Big Bank Branches are Fewer by the Month

Big Bank Branches are Fewer by the Month

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It seems that every week there’s a new story about a bank that’s closing branches. We’ve almost become numb to it… unless of course it’s our branch that’s shutting down. But its who is closing those branches is what we find interesting.

In 2010, JPMorgan Chase Bank, the nation’s largest bank, had 6,829 branch offices. Today, it is down to 5,166. Similarly, Bank of America, #2 in terms of size, had 6,461 locations in 2010 and today is down to 4,449. That’s a combined loss of 3,675 branches; more than 25% of the branches they operated in 2010 are now gone.

We have a list of the largest 49 U.S. banks, those with assets exceeding $50 billion, along with two branch counts: one from year-end 2020 and the other from now. In less than four months, these 49 banks closed more than 900 branches. And they’re not done. Hundreds more are on the chopping block.

Mind you, not all of these Big Banks are closing offices; a few of them only have one location as it is. But, among those with the broadest branch reach, most are contracting. Those who chose a Big Bank thinking there would always be a branch nearby, may want to think again.

Then there are the oddballs, the Big Banks that added branches in the past four months. There were four:

5-Star Comerica Bank, Dallas TX opened a new branch on South Main Street in Royal Oak, MI (not far from its original headquarters in Detroit) in February of this year. Comerica moved its headquarters to Dallas several years ago, yet the majority (43%) of its branches still hale from the Great Lakes State.

Similarly, 5-Star Signature Bank, New York, NY opened a fifth California branch in Beverly Hills this January. That was its first entry into Beverly Hills but its second in Los Angeles County. After opening its first California branch in 2019 in San Francisco, Signature Bank opened three more offices in the Golden State in 2020 spanning from San Bernardino County in the North to Orange county in the South.

The other two, 4-Star Citibank and 5-Star TD Bank don’t really count because they are planning on closing a lot more than they opened.

Citibank added three branches in the past four months but is waiting on approval to close 28 others; and TD Bank opened one new location, but has 82 pending closure.

5-Star Truist Bank (the new name for the combined SunTrust and BB&T Banks) was required to divest 30 overlapping branches and more than $2.4 billion in deposits as part of its merger approval. It has actually closed more than ten times that number.

Fewer bank branches are a natural byproduct of the digital age. Most of us have gravitated, albeit some begrudgingly, toward digital communication, and that includes banking. COVID-19 has helped speed the process along, but we were already headed in that direction. Even so, people still need access to an actual bank branch, even if only once or twice a year.

For those of us living in big cities, it may be hard to imagine a dearth of bank branches, but think about this: There are only five banks operating in the entire rural county of Decatur, Iowa. Each operates one branch within the county. Three of the branches are in the town of Lamoni and the other two in Leon. All 8,457 county residents must travel to one of those two towns if they wish to be banked in their own county.

But, they do have three good community banks to choose from. 5-Star BTC Bank headquartered in nearby Bethany, MO, which specializes in farm lending (very important in this area) and 5-Star American State Bank, Osceola, IA, which also lends heavily in agriculture, but is a bit more well-rounded (25.6% of its loan portfolio as opposed to 26.2% for BTC). Then there’s 5-Star Farmers Bank of Northern Missouri, which has Farmers in the name. It bests them both at Ag lending with 43% of its total loans going to local farmers.

Now, those living in the White Mountains in the New Hampshire town of Gorham, only have two banks in town, but they’re both good, solid community banks. 5-Star Bank of New Hampshire, headquartered about 80 or 90 miles away in Laconia and 5-Star Northway Bank, headquartered just about 10 minutes down the road in Berlin, NH.

Community banks in rural and low income areas are more than just banks. They are employers who care about their employees and the local economy. They are also big sponsors of local sports teams and events. Community banks treat customers like neighbors and friends, and not because they have to, but because they often are neighbors and friends.

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