U.S: FDIC SAYS BRANCH BANKING DECLINING SLIGHTLY BUT NOT GOING AWAY

Mark Holan
Staff Reporter - Washington Business Journal

Bricks and mortar bank branches appear likely to survive further into the 21st century.

Though the number of branches has dropped off since the Great Recession, there were 94,725 branches nationwide through June, according to an upcoming report by the Federal Deposit Insurance Corp. (There are 425,000 ATMs in the U.S., many right outside those branches.)

"The demise of branch banking has been somewhat exaggerated," FDIC economistRichard Brown told agency's Advisory Committee on Community Banking.

The report will detail how consolidation has led to the emergence of some very large branch networks. It will show that while technology may limit the growth of physical bank offices, "there is no evidence that branch banking is going away."

Here are some key data points Brown shared in his preview of the report, which the FDIC says it hopes to release by the end of the year:

• Since 2008 there has been a net loss of 4,438 branches nationwide.
• Banks with 50 or fewer branches account for nearly 38 percent of total branches, but the number of branches, now 35,946, is declining. Banks with 1,000 or more branches are growing, now 33.6 percent of the total, or 31,874 offices.
• Since 1987, banks with more than $10 billion in assets have grown from an average of 186 branches to 450 branches. Banks under $10 billion in assets now average seven branches, up from four offices 27 years ago.
• Bank branches per capita nationwide was 2.2 branches per 10,000 people in the middle of Great Depression, peaked at 3.4 in the late 1980s and is now 2.9.
• The number of tellers working in bank branches has declined by 45 percent since 1992.
• Major metropolitan counties average 5 branches per 10,000 people; "micropolitan," or mid-sized urban counties average 3.9, and rural counties 2.8.
• Community bank branches have grown 6.5 percent since 1987 while bank charters declined 44 percent; non-community bank branches grew 36 percent as charters declined 71 percent.
• Since 1987, states with the biggest branch gains include Texas, Florida, Georgia, Tennessee, Arkansas, Missouri, Illinois, Wisconsin, Kansas and Colorado.
• States losing the most branches include Maryland and the District, all the New England states, Ohio, Michigan, North Carolina and California.
• Virginia had small gains.

Mark Holan covers the economy and money — banking, finance, private equity, corporate accountability and professional services.