Consolidation and the growth of large banking organizations do not alter the fundamental competitive advantages that banks enjoy, namely, deposit insurance, reputation and public confidence, branch networks and other delivery systems, and technology. The market for new bank charters makes this point clear. Some 124 new commercial bank charters were issued in 2004, and another 32 in the first quarter of 2005.
Counting these charters, 718 charters have been issued since the beginning of 2000. Over that same period, for every three banks that disappeared through consolidation, another two new charters were granted. In total, the new charters represent about $ billion in new equity capital invested in community bank charters.