FDIC QUARTERLY 39

Introduction Deposits across the banking industry grew while the number of offices shrank among 

noncommunity banks and increased among community banks from the previous year, 

according to the 2016 Summary of Deposits (SOD) survey. Meanwhile, offices in energydependent counties reported almost no deposit growth as natural gas, oil, and coal prices fell.

This paper highlights key findings from the 2016 SOD, derived from office and deposit data 

that the FDIC collects from all FDIC-insured institutions as of June 30 each year. Recent 

trends in deposit growth and office contraction continued with the 2016 survey. Community 

banks reported more deposits and more offices, even as the number of offices declined for 

the industry as a whole.

Deposits at noncommunity banks grew faster in metropolitan areas than in micropolitan 

areas and rural areas, although the number of branches of noncommunity banks decreased 

at similar rates in each of those areas. While the total of all deposits in all offices in counties with high exposure to the energy industry did not increase from a year ago, these offices 

have stabilized from the 7.1 percent decrease in deposits noted in the 2015 SOD.

Offices Contract and 

Deposits Grow at a Steady 

Rate Industry Wide

In 2016, FDIC-insured institutions reduced their number of offices by 1.5 percent 

(1,411 offices) to 91,851 for the year ending June 30, 2016 (Chart 1). This decline is on par 

with the 1.5 percent (1,453 offices) year-over-year decrease in 2015 and marks the seventh 

consecutive year that the number of offices has declined. During this period, the largest 

decline occurred in 2014, when office counts dropped 1.7 percent (1,614 offices). Since 2014, 

the rate of decline in offices has fallen but remains higher than the five-year average decline 

of 1.3 percent.1

Total deposits at FDIC-insured institutions increased 5.8 percent to $11.2 trillion from the 

previous year—similar to year-over-year growth in 2015 but slightly lower than the five-year 

average of 6.4 percent. Due in part to the overall contraction in offices, total deposits per 

office grew 7.4 percent to $122 million and the number of offices per 10,000 people declined 

2.3 percent to 2.8 (Chart 2). The number of FDIC-insured institutions totaled 6,058 as of 

June 30, 2016, down from 6,348 one year earlier. Continuing a trend, the number of offices 

per institution increased to 15.2, up 3.2 percent year over year.

Banks Attract More Deposits While Operating Fewer Offices

1 In this analysis, “five-year average” refers to a five-year compound annual growth rate (CAGR).

Sources: FDIC Summary of Deposits and OTS Branch Oce Survey.

Number of Oces

Deposits Increased While the Number of Oces Decreased  

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

0

2

4

6

8

10

12

Number of Oces

Deposits

Deposits ($ Trillions)

Chart 1

Sources: FDIC Summary of Deposits, OTS Branch Oce Survey, and U.S. Census Bureau.

Deposits per Oces ($ Millions)

Oces per 10,000 People Decreased While 

Deposits per Oce Increased

Oces per 10,000 People

0

20

40

60

80

100

120

140

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

0

1

2

3

4

Deposits per Oce

Oces per 10,000 People

Chart 2
2 0 1 7  •Volume 1 1  • Number 1

40 FDIC QUARTERLY

Metropolitan Areas Drive 

Deposit Growth, Rural 

Areas Report Slower 

Office Contraction

Deposits and offices continue to be concentrated in metropolitan areas: As of June 30, 2016, 

79 percent of deposit-taking offices and 93 percent of deposits were located in metropolitan 

areas. The high percentage of offices and deposits in these areas is not surprising, as nearly 

87 percent of the U.S. population lives in a metropolitan area.

Both metropolitan and nonmetropolitan areas reported office contraction and deposit 

growth year over year (Table 1).2 Deposits in metropolitan areas grew 6.1 percent from the 

previous year, compared with increases of 2.6 percent in micropolitan areas and 1.4 percent 

in rural areas. Deposits in metropolitan and micropolitan areas grew at a faster rate than a 

year ago, while deposit growth in rural areas slowed to just over half the rate of the previous 

year. Only micropolitan areas exceeded their five-year average growth rate.

For the third consecutive year, office contraction was slowest in rural areas and fastest in 

micropolitan areas. The number of offices in rural areas declined 1.2 percent from the previous year, compared with declines of 1.5 percent in metropolitan areas and 1.6 percent in 

micropolitan areas. The number of offices declined in metropolitan areas for the seventh 

consecutive year and at a rate faster than their five-year average, while offices declined for 

only the fifth consecutive year in micropolitan and rural areas and at a rate equal to their 

five-year averages.

Office density, defined as the number of offices per 10,000 people, compares the relative 

prevalence of banking services across geographies. Counties in rural and micropolitan areas 

tend to have higher and more stable densities per 10,000 people, while counties in metropolitan areas tend to have lower densities that have fallen more rapidly over time.3

 Continuing 

this trend, in 2016 counties located in rural areas reported an office density of 4.8 compared 

to a reported office density of 3.7 for those in micropolitan areas and 2.6 for those in metropolitan areas (Chart 3).4

 Since 1987, counties in metropolitan areas have reported a loss of 

0.7 offices per 10,000 people, the largest loss of office density among area types.

2 Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants. Micropolitan statistical areas have 

urban clusters of between 10,000 and 50,000 inhabitants. All other areas are classified as rural.

3 See Eric C. Breitenstein and John M. McGee, “Brick and Mortar Banking Remains Prevalent in an Increasingly Virtual World,” 

FDIC Quarterly, Vol. 9, No. 1 (2015), https://www.fdic.gov/bank/analytical/quarterly/2015_vol9_1/FDIC_4Q2014_v9n1_

BrickAndMortar.pdf. 4 Population data for 2016 are forecasted by Moody’s Analytics. Data from 2015 are used as the 2016 forecast for Alaska, Hawaii, 

and Virginia.

Sources: FDIC Summary of Deposits and U.S. Census Bureau.

Number of Oces per 10,000 People by County Type, 1987–2016

Oce Density Across County Types Declined From a Year Ago 

While Dierences Between County Types Remained Stable

0

1

2

3

4

5

6

1987 1991 1995 1999 2003 2007 2011 2015

Metropolitan Counties

Micropolitan Counties

Rural Counties

5.1 4.8

4.1

3.7

3.3

2.6

Chart 3
FDIC QUARTERLY 41

BANKS ATTRACT MORE DEPOSITS WHILE OPERATING FEWER OFFICES

Deposit and Office Trends 

Remain Stable for the 

Largest Office Service Types

The largest reported office service types continued to be brick-and-mortar, retail, and drivethrough offices.5

 Traditional brick-and-mortar offices represented 90.7 percent of all banking offices in 2016, a share that has remained stable since 2001, while retail offices made up 

5.5 percent and drive-through offices comprised 2.6 percent. Continuing a trend that began 

in 2009, the number of brick-and-mortar offices fell 1.2 percent in 2016, a figure in line with 

the five-year average (Table 2). Deposits at brick-and-mortar offices increased 5.8 percent. 

The number of retail offices fell 4.7 percent, accelerating a trend of contraction that began 

in 2012. Deposits at retail offices rose 3.6 percent. The number of drive-through offices 

declined by 4.1 percent. Despite reporting a decline in deposits of 0.5 percent in 2016, drivethrough offices maintained a five-year average deposit growth of 27.3 percent. This high 

average is due to a 165.6 percent increase in reported deposits at drive-through offices from 

2013 to 2014, primarily due to one large institution reclassifying several offices from brickand-mortar to drive-through. All other office types represent 1.3 percent of offices, and their 

number contracted by 2.9 percent in 2016, much faster than the five-year average decline of 

0.2 percent. The average trend of slow contraction for all other office types is driven primarily by an increase in the number of offices reporting as trust offices—the only office service 

type to increase in number for each of the past six years.

Rural Areas Experienced the Slowest Rate of Office Contraction and the Weakest 

Rate of Deposit Growth

Metropolitan Areas Micropolitan Areas Rural Areas

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

June 2016 72,686 10,404 10,045 468 9,120 361

June 2015 73,830 9,803 10,205 456 9,227 356

June 2011 77,584 7,480 10,892 424 9,708 326

1-Year Percent Change -1.5% 6.1% -1.6% 2.6% -1.2% 1.4%

5-Year CAGR -1.3% 6.8% -1.6% 2.0% -1.2% 2.1%

Source: FDIC Summary of Deposits.

Notes: CAGR = Compound Annual Growth Rate. Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants. Micropolitan 

statistical areas have urban clusters of between 10,000 and 50,000 inhabitants. All other areas are classified as rural.

Table 1

All Office Types Declined in 2016

Brick-and-Mortar Offices Retail Offices Drive-Through Facilities Other Office Types

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

June 2016 83,265 10,763 5,016 101 2,348 90 1,222 279

June 2015 84,295 10,172 5,261 97 2,448 91 1,258 255

June 2011 88,207 7,920 5,968 85 2,772 27 1,237 198

1-Year Percent 

Change

-1.2% 5.8% -4.7% 3.6% -4.1% -0.5% -2.9% 9.6%

5-Year CAGR -1.1% 6.3% -3.4% 3.5% -3.3% 27.3% -0.2% 7.1%

Source: FDIC Summary of Deposits.

Note: CAGR = Compound Annual Growth Rate. 

Table 2

5 The SOD survey covers several banking office type categories, including brick-and-mortar, retail, drive-through, mobile, 

seasonal, home banking, trust offices, and more. For a detailed description of all branch service types, see https://www.fdic.gov/

regulations/resources/call/SOD_Instructions.pdf.
2 0 1 7  •Volume 1 1  • Number 1

42 FDIC QUARTERLY

Over a longer horizon, several office service types ran counter to the trend through 2016. 

Home banking offices and trust offices reported positive five-year average growth in the 

number of offices, with home banking offices increasing 1.8 percent and trust offices 

increasing 15.2 percent. Administrative, military, mobile, seasonal, and trust offices reported 

negative five-year average growth in deposits.

Community Bank Offices 

Increase Slightly While 

Noncommunity Bank 

Offices Decline

Unlike noncommunity banks, community banks increased their number of offices from the 

previous year and from five years prior (Table 3).6 Fewer noncommunity bank offices and 

a larger number of community bank offices combined to elevate the share of community 

bank offices from 32.8 percent in 2011 to 35.2 percent in 2016. Community bank offices 

increased 0.2 percent (67 offices) year over year, slightly more than the five-year average 

growth of 0.1 percent per year. The annual increase occurred predominantly in metropolitan areas. Office growth was limited to a small number of institutions, as most community banks (87 percent) reported no change in their total number of offices. Conversely, 

noncommunity banks were much more likely to open and close offices. Nearly 35 percent of 

noncommunity banks reported fewer offices than a year ago, more than six times the rate 

of community banks. Overall, noncommunity bank offices fell by 2.3 percent (1,418 offices), 

a faster pace than their five-year average. This reduction occurred across metropolitan and 

nonmetropolitan areas and in every state.

Noncommunity Banks Reduced Offices While Community Banks 

Maintained Office Numbers

Community Banks Noncommunity Banks

Number of 

Offices

Deposits 

($ billions)

Number of 

Offices

Deposits 

($ billions)

June 2016 32,297 1,752 59,554 9,481

June 2015 32,230 1,657 60,972 8,937

June 2011 32,107 1,415 65,821 6,775

1-Year Percent Change 0.2% 5.8% -2.3% 6.1%

5-Year CAGR 0.1% 4.4% -2.0% 7.0%

Source: FDIC Summary of Deposits.

Notes: Data have been adjusted for mergers. See inset box (page 43) for a detailed description of merger 

adjusting. 

Community banks are identified based on criteria defined in the FDIC Community Banking Study.

CAGR = Compound Annual Growth Rate.

Table 3

6 Community banks are identified based on criteria including asset size and geographic scope of operations. They are defined in 

the FDIC Community Banking Study (2012). Figures in which community and noncommunity banks are compared across time 

periods are adjusted for mergers. No other figures in this analysis were adjusted for mergers, because doing so is required only of 

industry subgroups. For more detail on merger adjusting, see the inset box. 
FDIC QUARTERLY 43

BANKS ATTRACT MORE DEPOSITS WHILE OPERATING FEWER OFFICES

Community and 

Noncommunity Banks 

Report Strong 

Deposit Growth

Deposits increased at community and noncommunity banks. In 2016, community bank 

deposits increased 5.8 percent ($95.3 billion) from a year earlier to $1.75 trillion, with more 

than two-thirds of community banks reporting an annual increase. The growth rate of 

community bank deposits outpaced that of noncommunity banks in all geographic areas 

(Chart 4). In micropolitan and rural areas, community banks held a majority of total 

deposits and accounted for more than 70 percent of deposit growth. In metropolitan areas, 

noncommunity banks held most of the deposits and accounted for more than 85 percent of 

total growth. Total noncommunity bank deposits increased 6.1 percent ($543.5 billion), with 

more than three-quarters of noncommunity banks reporting an annual increase.

Deposit Growth at Community Banks Outpaced Growth at

Noncommunity Banks in All Geographic Areas

Source: FDIC Summary of Deposits.

Note: Metropolitan statistical areas contain a core urban area of greater than 50,000 inhabitants. 

Micropolitan statistical areas have urban clusters of between 10,000 and 50,000 inhabitants. 

All other areas are classied as rural.

6.2

2.2

7.2

3.0

1.9

0

1

2

3

4

5

6

7

8

Metropolitan Areas Micropolitan Areas Rural Areas

Noncommunity Banks

1-Year Deposit Growth (Percent) Community Banks

0.5

Chart 4

The analysis of community and noncommunity banks was 

merger-adjusted with a fixed community bank designation 

as of June 30, 2016. Merger adjusting aligns acquired banks 

and their acquiring institutions in previous periods and 

treats the entities as if the merger had already occurred. 

Thus, if an institution purchased another during the study 

interval, merger adjusting combines the deposits and 

offices of the acquired institution with those of its acquirer 

in all prior periods. In addition, the community and 

noncommunity bank designations were fixed as of June 30, 

2016, for all prior periods. Both of these steps are required 

for a “like-to-like” comparison between quarters.

The process of merger adjusting bank data to fix the groupings as of a point in time is important, because not doing so 

may lead to erroneous conclusions. It is critical to control 

for changes to an institution’s community bank designation 

during the study interval, which is frequently the result 

of a merger. Community bank deposit growth would be 

understated and community bank office reductions would 

be overstated in an analysis that does not merger adjust and 

control for such changes.

Because merger adjusting aligns acquired institutions 

with the existing acquiring institution, institutions that 

voluntarily liquidate and failures resulting in a payout 

were excluded from this analysis. In these cases, there is 

not an existing institution to which to assign the deposits 

and branches. A total of 81 institutions, or 1.1 percent of 

total banks from second quarter 2011, were excluded from 

prior periods in the community and noncommunity bank 

portions of this analysis. These institutions tend to be small 

and account for minor reductions in the total number of 

offices and deposits in prior periods.

How Does Merger Adjusting Work? Why Do It?
2 0 1 7  •Volume 1 1  • Number 1

44 FDIC QUARTERLY

The Number of Offices 

Declines in Most States

The number of offices declined in 45 of the 50 U.S. states between 2015 and 2016, as shown 

in the map below. The number of offices remained the same in two states and increased in 

three others. The number of offices also declined in the District of Columbia, Puerto Rico, 

Guam, and the Northern Mariana Islands. The number of offices did not change in five 

other areas in which banks must file the Summary of Deposits survey.7

The Number of Banks With 

Offices in Multiple States 

Increases

Although the number of banks has declined since the 1980s, the number of banks 

with offices in multiple states has increased. The Riegle-Neal Interstate Banking and Efficiency Act of 1994 permitted interstate bank branching at the federal level, and the number 

of banks with offices in multiple states has grown since then.8 The net number of banks 

with offices in more than one state increased from 688 to 703 between 2015 and 2016. 

During that time, 50 banks that previously operated in only one state added offices in additional states, while six banks that operated in multiple states reduced their operations to only 

one state. Further, 27 banks that operated in multiple states were acquired during the year 

and two closed.

Over the course of the year, 83 banks added offices in additional states and consequently had 

broader branch networks in 2016 than in 2015. Twenty banks operated offices in fewer states 

in 2016 than in 2015.

e Number of Oces Declined in Most States

Source: FDIC Summary of Deposits. 

Oces Declined 1% - 2%

Oces Declined More an 2%

Oces Declined Less an 1%

Oces Were Unchanged

Oce Growth

Map

7 The remaining areas are American Samoa, the Federated States of Micronesia, the Marshall Islands, Palau, and the U.S. Virgin 

Islands.

8 Although some states permitted interstate banking before 1994, interstate banking was not permitted nationally until that year. 

See https://www.fdic.gov/regulations/laws/rules/6500-3500.html.
FDIC QUARTERLY 45

BANKS ATTRACT MORE DEPOSITS WHILE OPERATING FEWER OFFICES

Offices in Counties 

Highly Dependent on 

Energy Activity Show No 

Deposit Growth

Falling prices for energy products such as coal, oil, and natural gas contributed to job losses 

in several parts of the country. Deposit growth was adversely affected in those areas as well. 

Nationwide, the number of jobs in mining increased more than 38 percent between the 

fourth quarter of 2009 and the third quarter of 2014. Subsequent to this increase, the number 

of mining jobs decreased nearly 24 percent between the third quarter of 2014 and the second 

quarter of 2016 as energy prices fell. The U.S. Department of Agriculture (USDA) labels some 

U.S. counties as “mining-dependent,” which includes mining of coal, oil, and natural gas as 

well as support activities.9 Deposits in mining-dependent counties increased considerably 

in the earlier part of the decade, when energy exploration in the United States grew rapidly 

(Chart 5). Deposits in these counties declined in 2015 and were unchanged in 2016, which 

suggests that deposits in those counties may be stabilizing.

Deposit Market Share 

Among Metropolitan Areas 

Shows Little Change

The SOD data allow for analysis of market concentration in various areas. Markets are 

considered to be highly concentrated if a high percentage of deposits are held by a small 

number of institutions. By contrast, if deposits are widely distributed among many institutions, then market concentration is low. Out of 388 metropolitan areas counted in the SOD, 

slightly more than half (201) experienced an increase in market concentration while 187 

experienced a decrease.10

Conclusion The 2016 SOD survey shows that recent trends in deposit growth and office contraction of 

FDIC-insured institutions continued into 2016. Like the overall industry, the vast majority of 

states and territories reported deposit growth and a decline in the number of offices in 2016. 

In addition, metropolitan, micropolitan, and rural areas all reported deposit growth and 

fewer offices. Deposit growth rates in metropolitan areas continue to be higher than those in 

micropolitan and rural areas, but the gap in growth rates has been narrowing in recent years. 

Offices declined most slowly in rural areas for each of the past three years.

Counties With High Exposure to Oil, Natural Gas, and Coal 

Had No Deposit Growth 

Sources: USDA and FDIC Summary of Deposits.

Not Mining-Dependent

Year-Over-Year Deposit Growth (Percent) Mining-Dependent

1.2

7.3 8.3

5.2

6.9 5.9 6.0

10.0 9.3

11.6

10.3

11.8

-7.1

0.0

-8

-3

2

7

12

2010 2011 2012 2013 2014 2015 2016

Chart 5

9 The USDA defines mining-dependent counties as those in which 13 percent or more of the county’s annual labor and 

proprietors’ earnings were derived from mining, or 8 percent or more of jobs were in mining, as measured by the 2010–2012 

Bureau of Economic Analysis, Local Area Personal Income and Employment data http://www.ers.usda.gov/data-products/countytypology-codes/descriptions-and-maps.aspx#mining. 10 Market concentration is measured by the Herfindahl-Hirschman Index (HHI). This calculation is given by comparing the 

deposit share of each bank to total deposits in the area. An index score of 0 indicates perfectly equally distributed market share, 

while a score of 10,000 indicates that a single institution comprises the entire market. A market is considered highly concentrated 

at a score of 2,500. For an explanation of the HHI and how it is used to determine market concentration, see “Horizontal Merger 

Guidelines,” published by the Department of Justice at https://www.justice.gov/atr/horizontal-merger-guidelines-08192010.
2 0 1 7  •Volume 1 1  • Number 1

46 FDIC QUARTERLY

Noncommunity banks drove the overall industry trends in office reductions, as they 

reported fewer offices in metropolitan, micropolitan, and rural areas, and in all states. 

Conversely, the total number of community bank offices increased slightly. Community 

bank office growth occurred predominantly in metropolitan areas and also spanned a 

majority of states. Deposits at both community and noncommunity banks grew at a similar 

pace to that of the industry average. Both groups reported deposit growth in metropolitan, 

micropolitan, and rural areas, and in nearly every state.

Authors:

Nathan L. Hinton

Economic Analyst

Division of Insurance and Research

Derek K. Thieme

Economic Analyst

Division of Insurance and Research

Angela N. Woodhead

Economic Analyst

Division of Insurance and Research