The banking landscape: More deposits, fewer offices

Deposits are still growing at FDIC-insured institutions, albeit at a slower rate. Meanwhile, the decade-long decline in office numbers continues, though the pattern of closures differs sharply between urban and rural markets. That’s according to the FDIC’s most recent quarterly banking profile.

Total deposits held by FDIC-insured institutions increased to $12.26 trillion in June 2018 from $11.81 trillion in June 2017 — an increase of $450 billion or 3.8 percent.

That year-over-year increase is below the 5.4 percent five-year average annual growth rate for the period ending in 2018.

Deposits per institution increased 8.4 percent to $2.2 billion in 2018. Deposits per office increased 5.9 percent from $131 million in 2017 to $139 million in 2018.

And while deposits increased, the number of institutions has declined to 5,541 from 5,787, and the number of bank offices has declined 2 percent, to 88,053 from 89,839. This rate of decline is the second-fastest in the last decade, ahead of the 1.8 percent annual average.

During the year ended June 2018, non-community banks added offices through bank acquisitions but closed “far more” offices than they opened, the FDIC reported. In contrast, community banks added offices through acquisitions and opened still more offices, on net, during the year.

Over the last five years, total bank offices have dropped by 8.6 percent, down from 96,330 in 2013. Metropolitan areas saw the greatest decrease, down 8.8 percent (6,734 offices) to 69,568. That was followed closely by micropolitan areas with 8.7 percent (932 offices), for a new total of 9,831. Rural areas saw significantly less decline, losing 6.6 percent of their offices (611), down to 8,654.

Community banks saw their greatest reduction in metropolitan areas in that span as well, whether through closures, deals or reclassification. They lost 15.3 percent of metro branches (down to 18,658 from 22,030), 9.9 percent of micropolitan branches (down to 5,579 from 6,189) and 4.6 percent of rural branches (down to 6,314 from 6,620).

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