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Home Retail and Marketing

Branch Deposit Statistics: Initial Findings

December 17, 2019
Reading Time: 3 mins read
Branch Deposit Statistics: Initial Findings

By Steve Reider

In October, the FDIC published its annual branch deposit statistics, with data as of June 30. In concert with the NCUA’s institution-level deposit statistics of the same period, the data provide a snapshot of the deposit and branching environment in the U.S. In the past year, retail and small business deposits grew at a 3.0 percent pace (down from 3.3 percent in the prior years), the slowest level since 2014 and second-lowest level since 2011. Total deposits, including corporate and municipal balances, grew by 4.3 percent from 2018-2019, also among the lowest levels in the past ten years.

Notably, credit unions enjoyed greater proportionate growth than banks in the past year, growing deposits by 6 percent versus 2.4 percent for banks. Credit unions’ share of total U.S. deposits has inched upward in recent years, rising from 8.6 percent in 2015 to 9.2 percent in 2019.

Branch counts continue to erode, but at a modest pace.

The industry shed a net 1,600 branches over the past year, leaving the U.S. overall with 105,000 branches, a 6 percent decline from 2015 levels. U.S. banks now maintain about 86,000 branches and credit unions 19,000 branches.

Deposit growth and branch growth (or loss) varied by region. Examining a four-year trend, the Orlando metro posted the top deposit-growth level among all large U.S. metros (defined as those with at least one million residents). Retail and small business deposits in the Orlando metro grew at a 7.1 percent compound annual rate over the past four years, edging past the next-ranking Raleigh and Washington, D.C. metros, which each showed 6.3 percent CAGRs from 2015 – 2019. Notably, the Raleigh and Orlando metros ranked second and third, respectively, in the large-metro peer group in terms of household growth rate in that period.

Four other large metros showed four-year deposit CAGRs in the 6 percent range: Phoenix, Seattle, Las Vegas and Grand Rapids. Phoenix, Seattle and Las Vegas all ranked between 10th and 15th in household growth among the 53 metros with one million or more residents, again showing a correlation between household and deposit growth.

At the opposite end of the spectrum, deposits in the New Orleans metro remained essentially unchanged over the past four years, while the Pittsburgh, Houston, New York, Birmingham, Alabama and St. Louis metros eked out annual deposit growth in only the 1.5 percent-2.5 percent range. Each of those markets also ranked in the bottom quartile of household growth within the large-metro peer group, with the exception of Houston, where tepid deposit growth belied top-tier household growth.

Within the large-metro peer group, all but six markets experienced declines in branch counts over the past year. The six markets that showed net branch gains included high-growth metros such as San Antonio, Austin and San Jose, as well as moderate-growth markets Kansas City, Grand Rapids and St. Louis. Still, even the top-ranking markets in this group posted net additions of only four branches, essentially flat relative to their starting inventories of 400-1,100 branches. In contrast, seven metros showed net declines of at least 30 branches over the past year: New York, Chicago, Washington D.C., Los Angeles, Miami, Atlanta and Detroit. However, in proportionate terms, the Jacksonville, New York, Richmond, Tampa, Washington D.C. and Charlotte metros displayed the greatest level of branch contraction, each shedding about 3 percent of their 2018 branch inventories in the past year.

Steve Reider is president of Bancography, based in Birmingham, Ala. Bancography provides consulting services, software tools, and marketing research to financial institutions. Email: [email protected]

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