By Zuhaib Gull

Data feature produced by S&P Global Market Intelligence research groups in cooperation with the news department to highlight emerging trends and topics of interest.

A look at the top 50 banks and thrifts, by assets, following the release of Q4'15 data.

Wells Fargo & Co. overtook Citigroup Inc. to become the third-largest U.S. bank by assets, according to S&P Global 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 $1.788 trillion. According to a transcript of Wells Fargo's fourth-quarter earnings call, the bank issued debt to help pre-fund the acquisition of 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, ending the year with $1.729 trillion in pro forma assets. The bank bought back more than $11 billion of its debt during the quarter, $9 billion of which would have become ineligible for total loss-absorbing capacity in 2019. Citi's total cash and securities fell by $55.06 billion 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 down to 3% with balance-sheet management, which has allowed the bank to dispose of "lower-return and non-core assets."

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

Pro forma adjustments in the top 50

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

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

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

The assets of BB&T Corp., ranked 12th, were adjusted upwards by $9.60 billion to take into account its pending acquisition of Allentown, Pa.-based National Penn Bancshares Inc. The deal was approved by regulators in late December and on Jan. 21, BB&T said it expects the transaction to close on or about April 1.

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

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

New York Community Bancorp Inc. stands at No. 34 on the list with pro forma assets of $65.39 billion. The bank announced Oct. 29, 2015, that it would acquire Lake Success, N.Y.-based Astoria Financial Corp. S&P Global Market Intelligence has adjusted the bank's assets by $15.08 billion, while deposits were increased by $9.12 billion. The transaction is expected to conclude in the second quarter.

Methodology

S&P Global Market Intelligence ranks the largest banks and thrifts operating in the U.S. with a deposits-to-assets ratio of at least 25% for each relevant quarter. Some financial institutions that are regulated as savings and loan holding companies or bank holding companies, such as New York-based, Goldman Sachs Group Inc. and Morgan Stanley, did not meet this criteria and thus were excluded from the analysis.

In addition, industrial banks like Salt Lake City-based UBS Bank USA were also not considered in this analysis.

New entrant

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

Formerly ranked No. 41, RBC USA Holdco Corp. was ineligible for the top 50 ranking this quarter after 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 either did not meet the aforementioned criteria, or the companies did not disclose sufficient financial information to make pro forma adjustments. For instance, Citigroup's pending sale of its subsidiary, Nassau, Bahamas-based Citi Holdings Bahamas Ltd., to Hopkins, Minn.-based CarVal Investors LLC, was not considered in the analysis because the target company's assets were not available for adjustments.

Similarly, no adjustments were made for Wells Fargo & Co.'s acquisition of Chicago-based General Electric Railcar Services LLC due to a lack of adequate financial disclosures.