U.S. lost 5% of bank branches between 2017 and 2020

In an acceleration of a long-term trend, the number of bank branches in the United States has declined by 5.1% since 2017, a new analysis of regulatory data finds.

At the end of June, banks were operating 81,586 branches, a decrease of around 4,400 from three years earlier, according to a report by the National Community Reinvestment Coalition. The pace of decline — an average of 1,467 branch closures a year — is up from an average of around 800 branch closings a year between 2008 and 2017.

Truist Financial, formed last year by the merger of BB&T and SunTrust Banks, has closed 16.5% of its branches since 2017.
Truist Financial, formed last year by the merger of BB&T and SunTrust Banks, has closed 16.5% of its branches since 2017.

The report’s authors attributed the more recent declines partly to industry consolidation. SunTrust and BB&T, which last year merged to form Truist Financial, closed 16.5% of their combined branches between 2017 and 2020.

“Bank mergers continue to drive large numbers of branch closures,” the report stated.

Branches are also closing because foot traffic is down and many banks are shifting resources to digital channels.

Every U.S. state now has fewer branches than it had three years earlier, the report said, adding that the pattern was more marked in certain metropolitan markets — including New York, Chicago, Hartford, Conn., Phoenix and Portland, Ore. — than others.

The report found that many rural counties, where branch closures can also have a disproportionately large impact, actually saw small increases in the number of branches between 2017 and 2020.

Besides Truist, the banks that accounted for the largest share of the closures were three banks that have not made acquisitions in the last three years. They are: U.S. Bancorp, which had 11.9% fewer branches; KeyCorp, where the branch count declined by 10.6%; and Wells Fargo, which reported a 10.1% decrease.

So far, the COVID-19 pandemic has not increased the rate of decline in bank branches, according to the report. In fact, fewer branches closed between the middle of 2019 and the same time a year later than in each of the two previous 12-month cycles.

“Several possible explanations may be related to the disruption of business wrought by the pandemic,” the report states. “For example, with many branches closed or offering reduced services, local permitting offices operating at reduced capacity and commercial rents in freefall, banks might be reassessing their branch footprints or waiting until the economic outlook is clearer before making commitments related to branch changes.”

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