FDIC: Deposit rates slowed but remained steady in 2022

Deposit growth rates for the banking industry moderated for the year ending on June 30, 2022, returning to roughly the pre-pandemic average, the FDIC said today. The report in the most recent FDIC Quarterly found that between June 2021 and June 2022, deposits increased by $895.1 billion (5.2%) to $18.1 trillion. Deposits grew by 21.7% in 2020 and 10.6% in 2021 largely due to conditions created by the pandemic, but the 2022 rate was only slightly below the pre-pandemic average of 5.4%.

Community banks reported deposit growth of 4.8% and noncommunity banks reported deposit growth of 5.3% in 2022, according to the FDIC. However, when adjusted for bank mergers, community bank year-over-year deposit growth was 8.4% and noncommunity bank year-over-year deposit growth was 4.8%. Annual deposit growth rates in metropolitan, micropolitan (areas with populations between 10,000-50,000) and rural areas slowed and converged to between 5% and 6% percent for the year.

The FDIC also reported that the number of bank offices declined by 3.1% between June 2021 and June 2022, which was slightly lower than the historically high decline of 3.8% in 2021 but still higher than the pre-pandemic average of 1.4%. Of the 4,771 banks that existed in June 2022, 556 (11.7%) reported net office openings, 367 (7.7%) reported net office closures and 3,848 (80.7%) reported no net change in office count. Only 11.8% of banks closed any offices. A larger share of noncommunity banks (41.1%) closed offices than did community banks (8.8%).