The Green Sheet Online Edition
March 23, 2026 • 26:03:02
Merchant : Call reports, 2025
The Federal Financial Institutions Examination Council (FFIEC) publishes quarterly Consolidated Reports of Condition and Income, commonly known as "Call reports." These filings provide one of the most transparent ways to evaluate bank performance, including merchant processing activity.
The table accompanying this article reflects year-end 2024 and 2025 FFIEC Call report data (12/31/24 and 12/31/25). For purposes of this review, megabanks were excluded to better highlight institutions where merchant acquiring is strategically meaningful.
The information in the table is dependent upon the information provided in Call reporting. I know, for example, that Mission Valley Bank and Evolve Bank and Trust are both sponsoring banks, yet their Call reporting does not reflect any processing.
See attached graphic Source: FFIEC Call Reports – cdr.ffiec.gov/public/
A major disruption: The Evolve gap
Not shown in the Table is Evolve Bank & Trust. In 2024, Evolve processed over $53 billion in merchant volume. Yet its 2025 Call report reflects zero processing. While I am unsure if this is accurate, if true, it is an extraordinary shift. Merchant acquiring relationships are difficult to originate, underwrite and scale. But merchant processing is fungible. When volume exits a sponsor bank, it migrates.
The volume migration
Several banks experienced notable growth in 2025:
- Pathward, N.A.: +47% to $211.6 billion
- North American Banking Company: +625%
- Commercial Bank of California: +65%
- Avidia Bank: +53%
- Chesapeake Bank: +25%
- Community Federal Savings Bank: +74%
- First National Bank of Omaha: +74%
North American Banking Co.’s increase, from $1.1 billion to $8.4 billion, stands out. Percentage growth at that scale is impressive.
Processing volume relative to assets Merchant processing volume does not appear on a bank’s balance sheet. However, it absolutely carries:
- BSA/AML risk
- Third-party risk
- Operational risk
- Reputation risk
- Capital and liquidity implications during stress
For that reason, I like to compare processing volume to total assets. Some banks process modest multiples of their assets. Others are much more aggressive:
- Pathward: ~28x assets
- Esquire Bank: ~17x assets
- Axiom Bank: ~15x assets
- FFB Bank: ~10x assets
- Vermont State Bank: ~10x assets
This is not inherently problematic. It is a strategic choice. But it raises a governance question: Has the bank formally defined the maximum processing-to-asset multiple it is willing to tolerate? Establishing a policy ceiling accomplishes two things:
- It communicates that sponsor capacity is finite and valuable.
- It mitigates income and risk concentration.
Contraction and regulatory context
Two institutions in the table experienced meaningful volume declines:
- Axiom Bank: -22%
- FFB Bank: -9.6%
Both institutions were subject to formal regulatory action within the past two years (OCC formal agreement for Axiom in 2024; FDIC consent order for FFB in 2025). Correlation is not causation, but when processing volume significantly exceeds asset size, Regulators will inevitably scrutinize governance, BSA controls and third-party oversight. Processing growth is celebrated. Processing oversight is required.
Non-interest income: The tell
Traditional banks generate earnings primarily from net interest income or the spread between loans and deposits. Acquiring revenue shows up in non-interest income. Acquirers with significant sponsor programs often report elevated non-interest income. While not broken out solely by acquiring in Call reports, the relationship is directionally informative.
Examples not shown in the table include:
- Pathward
- Woodforest
- Community Federal Savings Bank
Each reports non-interest income levels materially high relative to asset size, consistent with meaningful fee-based activity. The market rewards diversification; regulators scrutinize concentration.
The outlier: Vermont State Bank
Tiny Vermont State Bank, which ranked last, at 41 in the 2024 and 2025 FFIEC Call report data, deserves attention.
- Assets: ~$31 million
- Processing volume: ~$304 million
- Growth: +36.5%
- Processing-to-Assets: ~10x
- Non-interest income: ~$9.5 million
That is an extraordinary profile relative to size. It is validation that small banks can compete, but the margin for error narrows as multiples expand.
Final observations
The 2025 Call reports highlight three emerging themes:
- Sponsor volume is fungible. When one bank exits, others rapidly absorb capacity.
- Processing-to-asset multiples are expanding at several institutions.
- Regulatory alignment and third-party risk management remain critical.
Merchant acquiring remains one of the most capital-efficient fee businesses available to banks, but it remains regulator-sensitive. Growth without governance is temporary. 
As founder of Humboldt Merchant Services, co-founder of Eureka Payments, and a former executive for such payments innovators as WePay, a division of JPMorgan Chase, Ken Musante has experience in all aspects of successful ISO building. He currently provides consulting services and expert witness testimony as founder of Napa Payments and Consulting, www.napapaymentsandconsulting.com. Contact him at kenm@napapaymentsandconsulting.com, 707-601-7656 or www.linkedin.com/in/ken-musante-us.
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