US Bank led this new wave with plans to close seven branches, followed by Bank of America with six and Chase with two.
Last week, several banks announced the closure of 15 additional branches in the United States, continuing the trend of moving away from traditional branches.
These closures were reported to the Office of the Comptroller of the Currency (OCC) during the week of July 1-8. The affected branches are located in several states, including Illinois, New Jersey, California and Wisconsin. In the six months since the beginning of the year, more than 400 branches have been closed nationwide.
However, it’s not all bad news for those who prefer or need to do their banking in person. In the same week, banks also opened thirteen new branches, resulting in a net loss of just two branches. This trend of reducing physical branches while expanding online services is expected to continue.
The last year that saw an increase in the number of bank branches in the United States was 2011, with more than 85,000 branches, according to data from the Federal Deposit Insurance Corporation (FDIC). Since then, the number has steadily declined to regarding 70,000.
Major banks like US Bank, Bank of America and Wells Fargo are increasingly confident in their ability to meet customer needs through online banking, especially following being forced to enhance their online presence and services during the pandemic.
Despite the significant investment that must be made in cybersecurity and in the services available to online customers, closing physical branches still results in considerable cost savings.
According to Bancography, an Alabama-based banking consulting firm, the average cost of operating a stand-alone branch is $2.6 million per year, considering all operating and staffing costs, plus location expenses.
Steven Reider, founder and president of Bancography, said in an interview with DailyMail.com that “banks are willing to close a branch that isn’t really overlapping with another one, betting that customers will be willing to drive a little bit farther. I think Bank of America has leaned more toward that than the other big banks.”
Reider also noted that Bank of America’s history of mergers resulted in many branches located in rural areas, which, while cheaper to operate, can be significantly underutilized due to their remote location, and therefore not worth the cost.
In addition, the industry is experiencing a “rural-to-urban conversion. Every census since 1910 has shown a higher proportion of Americans living in urban areas than the previous census, so as we become an increasingly urbanized country, demand in these legacy rural markets simply disappears.”
Banks are now focused on consolidating their presence in key urban markets. For example, Chase is aggressively expanding in Kansas City, Fifth Third Bank is making similar moves in Charlotte and PNC is targeting Austin.
The trend of bank branch closures, which accelerated in the 2010s, was further exacerbated by the pandemic, as it kept people at home and increased reliance on digital banking services.
In 2023 alone, more than 1,500 bank branches were permanently closed, with California and the Midwest being the hardest hit regions. This trend suggests that banks will continue to streamline their operations and focus on improving their online platforms to serve a more digitally inclined customer base.
Bank branches affected by closures
- JPMorgan Chase, Mitchellville, MD, 10200 Lake Arbor Way
- JPMorgan Chase, San Ysidro, CA, 4319 Plaza Road
- Bank of America, Anna, OH, 312 W Main Street
- Bank of America, Chicago, IL, 3033 North Pulaski Road
- Bank of America, Carlyle, IL, 12th & Mullikin Sts
- Bank of America, Edison, NJ, 159 Wood Avenue
- Bank of America, Hartford, SD, 103 South Main Street
- Bank of America, Galena, IL, 953 Gear St
- US Bank, Kansas City, MO, 8750 Blue Ridge Boulevard Extension
- US Bank, Marshfield, MO, 759 West Jackson
- US Bank, Washington, DC, 700 13th Street, N.W.
- US Bank, Chicago, IL, 2639 North Milwaukee Avenue
- US Bank, Wautoma, WI, 450 E Main Street
- US Bank, Las Vegas, NV, 901 South Rancho Lane, Suite 1
- US Bank, Tipton, IA, 102 E 5th St
New bank branches
- JPMorgan Chase Bank, North Little Rock, AR, NWC of John F. Kennedy Boulevard (Hwy 107) and School Drive
- JPMorgan Chase Bank, Charlotte, NC, SWC of Fairview Road and Sharon Road (aka State Route 3600)
- JPMorgan Chase Bank, Mountain Brook, AL, NEC of Cahaba Road and Culver Road
- JPMorgan Chase Bank, Lincoln, NE, SEC of South 66th Street and E O Street (US 34)
- First NB of Pennsylvania, Durham, NC, 1050 Yunus Road
- First NB of Pennsylvania, Summerville, SC, 1307 N Main St
- First NB Texas, Gallup, NM, 1650 W. Maloney Ave
- JPMorgan Chase Bank, Annandale, VA, NWC of John Marr Drive and Tom Davis Drive
- JPMorgan Chase Bank, Falls Church, VA, NWC of Leesburg Pike (aka West Broad Street) & Haycock Road
- JPMorgan Chase Bank, Salt Lake City, UT, SWC of 2100 South and 900 East
- Pacific, Miami, FL, 13101 SW 89th Place, Suite 107
- Fifth Third Bank, Parrish, FL, 11605 Moccasin Wallow Rd
- Bank of America, Oak Park Heights, MN, 5990 Nova Scotia Avenue North.
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