What Is a Regional Bank?
A regional bank is a mid-sized financial institution that typically has a large number of locations—often referred to as branches—across a particular region (e.g., the Midwest, the Pacific Northwest, Texas, etc.). According to the Federal Reserve Board, regional banks are those that have between $10 billion and $100 billion in total assets.
Regional banks are larger than community banks (those with less than $10 million worth of assets) but smaller than national or international “money center” banks. Regional banks offer many of the same customized services provided to consumers by community banks, but they also offer some of the convenience and flexibility of larger national and international banks.
What Services Do Regional Banks Offer Their Customers?
Services vary between banks, but most regional banks offer most or all of the following.
- Deposit accounts like checking, savings, and money market accounts
- Credit cards
- ATMs
- Investment brokerage
- Loans, leases, and mortgages
- Insurance
Popular Regional Banks in the U.S.
There are many regional banks in the U.S. The following are just a few examples.
- Bank of the West
- First Horizon Bank
- Zions Bancorporation
- City National Bank
- Signature Bank
- People's United Bank
What Other Types of Banks Are There?
In addition to regional banks, which are mid-sized and serve both individual customers and businesses, there are also community banks and money center banks.
Community Banks
According to the Federal Reserve Board, community banks are those with less than $10 billion worth of assets. These banks typically serve individuals and small businesses within a relatively limited geographic area and offer services designed to meet the needs of the local community. Due to their small size, these banks may be able to offer loans to individuals who might not qualify for them at larger financial institutions.
Money Center Banks
A money center bank is a large, national or international financial institution that lends money to governments, large businesses, and other banks in addition to handling typical banking customers and small businesses. These banks tend to be headquartered in major cities like New York, and their activities can have major impacts on the economy.
How Can You Invest in Regional Banks?
Investors can purchase shares of stock in individual regional banks via popular trading platforms like WeBull, Fidelity, and Robinhood. Regional bank stocks are popular with dividend investors, as many pay regular dividends. Many regional bank-focused ETFs also exist. These might be good options for more passive investors who want broad exposure to the regional bank market.
5 Popular Bank Stocks Known to Pay Dividends
- First Horizon Corp. (NYSE: FHN)
- Signature Bank (NASDAQ: SBNY)
- Regions Financial Corp. (NYSE: RF)
- Citizens Financial Group (NYSE: CFG)
- KeyCorp (NYSE: KEY)
5 Popular Regional Bank ETFs
- SPDR S&P Regional Banking ETF (NYSEARCA: KRE)
- Direxion Daily Regional Banks Bull 3X Shares (NYSEARCA: DPST)
- First Trust Nasdaq ABA Community Bank Index (NASDAQ: QABA)
- iShares U.S. Regional Banks ETF (NYSEARCA: IAT)
- Invesco KBW Regional Banking ETF (NASDAQ: KBWR)
