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Top 50 US banks and thrifts in Q4'15 — Wells Fargo overtakes Citi

Wells Fargo &Co. overtook CitigroupInc. to become the third-largest U.S. bank by assets, according to S&PGlobal Market Intelligence's latest pro forma ranking. The bank added more than$36 billion in assets during the fourth quarter, pushing its total assets to $1.788trillion. According to a transcriptof Wells Fargo's fourth-quarter earnings call, the bank issueddebt to help pre-fund the acquisitionof multiple GE Capital Corp.lines of business. This helped push the company's total cash and securities up by$24.24 billion in the fourth quarter.

Citigroup, on the other hand, continued to cut assets during the fourth quarter, endingthe year with $1.729 trillion in pro forma assets. The bank back more than $11 billion of itsdebt during the quarter, $9 billion of which would have become ineligible for totalloss-absorbing capacity in 2019. Citi's total cash and securities fell by $55.06billion during the fourth quarter.

Citi CFO John Gerspach said in a Jan. 21 earnings conference call, according to the transcript,that Citi was able to bring its Global Systemically Important Bank surcharge downto 3% with balance-sheet management, which has allowed the bank to dispose of "lower-returnand non-core assets."

Meanwhile, JPMorganChase & Co. and Bankof America Corp. retained their positions as the largest and second-largestU.S. banks, respectively, by a healthy margin in the fourth quarter.  However, both banks posted a drop in assets duringthe fourth quarter, with JPMorgan posting an almost $69 billion decrease.

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Pro forma adjustmentsin the top 50

In compiling the ranking, S&P Global Market Intelligencecalculated pro forma assets for companies with pending M&A transactions or fordeals that closed after the end of the fourth quarter, as of March 24. In orderto be included in the pro forma adjustments, the deal value must be at least $200million or involve assets or deposits in excess of $1 billion. Loan portfolio dealswere not considered for adjustments.

JPMorgan Chase & Co.'s assets were lowered by $3.96 billionto show the effect of the saleof its subsidiary, Banco Caja Social,to Bogotá, Colombia-based FundaciónSocial. The deal was completed Jan. 7, 2016.

Citigroup's totals have been reduced to reflect the bank's of Santa Tecla,El Salvador-based Banco Citibank deEl Salvador SA and its $1.56 billion in assets and $1.18 billion indeposits to Tegucigalpa, Honduras-based GrupoTerra SA de CV.

The assets of BB&TCorp., ranked 12th, were adjusted upwards by $9.60 billion to take intoaccount its pending acquisitionof Allentown, Pa.-based National PennBancshares Inc. The deal was approvedby regulators in late December and on Jan. 21, BB&T said it expects the transaction to close on or about April1.

Further down the list, KeyCorpretained its position at No. 20, with pro forma total assets of $135.05 billion.The bank is expected to complete its acquisitionof First Niagara Financial Group Inc.in the third quarter. However, New York Governor Andrew Cuomo has called on regulatorsto take action, citing the depositconcentration that would occur in some counties if the deal was allowedto proceed.

Huntington BancsharesInc.'s assets were boosted by $25.52 billion and its deposits by $20.11billion to account for the pending acquisitionof Akron, Ohio-based FirstMerit Corp.,which was announced Jan. 26. The company would have ranked 33rd on the list, insteadof 27th, if the deal had not been announced. Huntington ranked No. 32 at the endof the third quarter of 2015.

New York CommunityBancorp Inc. stands at No. 34 on the list with pro forma assets of $65.39billion. The bank announced Oct. 29, 2015, that it would acquire Lake Success, N.Y.-based S&P Global MarketIntelligence has adjusted the bank's assets by $15.08 billion, while deposits wereincreased by $9.12 billion. The transaction is expected to conclude in the secondquarter.

Methodology

S&P Global Market Intelligence ranks the largest banks andthrifts operating in the U.S. with a deposits-to-assets ratio of at least 25% foreach relevant quarter. Some financial institutions that are regulated as savingsand loan holding companies or bank holding companies, such as New York-based, and , did not meet thiscriteria and thus were excluded from the analysis.

In addition, industrial banks like Salt Lake City-based were also not consideredin this analysis.

New entrant

Coming in at No. 50, Saint Petersburg, Fla.-based wasthe only new addition to the top 50 this quarter. The company reported total assetsand deposits of $26.91 billion and $12.66 billion, respectively, at the end of 2015.

Formerly ranked No. 41, RBCUSA Holdco Corp. was ineligible for the top 50 ranking this quarterafter data disclosed by the company put its deposits-to-assets ratio below 25%.

Note on exceptions

Some deals were not considered in this analysis as they eitherdid not meet the aforementioned criteria, or the companies did not disclose sufficientfinancial information to make pro forma adjustments. For instance, Citigroup's of its subsidiary,Nassau, Bahamas-based Citi HoldingsBahamas Ltd., to Hopkins, Minn.-based CarVal Investors LLC, was not considered in the analysisbecause the target company's assets were not available for adjustments.

Similarly, no adjustments were made for Wells Fargo & Co.'sacquisition of Chicago-basedGeneral Electric Railcar ServicesLLC due to a lack of adequate financial disclosures.

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Click here to access the top 50 table in Excel.

Click here for a template that allows users to view common-sized balance sheets and income statements for five banks.

Click here for a template that shows the performance metrics, balance sheet, income statement, loan/deposit composition and asset quality for a selected banking institution.