FDIC: Community Bank Branch Counts Hold Steady

Community banks slightly increased their numbers of branches in 2016 and over the previous five years, despite an ongoing trend in reduced branch numbers since 2008, according to the latest issue of the FDIC Quarterly. Reviewing figures from the latest FDIC Summary of Deposits, the article showed that community bank offices grew by 0.2 percent and deposits by 5.8 percent in 2016, while branches of non-community banks dipped by 2.3 percent even as deposits grew by 6.1 percent.

Following longstanding trends, in 2016 all bank branches declined by 1.5 percent to a little under 92,000. Total deposits climbed 5.8 percent to $11.2 trillion, and deposits per office reached $122 million. Deposit growth was fastest in metropolitan areas, which accounted for nearly eight in 10 branches and 93 percent of all deposits.

Rural areas — where community banks hold a majority of deposits and accounted for more than two-thirds of all deposit growth — continue to see higher per-capita banking office penetration, with 4.8 offices per 10,000 people, compared with 2.6 in urban areas. The rate of office closures was also faster in metropolitan and micropolitan areas where branch closures have less of an effect on the availability of financial services in those communities.

The mix of branch types reflects technological changes in delivery of financial services. Traditional brick-and-mortar branches offering transactions, account openings and a loan officer on site accounted for 90.6 percent of all offices and declined in number just 1.2 percent in 2016, while branches co-located in supermarkets and other retail stores declined by 4.7 percent and staffed standalone drive-through locations fell by 4.1 percent.