For those who live in a bubble with no contact with the outside world; the number of new banks is on the wane. From 1990 to 2008, new banks were formed at the rate of about 100 per year.
Since the “Great Recession” bank formation has all but stopped, partly because of stricter financial regulations and capital requirements. Not to mention the massive consolidation of the industry.
Small banks in particular are becoming scarce. Those with under $10 billion in assets have declined from more than 8,000 15 years ago to fewer than 6,000 today. Many have been absorbed by larger rivals and aren’t being replaced by new banks. Others are being pushed out of business by low interest rates, which hurt profitability. Fewer small banks mean bad news for small businesses.
Community banks have historically been key sources of credit for small firms, especially in rural areas. Larger banks seem to have little to no interest in working with urban and suburban small businesses as well.