale fraud and debit card skimmers, which can steal your account information if you pay using the magnetic stripe on your card.
U.S. Bank also offers a “Safe Debit Card,” designed for consumers ages 14+ who want the convenience of a checking account and debit card without the ability to write checks. The Safe Debit Card provides free access to the user’s VantageScore 3.0 credit score through TransUnion, a credit score simulator, online bill pay, mobile banking, and no overdraft fees.
Everyday security features
$0 liability fraud protection
Multifactor authentication
Virtual card numbers
SSL encryption
EMV chip cards
3. TD Bank
TD Bank, or Toronto-Dominion, is not just one of the largest banks in the U.S. with a worldwide presence, it is also one of the safest. Its branches are known for personalized customer service. But the bank is also known for its online presence. TD Bank recently partnered with Amount, a fintech provider, to enhance security with a suite of state-of-the-art fraud detection and account verification services.
The bank has 24/7 fraud monitoring and text alerts for activity. Plus, if you lose your debit card, you can replace it immediately at a nearby branch. TD Bank also offers features that enhance your security, including Bill Pay and Mobile Deposit, which reduces the handling of paper checks that create a risk of theft and fraud.
Everyday security
Card locking
24/7 fraud monitoring
Personalized service
Mobile deposits
Enhanced security and fraud detection
4. Citibank
Citigroup, which owns Citibank and other Citi properties, is the third-largest bank in the U.S. right now behind Chase and Bank of America. Like Chase, Citi is considered one of the financial institutions deemed “too big to fail.” The bank’s market cap is $97.06 billion.
Citi is considered one of the safest banks due to its enhanced security features for its bank accounts and credit cards.
Citi was one of the first banks to offer a virtual credit card number. This one-time use card number allows cardholders to shop safely online without having to give out your bank account information or card number.
You can sign on to the Citi mobile using a QR code and Face ID®, Touch ID®, Biometrics or 6-Digit PIN, which is more secure than using a username and password. As with Chase, you will receive text alerts for suspicious or unusual activity.
Do not confuse Citi with CIT Bank. In spite of the similarity in their names, CIT is a division of First Citizens Bank and not affiliated in any way with Citigroup.
Everyday security features
EMV chip cards
$0 liability fraud protection
Biometric security
256-bit SSL encryption
Multifactor authentication
Remote debit card locking by phone or through the app
5. Charles Schwab Bank
Charles Schwab Bank is known primarily for its investment divisions. But the bank achieved the highest ratings for customer satisfaction with checking accounts by J.D. Power. Most of the world’s safe banks offer a high level of customer service, which can put a customer’s mind at ease.
Schwab Bank has many of the features high earners look for in a bank, including the ability to easily transfer money from your Schwab One brokerage account to your fee-free checking account.
Schwab’s Mobile app and banking systems use the highest levels of data encryption, as you might expect. Set notifications regarding transactions and fraud alerts through the mobile app. Lock and unlock your debit card at will. You can also set travel notices so that you don’t get a fraud alert in error if you’re making large purchases off your usual beaten path. The bank’s personalized service stands out, with 24/7 service via phone or chat, and branches nationwide.
Everyday security
Card locking through the app
Travel notices
Contactless payments
EMV chip card
Data encryption
6. M&T Bank Corporation
With assets totaling more than $200 billion, M&T Bank may not be as large as Citi or Chase, but its high level of customer service and security puts it on the list of safest banks. M&T Bank has earned multiple awards for small business excellence, along with the highest ratings issued by the Federal Reserve Bank of NY for Community Reinvestment Act performance.
M&T’s mobile app allows you to receive instant alerts about purchases via email, text, or in the app. This way, you can keep track of fraud along with your own spending habits. The app offers fingerprint or facial recognition on supported devices for enhanced security. You can easily report a lost or stolen card in the app or lock your card if you’ve misplaced it.
M&T delivers the same security larger banks offer, with the personalized service of a community bank. With 700 branches across 15 states nationwide plus a network of 1,800 ATMs, M&T Bank might be a convenient and safe choice for your money.
Everyday security features
SSL encryption
Debit card locking
Multifactor authentication
Identity protection services available
24/7 fraud protection
7. Wells Fargo
With $1.71 trillion in assets, Wells Fargo is currently the fourth-largest bank in the U.S. It offers savings and checking accounts, credit cards, loans, and more to personal and business customers.
The bank has more than 4,700 locations plus 12,000 ATMs in its network, making it convenient for customers across the U.S. The Wells Fargo mobile app makes online banking easy and secure, with access to your FICO score, fraud alerts, and multifactor authentication.
The website and app operate with SSL encryption. You can log in via face or fingerprint ID if you prefer. You can set alerts any time someone signs onto your account or whenever a purchase is made.
Furthermore, you can also connect a digital wallet to your account, which may be safer than using debit cards. If you think you lost your card, you can turn it off and turn it on again through the app if you find it.
Wells Fargo makes it easy to report fraud, unauthorized activity, or suspicious activity quickly and easily through the bank’s helpline, even if you are traveling outside the U.S.
Everyday security features
$0 fraud liability
·Guarantee against unauthorized activity
SSL encryption
Low balance alerts
Card locking
8. PNC Bank
PNC Financial Services, owner of PNC Bank, has assets of $557 billion as of December 2022, making it one of the largest banks in the U.S. Like the other big banks, PNC is on the cutting edge of security and fraud protection for its customers.
The bank offers a Virtual Wallet that provides three accounts for checking and savings, along with direct deposit capabilities, overdraft protection, and a “Low Cash Mode,” that alerts you when your balance drops below a specific amount.
PNC also offers traditional banking solutions at its 2,629 branches worldwide. Through the bank’s growing number of Solution Centers, as well as mobile branches in underserved communities, PNC combines the security and convenience of an online bank with a traditional bank.
Everyday Security
Virtual wallet
Debit card blocking
SSL encryption
Fraud alerts
$0 fraud liability
9. Capital One
Capital One sits in the country’s list of top 10 banks and, thanks to enhanced security measures, is considered one of the safest banks in the U.S., too. Capital One holds assets worth $391.81 billion.
Capital One’s credit cards are consistently ranked on top list for rewards credit cards for travelers, and their security measures and easy to use app works for both credit and bank account customers.
You can set alerts by text or email each time you use your card. The app uses multifactor authentication and Capital One has $0 fraud liability for its accounts. You will not be held responsible for unauthorized activity. The bank issues EMV chip cards for added security at point-of-sale transactions.
Everyday Security
Card locking through the app or by phone
Account monitoring
SSL encryption
Multifactor authentication
Activity alerts
Credit monitoring
10. AgriBank
AgriBank made the Global Finance list of world’s safest banks, coming in at number 34. Part of the Farm Credit System, the bank has a net income of $576.1 million and $142.1 billion in total assets.
AgriBank has delivered reliable and consistent service to the agricultural industry for more than 100 years. As an agricultural credit bank, AgriBank is a wholesale only lender to farmers, ranchers, and rural businesses and homeowners. It pays dividends to its members.
It’s important to note that AgriBank services only agricultural customers in 15 states in the southern and Midwest U.S., from Arkansas to Minnesota. AgriBank is not FDIC insured. But, it is backed by the Farm Credit System Insurance Corporation to protect its members.
Everyday security features
Ethics hotline through EthicsPoint
SSL secured website
Two-factor authentication
Data encryption
Backed by the FCSIC
11. CoBank
CoBank is the second FCS member on our list of safest banks. Like AgriBank, it is protected by the FCSIC and offers wholesale loans to rural customers in the agricultural, power, water, and telecommunications industries.
Serving customers in all 50 states, it is one of the largest private providers of credit to the U.S. rural economy, according to its website. Dedicated to preventing fraud, the financial institution has a podcast, Fraud Wise, that provides tips to help its rural customer prevent and detect fraud.
Customers can report fraud easily through phone or email. Because of its size and personalized service, CoBank is rated by Global Finance as one of the safe banks in the U.S.
Everyday security features
Code of ethics
Fraud prevention
SSL data encryption
Guarantee for unauthorized transactions
12. AgFirst
AgFirst Farm Credit Bank is another member of the Farm Credit System that runs as a cooperative, where an account holder is considered a partner. AgFirst takes steps to maintain the safety and security of its members financial data and money. The organization operates in alignment with national cybersecurity standards and applies industry best practices to keep its systems and customers secure.
AgFirst offers loan servicing, loan origination, and many other services to the agricultural community. Headquartered in Columbia, SC, AgFirst has locations across the south and Midwest U.S.
Everyday security features
SSL encryption
Adheres to national cybersecurity standards
Personalized customer service
Backed by FCSIC
Bank vs. Credit Union
In your search for the best bank, you might also consider a credit union. They often offer lower fees, higher interest rates, and more personalized service. The ability to build relationships with employees at your local branch might make them feel like a safer choice.
See also: Best Credit Unions Anyone Can Join
What makes credit unions safe?
The money in a credit union is insured by the National Credit Union Administration. Just as with FDIC insured bank accounts, funds in credit unions are insured for up to $250,000 per person, per account if the credit union fails.
Credit unions often offer local, more personalized service than a national bank, which makes them a desirable financial institution for some people. You may find zero fee checking accounts more frequently at credit unions, higher interest rates, and better loan terms.
The same technology and customer service used in the safest banks also keeps your money safe in a credit union. Look for SSL encryption and two-factor authentication, easy ways to report fraud, and a guarantee against unauthorized access to your account.
What makes the safest banks in the U.S. secure?
A variety of security measures, along with FDIC insurance, keeps the money in your bank secure against fraud and bank failures. Some of the factors that can enhance a bank’s security include its online banking security, the availability of EMV chip cards, $0 fraud liability,
What happens if a bank fails?
Bank failures happened with alarming frequency during the recession of 2008. Experian reports that there were 561 bank failures between 2001 and 2022, when the U.S. faced more than one financial crisis.
Fortunately, these banks were FDIC insured. When a bank fails, the FDIC sells the remainder of the bank’s assets to a more stable bank. Sometimes, the FDIC will cover the bank deposits itself.
Are online banks safe?
Online banks today use the same security measures as a brick-and-mortar financial institution. Often, an online bank offers a fee-free checking account and higher interest rates for an online savings account. If you choose an online bank, make sure it is FDIC insured.
What appears to be an online bank may not be a national FDIC insured bank, but another type of financial institution. If that’s the case, make sure it is backed by an FDIC insured national bank.
Some of the largest banks call America home. These banks are backed by the Federal Deposit Insurance Corporation (FDIC) and offer a variety of products and services. If you prefer a big bank over regional banks or a smaller, community bank, you’ve come to the right place.
Below we’ve compiled a list of the largest banks in the U.S. Once you read through it and perform some of your own research, you should be able to choose a bank or two that meets your needs.
How to Measure Bank Size
First, let’s discuss how to measure the size of a bank. We can do so by looking at the number of customers, number of branches, and number of employees.
But perhaps the best way to measure bank size is by focusing on the total assets under management. This figure shows the actual size of a bank, regardless of how many employees, branches, or ATMs it has.
In our list of the largest banks in the U.S. below, you’ll find that we include each bank’s total assets so you can get a better idea of just how large it is.
Bank Services
We also thought it would be a great idea to briefly discuss how banks work and what they can do for you as a customer. Banks have been around since at least the 14th century. They offer a safe place for individuals and business owners to park their cash and work on various financial goals.
While every bank has their own unique lineup of services, most of them provide checking accounts, savings accounts, and loan services. Some go the extra mile with credit cards, wealth management services, and other conveniences.
Types of Banks
In addition, it’s wise to go over the types of banks at your disposal. The most common types of banks you’ll find include:
Retail banks: Retail banks serve the public and typically have branches and main offices. They provide a wide range of services, like checking and savings accounts, mortgage and loan services, auto financing, CDs, and individual retirement accounts (IRAs). Retail banks may be regional banks operating in various states.
Commercial banks: Also known as corporate banks, commercial banks gear their offerings to small business owners and larger corporate entities. In addition to the usual banking services, they may offer cash management, employer services, and commercial real estate services.
Investment banks: Investment banks are designed for corporate clients with complex needs, like mergers and acquisitions. These clients are large corporations, governments, and hedge funds.
Central banks: Central banks are not available to the public. Instead, they’re an independent institution that oversees the money supply and monetary policy in the country. The Federal Reserve Bank is the central bank in the U.S.
Banks vs. Credit Unions
While banks are quite popular, some customers use credit unions instead. While credit unions also offer banking services, like checking and savings accounts, they’re not for profit institutions that are managed by their customers or members.
Compared to banks, credit unions tend to deliver more personalized service. But they also provide fewer services and have fewer branches and ATMs. A credit union can make sense, depending on your unique goals.
20 Biggest Banks In The U.S.
Here’s an overview of the largest banks in the U.S.
1. JPMorgan Chase & Co.
Total Assets: $3.381 Trillion
Headquarters: New York City, New York
If you focus on consolidated assets, JPMorgan Chase earns the spot as the largest bank in the U.S. This investment bank is also a holding company for subsidiaries, including Chase Bank. Chase, which is J.P. Morgan’s consumer banking division, has more than 4,700 branches in the U.S. plus more than 30 branch locations abroad.
According to Chase, almost half of the households in the U.S. are Chase customers. It attracts digital savvy customers that value online banking and products with artificial intelligence (AI). In addition to consumer banking, JPMorgan Chase is a combined bank that offers commercial banking, asset and wealth management, and investment banking.
Chase offers some of the most popular cash back and travel credit cards that can earn you valuable rewards through their program, Chase Ultimate Rewards. Using these credit cards for everyday purchases can earn you travel points, cash back, and other benefits.
2. Bank of America Corp.
Total Assets: $2.440 Trillion
Headquarters: Charlotte, North Carolina
Bank of America is a multinational bank with nearly 66 million customers and small business clients across the globe. It has a few divisions, including Merrill, Bank of America Securities, and Bank of America Private Bank.
As a Bank of America customer, you can enjoy access to a wide variety of products and services as well as access to more than 4,000 branches and more than 17,000 ATMs.
Just like most big banks, Bank of America prides itself on a robust mobile app, the Zelle payment solution, and other intuitive digital tools. Its various service lines include consumer banking, corporate banking, credit cards, insurance, investment banking services, institutional banking, mortgage loans, private banking, private equity, and wealth management.
3. Citigroup
Total Assets: $1.720 Trillion
Headquarters: New York City, New York
Citigroup, which is widely known as Citi, is an investment bank and financial services firm. When Citigroup merged with Travelers Group in 1998, it became a major player in the financial space. Citibank, Citigroup’s retail banking division has more than 700 branches in the U.S. and over 1,800 branches outside the U.S.
Most of the U.S. bank branches are in Florida, California, New York, and Washington DC. Citibank manages over 138 million bank accounts and has 65,000 fee-free ATMs across the country. Over the years, it has earned high rankings for its digital money management tools, including one that shows customers a financial wellness score.
4. U.S. Bancorp
Total Assets: $582.25 Billion
Headquarters: Minneapolis, Minnesota
The parent company of U.S. Bank, Bancorp’s locations are mainly in the Midwest. It offers personal and business banking with more than 3,000 branches and 5,000 ATMs. Over the years, Bancorp has worked to become a responsible financial provider and earn a spot on the Ethisphere Institute’s World’s Most Ethical Companies list.
As a Bancorp customer, you can access information about your accounts through Google Home and Amazon Alexa. You may also download the handy mobile app to make mobile deposits and perform other services, like transactions via Zelle.
5. PNC Financial Services Group
Total Assets: $534.35 Billion
Headquarters: Pittsburgh, Pennsylvania
PNC is short for Pittsburgh National Corporation. PNC Financial Services is the bank holding company of PNC Bank, which has more than 2,000 branches across 21 states. It stands out among other large banks for its unique customer perks and products for individuals and business owners. The Virtual Wallet tool, for example, lets you manage your money online or on your mobile device.
You can keep your checking and savings accounts together or just stick to one type of account, depending on your particular needs. In addition to traditional banking services, PNC offers mortgages, home equity lines of credit, auto loans, personal loans and personal lines of credit, student loans, and student loan refinancing.
6. Wells Fargo
Total Assets: $1.71 Trillion
Headquarters: San Francisco, California
Wells Fargo made its debut in 1852 when it was first opened by investing partners, Henry Wells and William Fargo. It was initially designed as a bank and express delivery service for gold. Eventually, Wells Fargo expanded as a consumer bank to serve all types of customers with various banking needs. It is admired for its long list of offerings and the Wells Fargo mobile app that helps customers track their spending and simplify their bills.
While Wells Fargo has focused on consolidating and prioritizing digital banking services in recent years, it still has about 4,700 locations and more than 12,000 ATMs around the U.S.
In addition to personal and small business banking, Wells Fargo supports commercial banking, investing and wealth management, and investment banking.
7. Truist Financial Corporation
Total Assets: $532.08 Billion
Headquarters: Charlotte, North Carolina
Compared to the other large commercial banks on this list, Truist is fairly new. It was formed in 2019 as the result of one of the largest bank merger between BB&T and SunTrust.
Truist is made up of three major divisions, including Truist Bank, Truist Securities, and Truist Insurance Holdings. These divisions employ over 37,000 people that work in consumer and commercial banking, investment banking, mortgages, and insurance.
It offers a variety of noteworthy perks, such as no overdraft fees, a $100 negative balance buffer, and automatic upgrades. The bank also places a lot of emphasis on community involvement and giving back.
8. Goldman Sachs Group, Inc.
Total Assets: $501.91 Billion
Headquarters: New York City, New York
Goldman Sachs was founded in 1869 by Marcus Goldman, a German American shopkeeper. Its original purpose was to help merchants and small businesses with short-term funding. Eventually, Samuel Sachs joined Goldman in 1882. Today, Goldman Sachs has a reputation as a leading global investment banking, management, and securities firm.
In the fall of 2016, Marcus by Goldman Sachs, its online banking division made its debut and began to offer numerous financial products, like savings accounts, certificates of deposit, credit cards, and loans.
In addition to these offerings, Goldman Sachs provides asset management services, mutual funds, investment banking and management, prime brokerage, commodities, and commercial banking.
9. Charles Schwab Corporation
Total Assets: $407.90 Billion
Headquarters: San Francisco, California
Charles Schwab is a multinational financial services firm with a focus on investment accounts, such as individual retirement accounts (IRAs) and brokerage accounts.
You’ll find an extensive selection of funds with low expense ratios as well as commission-free stock and ETF trades. While there are over 360 Charles Schwab branches with financial consultants, you can take advantage of its services online.
Schwab also offers a high-yield checking account. Whether you’re new to investing or consider yourself a veteran, you can benefit from Charles Schwab.
10. TD Group U.S. Holdings
Total Assets: $405.22 Billion
Headquarters: Wilmington, Delaware
While TD Bank has roots in Canada, it’s been in the U.S. market since 2007 when it acquired Commerce Bancorp. There are more than 1,100 branches and 700 ATMs across fifteen U.S. states and Washington D.C.
TD Bank offers the typical lineup of banking products and services but is known for its branch convenience. Most branches have long hours, are open on the weekends, and provide curbside pickup for new debit cards.
If you prefer in-person banking, TD Bank is certainly worth exploring. Many of its accounts come with generous sign up bonuses and access to comprehensive online banking features, such as online bill pay, Zelle, and remote check deposit.
11. Capital One Financial
Total Assets: $388.44 Billion
Headquarters: McLean, Virginia
Since it was established in 1988, Capital One bank is one of the newer large banks on our list. In only a few decades, the bank has grown significantly, thanks to its credit card offerings in the early 90s.
Once 2016 came around, Capital One was named the third-largest credit card issuer in the U.S. These days, Capital One continues to offer credit cards as well as digital services through Capital One 360.
Capital One 360 stands out for its Capital One’s 360 Performance Savings account, which comes with no minimum opening deposit and no minimum balance requirements.
It also has a mobile banking app with mobile check deposit, customized alerts and notifications, Zelle, free credit score monitoring via CreditWise, and more. There are about 775 branches, 2,000 ATMs, and nearly 30 Capital One cafes.
12. Bank of New York Mellon
Total Assets: $365.10 Billion
Headquarters: New York City, New York
Bank of New York Mellon came about after a 2006 merger between Mellon Financial Corporation and The Bank of New York. The Bank of New York was originally founded in 1784 by Alexander Hamilton, the first Secretary of the Treasury of the U.S. Bank of New York Mellon is now one of the largest securities firms in the word.
It specializes in a number of solutions and services for corporations, insurance companies, banks, brokers, dealers, and other reputable clients in the financial industry. In addition, the bank offers private investment and wealth management services for wealthy clients.
13. State Street Corporation
Total Assets: $296.43 Billion
Headquarters: Boston, Massachusetts
State Street Corporation was founded in 1792 as a financial services and asset management company. It has more than 40,000 employees and a global presence in over 100 markets.
Its offerings include investment research and trading, investment management, and securities lending for clients, such as insurance companies, pension funds, and asset owners.
14. Citizens Financial Group
Total Assets: $226.53 Billion
Headquarters: Providence, Rhode Island
Citizens Financial Group, Inc. has been around since 1828. It owns Citizens Bank, its retail division and offers credit cards, deposit accounts, personal loans, student loans, refinancing, and a number of other financial services. Citizen Bank mainly operates in the Northeast and Midwest.
In addition to more than 2,700 ATMs, there are over 1,100 branches in New England states as well as Delaware, Michigan, Ohio, Pennsylvania, New York, and New Jersey. The bank provides extended call center hours, a streamlined online experience, and a highly rated mobile app.
15. Silicon Valley Bank
Total Assets: $211.82 Billion
Headquarters: Santa Clara, California
Silicon Valley Bank made its debut in 1983. Today, it serves as a full-service commercial bank for technology and life sciences companies. Aside from traditional banking services, Silicon Valley Bank offers foreign exchange, venture capital, and treasury management services.
It has supported innovation for several well-known tech companies, including Google and Facebook. Many people give it credit for establishing Silicon Valley.
16. Fifth Third Bank
Total Assets: $205.55 Billion
Headquarters: Cincinnati, Ohio
Fifth Third Bank is a subsidiary of Fifth Third Bancorp and known as one of the largest banks in the Midwest. It has approximately 1,100 branches that span across Ohio, Florida, Georgia, Kentucky, Illinois, Indiana, Michigan, North Carolina, Tennessee, and West Virginia.
As a customer, you can enjoy access to more than 50,000 ATMs across the country and no opening deposit requirements for checking and savings accounts.
In addition to deposit accounts, Fifth Third Bank financial institutions offer mortgages, auto financing, personal loans, insurance, and investing products. Products and services are available to business customers as well.
17. First Republic Bank
Total Assets: $197.91 Billion
Headquarters: San Francisco, California
First Republic Bank is a premier private bank with more than 80 branches across the country. Its vast lineup of products and services includes checking accounts, savings accounts, money market accounts, IRAs, CDs, and wealth management.
Business customers can take advantage of business loans, business lines of credit, commercial real estate loans, and small business loans. The bank focuses on philanthropy and constantly supports programs related to art and education.
18. Morgan Stanley
Total Assets: $191.35 Billion
Headquarters: New York City, New York
Morgan Stanley’s roots date back to 1935. Today, the bank is a reputable, multinational investment management and financial services company. It has over 700 locations in every state as well as Washington D.C.
Its investing division includes three portfolios, including the impact portfolio, market-tracking portfolio, and performance-seeking portfolio. Whether you’re a beginner investor or wealthy client, Morgan Stanley may be a solid pick.
19. KeyBank
Total Assets: $184.67 Billion
Headquarters: Cleveland, Ohio
KeyBank was founded in 1825 and is now considered a community bank with a presence in 15 states. It has more than 40,000 ATMs in its network and 1,000 full-service branches. The bank also partners with the AllPoint Network of over 40,000 ATMs nationwide.
Its standard services include checking accounts, savings accounts, home loans and mortgages, lines of credit, credit cards, investing, insurance, and debt consolidation. In 2021, KeyBank acquired several digital businesses including digital platform XUP Payments and GradFin, a student loan counseling fintech.
20. Ally Bank
Total Assets: $182.2 Billion
Headquarters: Sandy, UT
While it’s based in Utah, Ally Bank is an online only bank with a long list of digital banking solutions. Its deposit accounts come with no monthly maintenance fees or minimum balance requirements.
The bank also pays high yields on CDs and savings accounts than traditional banks with brick-and-mortar banks. As a customer, you can enjoy 24/7 customer services and access to more than 43,000 ATMs through the Allpoint network.
Bottom Line
As you can see, there are many large banks in the United States. Each one has its own unique perks and priorities. To choose the right bank, consider your location, needs, and preferences.
If you’re looking for personal banking services and prefer a digital platform, Goldman Sachs and its Marcus division may be the way to go. But if private wealth management is your top priority, you may be better off with Bank of New York Mellon. Best of luck in your search for the perfect large bank.
Largest Banks in the U.S. FAQs
What is a bank?
Put simply, a bank is a financial institution that can legally accept checking and savings deposits and distribute loans. Some banks also offer additional services like certificates of deposit (CDs), individual retirement accounts (IRAs) and wealth management.
What is the largest bank in the world?
The Industrial and Commercial Bank of China is the largest bank in the world. The bank’s assets add up to $4.324 Trillion.
What are the ten largest banks in the U.S.?
Ranked in total asset value, the ten largest banks in the U.S. include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, U.S. Bancorp, PNC, Truist Bank, Goldman Sachs, Charles Schwab, and TD Group.
How do I choose a bank?
To choose the right bank, focus on what you’re looking for. For more personalized service, you might want to explore a community bank. But if you prefer branch locations across the country and a long list of offerings, one of the large banks on this list might be a better fit.
Is my money safe in a bank?
Your money is safe as long as the bank is insured by the Federal Deposit Insurance Corporation (FDIC). An FDIC-insured bank typically insures up to $250,000 per depositor. Note that you don’t have to purchase FDIC insurance. As long as you’re a customer at a bank that offers it, you’ll receive it automatically.
How does a commercial bank differ from a retail bank?
A commercial bank offers a variety of products and services to both individuals and businesses. Retail banks, on the other hand, focus their offerings to individual customers. If you own a business, you’d be better off with a commercial bank that can serve the financial needs of your organization.
Do online banks exist?
Absolutely! In today’s day and age, online banking is more popular than ever before, among larger banks and smaller banks. While some banks offer in-person and online services, other banks, like Ally Bank, solely operate online with no branch locations.
What are some other large banks not on this list?
Other big banks you might want to consider include First National Bank, Huntington Bank, Provident National Corporation, America Bank, and HSBC Bank USA.
The Dow Jones Industrial average is heading for an imminent change with the expected bankruptcy filing of auto giant General Motors. With the falling out of the once legendary blue chip stock, many of my clients have inquired to how companies get listed on the Dow Jones Industrial Average and when are they replaced. I thought I would give a brief background on the origin of the Dow Jones, with the current holdings as well as what it takes to be listed.
What is the Dow Jones?
It never fails that everyday I get the question, “How did the market do?” or “How’s the market doing?”. The market that everybody is always referring to is the Dow Jones Industrial Average. The Dow (for short) was founded May 26, 1896 initially only having 12 companies from important American industries (hence: “Industrial” average). The Dow currently reflects the top 30 U.S. Companies across it’s various industries. To compute the Dow that you hear about each day, a lengthy geometric formula is used that takes the price-weighted stock price of each company and divides by the “DJIA divisor”. The divisor is a number that is constantly adjust to reflect stock splits, mergers, and dividend payments.
The most common criticism of the Dow is that it only represents 30 companies yet it’s recognized as “The” market indicator. Even though the S&P 500 represents the top 500 US companies and is a better reflection of our economy, when people ask me about the “market”, I assure you it’s not the s&P 500.
Current Holdings Dow Jones
Here’s a look at the current holdings in the Dow Jones:
Company
Symbol
Industry
Date Added
3M
MMM
Diversified industrials
8/9/1976
Alcoa
AA
Aluminum
6/1/1959
American Express
AXP
Consumer finance
8/30/1982
AT&T
T
Telecommunication
11/1/1999
Bank of America
BAC
Institutional and retail banking
2/19/2008
Boeing
BA
Aerospace & defense
3/12/1987
Caterpillar
CAT
Construction and mining equipment
5/6/1991
Chevron Corporation
CVX
Oil and gas
2/19/2008
Citigroup
C
Banking
3/17/1997
Coca-Cola
KO
Beverages
3/12/1987
DuPont
DD
Commodity chemicals
11/20/1935
ExxonMobil
XOM
Integrated oil & gas
10/1/1928
General Electric
GE
Conglomerate
11/7/1907
General Motors
GM
Automobiles
8/31/1925
Hewlett-Packard
HPQ
Diversified computer systems
3/17/1997
The Home Depot
HD
Home improvement retailers
11/1/1999
Intel
INTC
Semiconductors
11/1/1999
IBM
IBM
Computer services
6/29/1979
Johnson & Johnson
JNJ
Pharmaceuticals
3/17/1997
JPMorgan Chase
JPM
Banking
5/6/1991
Kraft Foods
KFT
Food processing
9/22/2008
McDonald’s
MCD
Restaurants & bars
10/30/1985
Merck
MRK
Pharmaceuticals
6/29/1979
Microsoft
MSFT
Software
11/1/1999
Pfizer
PFE
Pharmaceuticals
4/8/2004
Procter & Gamble
PG
Non-durable household products
5/26/1932
United Technologies Corporation
UTX
Aerospace, heating/cooling, elevators
3/14/1939
Verizon Communications
VZ
Telecommunication
4/8/2004
Wal-Mart
WMT
Broadline retailers
3/17/1997
When Does a Stock Get Dropped from the Dow?
A stock is dropped from the Dow Jones when it seems warranted. As mentioned before, General Motors is presumed to be soon removed from the Dow especially if it files for bankruptcy. A likely candidate to join GM is (former) banking giant Citigroup. . Here are some of the more notable changes in recent history:
September 22, 2008: Kraft Foods replaced AIG (American International Group)
February 19, 2008: (My wife’s b’day 🙂 Chevron and Bank of America replaced Altria Group and Honeywell
April 8, 2004: Pfizer, Verizon, and AIG replaced International Paper, AT&T, and Eastman Kodak
Who Will Replace GM?
GM out of the Dow?
There aren’t any preset rules on how a company gets replaced on the Dow. Looking at past replacements, typically the Dow does not replace an exiting company with another in it’s same industry. Currently, there are several speculations on which company is going to replace them. A few possibilities include: Cisco, Visa, Amazon, Wells Fargo, and mother Google. Time will tell.
Update: Cisco and Traveler’s Co. will be replacing GM and Citi at the end of trading June 8, 2009.
The story of the banking industry is, in many ways, the story of America. Immigrant successes, Westward expansion, rebuilding after massive losses, inventing new technology… American banks have been part of all these efforts and more.
This is especially true of the largest banks in America. With international presence and massive amounts of wealth, these banks play an important role in the history and future of world finance.
What’s Ahead:
1. JP Morgan Chase
Assets: $3,380,824M
Number of U.S. branches: 4,828
HQ: Columbus, OH
JP Morgan Chase’s ancestor institution, The Bank of The Manhattan Company, began as a water supplier. In 1799, New York Assemblyman Aaron Burr led an initiative to bring Manhattan residents fresh water. The entrepreneurial Burr used his state charter to start both a waterworks and a bank, which would outlive the water company and merge with Chase Bank in 1955.
Two other large institutions gave the bank its name. Famous financier J. Pierpont Morgan joined an 1871 merchant banking partnership to support American industrial growth. Publisher John Thompson established Chase National Bank in 1877, naming it after friend and Supreme Court Justice Salmon P. Chase. By 1930 Chase National Bank was the world’s largest.
Morgan spurred his firm’s growth by financing the railroad industry in the late 19th century. Struggling railroads like the Erie and the Northern Pacific got “Morganized” with cost-cutting measures and restructuring. Other companies that would later be a part of JP Morgan Chase founded American engineering projects standing today, like the Brooklyn Bridge and the Statue of Liberty. In 1904 J.P. Morgan & Co. financed the Panama Canal with a record-breaking real estate transaction of $40 million.
Later, JP Morgan Chase-affiliated institutions spearheaded 20th-century banking technologies including cash dispensers — the ancestors of ATMs — and home banking services.
2. Bank of America
Assets: $2,440,022M
Number of U.S. branches: 3,895
HQ: Charlotte, NC
Bank of America began in San Francisco as Bank of Italy. It traces its roots to 1904, when founder Amadeo Giannini, an Italian-American, had a vision for a new type of bank.
At the time major banks only catered to the wealthy. The Bank of Italy provided loans to middle and working-class Americans, immigrants, and farmers. Giannini convinced his neighbors, many of whom were fellow immigrants, to keep their money safely in a vault and earn interest. He began operations in a former saloon.
Giannini’s bank grew quickly and changed its name in 1930 to a name he felt better described his mission: Bank of America.
Bank of America continued to make inroads beyond its West Coast headquarters. By Giannini’s death in 1949 the bank was the world’s largest with $6 billion in assets.
In 1958, Bank of America issued the first bank credit card. By 1991, Bank of America had purchased a major California competitor and become the first bank to operate from coast to coast in the United States.
The 2009 acquisition of Merrill Lynch helped turn Bank of America into the largest wealth-management corporation in the world.
3. Citigroup
Assets: $1,720,308M
Number of U.S. branches: 666
HQ: Sioux Falls, SD
When the First Bank of the United States lost its charter in 1811, several of its investors decided to charter their own banks. One of these new banks was the City Bank of New York, founded in June 1812.
It was led by Samuel Osgood, a former member of George Washington’s cabinet and a Revolutionary War veteran. The bank was one of the first institutions to set up an office on Wall Street before the street became a financial hub.
City Bank saw opportunities in the early transportation industry. In the 1850s, bank president Moses Taylor invested in railroads and steamships.
City Bank was also the first American bank to open a department abroad. By 1915 it was the nation’s primary international bank. Texas entrepreneur James Stillman became bank president in 1891 and started trading with countries like Spain, Japan, and Brazil.
After a series of mergers, the former City Bank branched out into a holding company (Citigroup) and a banking business (Citibank) in the 1970s, forming Citigroup Inc. in 1998.
4. Wells Fargo
Assets: $1,712,535M
Number of U.S. branches: 4,739
HQ: Sioux Falls, SD
The California gold rush inspired investing partners Henry Wells and William Fargo to open a new venture in San Francisco in 1852. Wells, Fargo & Co. operated a bank and express delivery service for gold. As gold miners spread to cities and camps throughout California, Wells Fargo & Co. followed.
The company made its name in transportation. Prospectors needed to get their gold from coast to coast. There was a huge market for other transit needs, too, like communicating messages.
Wells Fargo used steamships, ponies, railroads, telegraphs, and stagecoaches to make deliveries across the developing West. They operated the western leg of the Pony Express in 1861 and expanded with the transcontinental railroad in the 1870s.
By 1888, Wells Fargo, using the mottoes “Ocean-to-Ocean” and “Over the Seas,” ran the U.S.’s first national express company and looked towards global expansion. They also boasted the world’s largest collection of stagecoaches and served areas where railroads didn’t run.
5. U.S. Bank
Assets: $582,253M
Number of U.S. branches: 2,251
HQ: Cincinnati, OH
Like most banks on the list, U.S. Bank is the product of multiple mergers. The combined power of several original “legacy” banks across the country, from Oregon to Ohio to Colorado, helped make U.S. Bank the success it is today.
U.S. Bank’s oldest legacy bank, Firstar of Milwaukee, was founded in 1853 as Farmers and Millers Bank. And the administration of President Abraham Lincoln approved the charter for the First National Bank of Cincinnati (later Star Banc) in 1863, in the midst of the Civil War.
San Miguel Valley Bank in Colorado, later part of U.S. Bank, earned its own claim to fame when it was robbed by Butch Cassidy in 1889 — the first bank the outlaw ever robbed.
As American prospectors and businesspeople went West to seek profits, U.S. Bank expanded westward as well. The United States National Bank of Portland opened in 1891 in Oregon. It later formed a holding company called U.S. Bancorp. U.S. Bank locked in its name before a 1913 law prohibited other banks from using “United States” in their names.
Over a century later, in the early 2000s, Firstar of Milwaukee — now much larger and wealthier than the Farmers and Millers Bank of 1853 — combined with U.S. Bancorp. More regional mergers and acquisitions in the 1990s and 2000s added Star Bank, along with regional banks in Missouri and Minnesota, to the U.S. Bank fleet.
6. PNC Bank
Assets: $534,347M
Number of U.S. branches: 2,639
HQ: Wilmington, DE
PNC stands for Pittsburgh National Corporation. In some ways, PNC hasn’t strayed far from its Pennsylvania roots. The company still does business in the same Pittsburgh location where the First National Bank of Pittsburgh opened in the mid-19th century Civil War era.
The bank continued to serve the community during the Great Depression in the 1930s, partnering with Peoples-Pittsburgh Trust Company to finance local improvement projects. They established a simple process for home and auto loan approvals and opened branches in small Pennsylvania manufacturing towns.
In 1983, PNC merged with the bank Provident National Corporation, taking advantage of new laws that permitted statewide banking. At the time, this was the largest merger in U.S. banking history. Conveniently, the two companies had the same initials.
As technology took on a larger role in banking, PNC established a common platform for each of its member banks in 1990. This way, customers had consistent access to the same services. A 1999 acquisition of an investor services group helped PNC branch into the worldwide investment industry.
7. Truist Bank
Assets: $532,080M
Number of U.S. branches: 2,117
HQ: Charlotte, NC
A company with proud Southern roots, Truist began in Atlanta, Georgia, as the Commercial Travelers’ Savings Bank in 1891, with a grocer as its first president. The bank moved into an eight-story building a few years later (the first “skyscraper” in the South) and became Trust Company of Georgia (TCG), focused on investment banking.
TCG also played a role in financing one of the country’s favorite drinks. In 1919, TCG purchased the Coca-Cola company and received $110,000 of shares in Coca-Cola stock.
After becoming a full-service commercial bank in 1933, TCG expanded through Georgia and the southeast. They merged with Florida-based Sun Banks, Inc., in 1985, the largest bank merger in the American southeast at the time. The new company, SunTrust, became one of the first banks to use electronic check transactions in 2004.
A much larger merger followed in 2019, as SunTrust combined with fellow Southern bank BB&T. To start fresh as a new institution, the now-larger bank hired a branding company to come up with an original name. As American Banker reports, many customers thought the name Truist was strange — but this doesn’t seem to have impacted the company’s profits.
8. Goldman Sachs
Assets: $501,906M
Number of U.S. branches: 3
HQ: New York, NY
Marcus Goldman, a German American shopkeeper living in New York City, found a niche in the banking market in 1869. His “commercial paper” trading business helped merchants and small businesses get short-term funds without paying for pricey bank credits. In 1882 his son-in-law Samuel Sachs joined the firm.
The newly named Goldman, Sachs & Co. was trading on the New York Stock Exchange by 1896. Business started booming. They scored big-name clients like Sears, Roebuck & Co., bought overseas banks, and started trading in international currency.
Goldman Sachs is known for pioneering the initial public offering or IPO, a process where a company offers shares of its stock for investors to buy. The IPO has since been essential to the growth of hundreds of companies and is one of the main ways companies raise capital.
9. TD Bank
Assets: $405,223M
Number of U.S. branches: 1,159
HQ: Wilmington, DE
TD Bank has Canadian roots. As the grain industry became more profitable in Canada, a group of merchants and grain millers founded the Bank of Toronto in 1855. A decade later in 1869, The Dominion Bank opened to serve Canadians, and both banks expanded across the country in the early 20th century.
After World War II, the two banks decided to merge in response to the challenges of the postwar economy. Their new combined name, Toronto Dominion (TD), has lasted since 1954.
Post-merger, TD Bank added substantially to its products and services, branching into mutual funds, discount and full-service brokerage, and commercial real estate. In 1987, the bank opened Toronto Dominion Securities Inc. for corporate investors.
Their expansion into the United States began in 2007-8 when TD Bank acquired the U.S.-based Commerce Bancorp. Commerce was known for its convenient hours, open seven days a week and almost 365 days a year. In its new incarnation, TD Bank adopted the tagline “America’s most convenient bank” throughout the U.S. and Canada.
10. Capital One
Assets: $388,440M
Number of U.S. branches: 296
HQ: McLean, VA
Compared to the other big banks in the United States, Capital One hasn’t been around for long at all. It wasn’t founded until 1988.
How did Capital One experience such rapid growth in only a few decades? Part of the answer is its niche expertise as a credit card company. Though Capital One has offered loans and consumer banking since 2005, its greatest profits in its early years came from customers’ desire for credit cards — which were more novel and exciting in the 1990s than they are today.
Capital One was pretty clever at growing its credit card business. The company used data to target customers with personalized offers, and grew its customer base by offering secured cards and joint accounts to customers with less-than-perfect credit. Additionally, Capital One offered the standout feature of letting cardholders design their own cards.
Catching up for its late start, Capital One acquired several other banks and increased its presence in the United States and Canada. By 2016, Capital One was the third-largest credit card issuer in the United States.
Nowadays, in addition to its booming credit card trade, Capital One has consumer banking and commercial banking divisions — including its Capital One 360 services that adapt checking, savings, and money market accounts for the digital age.
11. Bank of New York Mellon (BNY Mellon)
Assets: $365,102M
Number of U.S. branches: 29
HQ: New York, NY
The original Bank of New York (BNY) dates all the way back to 1784, when it was founded by Alexander Hamilton. BNY loans helped finance U.S. infrastructure projects like the Erie Canal and the subway in New York City.
Its future partner, Mellon Financial, got started in 1869 as a wealth management firm. Though the two companies are combined today, they still maintain a separate wealth management business.
In 2006-7, the Bank of New York acquired Mellon Financial and took on the new name BNY Mellon. The new company focuses primarily on corporate banking, including securities and asset management.
This focus is one reason for its huge profits; many of America’s large foundations, pension funds, and other Fortune 500 power players do business with BNY Mellon. By the end of 2020, the bank was servicing more money in assets than any other company in the world.
12. State Street Bank & Trust Co.
Assets: $296,434M
Number of U.S. branches: 2
HQ: Boston, MA
State Street’s predecessor banks date back to the 18th and 19th centuries. In 1792, Union Bank (later National Union Bank) was approved by Massachusetts Governor John Hancock and started business in Boston. They opened a headquarters on Boston’s State Street.
A century later in 1891, their competitor, the State Street Deposit & Trust Co., opened nearby. The two Boston banks merged in 1925 and kept the name of the street they had in common.
One major factor in State Street’s expansion was its embrace of technology and software. In 1973, when computers were still being developed, State Street acquired part of Boston Financial Data Services and began using data processing to improve their accounting and customer service.
When a 1974 law increased companies’ responsibilities to report pension plans to the government, State Street worked on software that helped companies maintain these records. That same year, the bank opened its own data processing headquarters in a Boston suburb.
Summary
The 12 biggest banks in America all have different stories, but also many things in common: savvy entrepreneurs behind them, massive growth fuelled by mergers and banking innovations, and a whole lot of assets in their vaults.