Banks have been leapfrogging their way up the asset-size ranks through acquisition, according to an American Banker survey.
"Change," said David S. Berry, research director at Keefe, Bruyette & Woods in New York, "is really coming quickly."
Southern National Corp., Winston-Salem, N.C., jumped from 66th place in June 1994 to No. 36 through its merger with BB&T Financial Corp. Memphis- based Union Planters Corp. jumped 12 spots, to No. 66, while Hibernia Corp., New Orleans, climbed from 92d to 81st.
The impetus for all the activity has been slack revenue growth. According to Carole Berger, a bank analyst at Salomon Brothers in New York, mergers and acquisitions will continue apace as banks continue to have a hard time making money.
"If revenue growth was really robust, then the banks would be happy the way things are," she said. "But revenue growth has not been at all spectacular."
The trend is bound to continue. Ms. Berger said she expected revenue growth will remain extremely difficult to achieve.
Meanwhile, assets and deposits have grown sizably at banks across the board. And more of that money is being held by the biggest banks and thrifts, according to the survey, which this year has been expanded to include the top 200 bank holding companies.
Since Dec. 31, for instance, total assets held by all banks and thrifts has increased 3.4%, to $5.2 trillion, according to the survey. But at the top 100 commercial bank holding companies assets, helped by acquisitions, rose 5.3% to $3.2 trillion. As a result, the top 100 banks increased their share of the assets held by all banks and thrifts - to 61.6, from 60.5% on Dec. 31.
The concentration of total assets among the top 100 bank holding companies is even more dramatic when compared with figures from nearly seven years ago. At the end of 1988, according to the survey, the top 100 banks held only 44.6% of all bank and thrift assets.
Similarly, the top 100's deposit share has grown over the first six months of 1995, from 54.8% to 55.2%.
Southern National Corp.'s deposits have more than doubled over the past year, from $6.2 billion to $14.3 billion. Its assets have more than doubled as well, from $8.2 billion to $20.7 billion.
"I think we're going to see more and more control among a handful of institutions," said Mr. Berry. "But it won't necessarily be just 10. America is a big place."
What has not grown during the binge of mergers and acquisitions over the past three years is the number of bank and thrift employees. Nearly 42,000 have lost their jobs since yearend 1992, the survey shows.
But as the work force shrinks, the biggest banks continue to increase their share. The top 100 accounted for 66.3% of employment six months ago; now, they account for 67%, according to the survey. The current total of bank and thrift workers is 1.73 million.
The trend towards a shrinking banking world, one in which the largest players hold the bulk of money and employees, will continue. That, according to Mr. Berry and other analysts, will mean continual changes in the rankings of banks and thrifts.
Should First Interstate Corp. and Wells Fargo & Co. merge, for instance, the combined entity would rank among the top 10. Both banks now sit in the second 10.
What remains to be seen is which bank or banks will reach down the list and acquire midrange banks like Union Planters or Hibernia.
As far as mergers go, "maybe you couldn't do all this (merging to get productivity gains) 10 years ago," Mr. Berry said. "But I think there's a will to do these things and a technological way to do these things."