Bank mergers have resulted in a larger share of industry assets being held by a smaller number of organizations. While 41 banking companies held 25 percent of total domestic deposits in 1984, only 11 companies accounted for the 25 percent share at the end of 1997. If these figures were adjusted to reflect the large mergers recently announced, just seven banking companies would hold 25 percent of domestic deposits. Deposit insurance funds are financially very sound. The current balances of the deposit insurance funds are higher than the Designated Reserve Ratio of 1.25 percent.
Community banks are here to stay.
The number of community banks may have decreased in recent years, but they still account for more than 90 percent of the number of banks and thrifts. Despite concerns that larger institutions will lessen the viability of community banks, new community banks continue to be chartered. Since the beginning of 1995, more than 450 new financial institutions have been chartered, with 200 of those being chartered during 1997. Community banks continue to share in the extraordinary profits achieved by the industry over the past six years. In 1997, small institutions earned an average ROA of 1.14 percent .