FDIC QUARTERLY 31

2017 Summary of Deposits 

Highlights

Deposit growth and office contraction are once again the trends reflected in the Summary 

of Deposits (SOD) survey.1 This paper highlights key findings from the June 30, 2017, SOD 

survey and discusses factors that may be influencing the ongoing decline in the number of 

offices, including branches and main offices, of FDIC-insured institutions. 

Although deposits continued to grow in 2017, the rate of growth has slowed because of slower 

growth in metropolitan areas. Micropolitan and rural areas reported an increase in the 

pace of deposit growth, driven by community banks.2 Community bank deposit growth has 

exceeded noncommunity bank deposit growth on a percentage basis in metropolitan, micropolitan, and rural areas since 2015. The trend of office contraction accelerated in 2017, and 

the greatest declines occurred in metropolitan and micropolitan areas. Less than one-fifth 

of banks reported a net decrease in their number of offices over the past five years. However, 

the reduction in the number of offices by those banks has been large enough to drive a 

sizable decline in the overall number of offices operated by FDIC-insured institutions. This 

continuing trend can be partially attributed to factors such as population migration, office 

expense mitigation, industry consolidation, and financial technology.

Total Deposits of FDICInsured Institutions 

Continue to Grow

Total deposits of all FDIC-insured institutions increased by roughly $570 billion, or 

5.1 percent, from June 2016 to June 2017.3 FDIC-insured institutions held $11.8 trillion in 

deposits in 2017, compared with $11.2 trillion in 2016 (Chart 1). Deposit growth in 2017 was 

lower than the 5.8 percent five-year annual growth rate.4 Deposits grew even as the number 

of institutions and offices declined. As a result, deposits per institution increased 10 percent 

to $2.0 billion in 2017. Deposits per office increased 7.4 percent, from $122 million in 2016 to 

$131 million in 2017.

Deposits Increased in 2017, Continuing a Multiyear Trend

Total Deposits of FDIC-Insured Institutions

Source: FDIC Summary of Deposits.

8.9

11.8

0

2

4

6

8

10

12

14

2012 2013 2014 2015 2016 2017

$ Trillions

Chart 1

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE 

STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

1 The term “deposits” refers to deposits in domestic offices—meaning offices of FDIC-insured institutions located in the United 

States or U.S. territories. U.S. offices of foreign institutions and their deposits are not included.

2 Community banks are identified based on criteria defined in the FDIC Community Banking Study, December 2012, 

https://www.fdic.gov/regulations/resources/cbi/report/cbi-full.pdf. 3 All figures are as of June 30 in any given year, and all growth rates are between SOD filings, which report data as of June 30 

each year.

4 The five-year compound annual growth rate represents the average annual rate of growth that would be necessary to produce 

the net change over five years. For simplicity, it will be referred to here as “five-year annual growth.”
2 0 1 7  •  Volume 1 1  • Number 4

32 FDIC QUARTERLY

Deposit Growth Slowed in 

Metropolitan Counties

Although deposits overall grew at a slower rate in 2017 than in past years, deposit growth in 

micropolitan and rural areas increased.5 In fact, 2017 deposit growth in nonmetropolitan 

areas was higher than at any point over the past five years (Chart 2). Deposits increased by 

3.1 percent in rural areas, which outpaced the five-year annual growth rate of 2.1 percent. 

Similarly, deposits grew by 3.6 percent in micropolitan areas, which exceeded the fiveyear annual growth of 2.2 percent. In contrast, metropolitan areas reported slower deposit 

growth in 2017 than in any of the past five years. Deposits in metropolitan areas increased 

by 5.2 percent, down from the five-year annual growth rate of 6.1 percent. This slowdown in 

deposit growth in metropolitan areas, which account for almost 93 percent of total deposits, 

largely explains the lower growth rate of deposits overall.

e Pace of Deposit Growth Increased in Micropolitan and Rural Counties in 2017

Year-Over-Year Change in Total Deposits by County Type

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

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.

5.2

3.6

3.1

0

1

2

3

4

5

6

7

8

2013 2014 2015 2016 2017

Metropolitan Counties Micropolitan Counties Rural Counties Percent

Chart 2

Deposit Growth at 

Community Banks 

Outpaces Deposit Growth at 

Noncommunity Banks in 

Every County Type

In a reversal of trend, community banks reported greater merger-adjusted deposit growth 

than noncommunity banks in 2017.6 Noncommunity banks, which reported a five-year 

annual deposit growth rate of 6.0 percent, reported an increase in deposits of only 4.9 percent 

in 2017. Community banks, which reported a five-year annual deposit growth rate of only 

4.7 percent, reported a 6.4 percent increase in deposits in 2017.

Deposit growth at community banks has outpaced deposit growth at noncommunity banks 

in micropolitan and rural areas over the past five years, and in recent years has begun to 

outpace noncommunity bank deposit growth in metropolitan areas. Still, as of 2017, the 

five-year annual growth rate of noncommunity banks exceeds that of community banks in 

metropolitan areas (Chart 3).

5 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 counted as rural. Statistical areas consist of one or 

more counties. This analysis uses “areas” and “counties” interchangeably, and refers to the combination of micropolitan and rural 

areas as nonmetropolitan areas.

6 Figures are adjusted for mergers whenever calculations are made for subgroups of institutions. This includes comparing any 

industry subgroups such as those banks that increased, decreased, or maintained office counts, as well as community and 

noncommunity banks. When these groups are compared across time, figures are adjusted for mergers. No other figures in this 

analysis were adjusted for mergers, because doing so is required only of industry subgroups.
FDIC QUARTERLY 33

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Community and Noncommunity Banks Report Strongest Deposit Growth in Metropolitan Counties

Five-Year Average Annual Deposit Growth

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

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.

Percent

6.2

1.5

1.0

6.0

5.5

3.0 2.6

4.7

0

1

2

3

4

5

6

7

Metropolitan Counties Micropolitan Counties Rural Counties All County Types

Noncommunity Banks Community Banks

Chart 3

Noncommunity banks reported a five-year annual increase in deposits of 1.5 percent in 

micropolitan areas and 1.0 percent in rural areas, while community banks reported annual 

increases of 3.0 percent in micropolitan areas and 2.6 percent in rural areas. That disparity continued in 2017, when noncommunity banks reported deposit growth 1.8 percentage 

points lower than community banks in micropolitan areas and 0.9 percentage points lower 

in rural areas.

In metropolitan areas, noncommunity banks reported a five-year annual increase in deposits 

that was 0.7 percentage points higher than community banks. In 2017, however, community 

banks in metropolitan areas reported deposit growth that was 2.5 percentage points higher 

than noncommunity banks. Community bank deposit growth has exceeded noncommunity 

bank deposit growth in metropolitan areas since 2015.

The pace of deposit growth at community banks in 2017 contributed to a year-over-year 

increase in their share of deposits nationally and in metropolitan, micropolitan, and rural 

areas. Over the past five years, however, the community bank share of deposits has risen 

only in nonmetropolitan areas. Community banks continue to hold a majority of deposits 

in micropolitan areas (53 percent) and rural areas (71 percent), while they hold less than 

12 percent of deposits in metropolitan areas. The growth in community bank deposits in 

metropolitan areas over the past five years has not been large enough to offset growth by 

noncommunity banks, and thus the share of deposits held by community banks in metropolitan areas has fallen. Although the decline in the community bank share of deposits in 

metropolitan areas was slight, it was enough to cause the community bank share of total 

deposits to fall from 16.1 percent in 2012 to 15.3 percent in 2017.
2 0 1 7  •  Volume 1 1  • Number 4

34 FDIC QUARTERLY

The Decline in the Number 

of U.S. Banking Offices 

Accelerates

Since reaching a peak of nearly 100,000 in June 2009, the number of banking offices operated by FDIC-insured institutions has declined steadily. The trend continued in 2017, with 

the number of offices declining by 1,977 (2.2 percent) to 89,847. This change represents the 

fastest rate of decline in U.S. banking offices since the trend began in 2010, and exceeds the 

five-year annual decline of 1.6 percent. In all, banking offices operated by FDIC-insured 

institutions have declined by 7,484, or 7.7 percent, over the past five years.

This decline in the number of offices has been driven by a relatively small subset of 

banks—only 17.5 percent of banks reported a net decline in offices between 2012 and 2017. 

A higher percentage of banks, 21.8 percent, actually reported an increase in offices, while 

the remaining 60.7 percent of banks reported no net change in office counts. However, the 

number of offices closed by the few banks that reduced offices outstripped gains in offices 

by the rest of the banks. Banks that reported a decline in the number of offices were more 

likely to be noncommunity banks and were generally larger than those that did not, both in 

average total assets and number of offices (see Table).

A Small Subset of Banks Reduced Offices Enough to Drive the National Office Decline From 2012 to 2017

Institutions That 

Reduced Offices

Institutions That 

Increased Offices

Institutions With 

Unchanged Offices

Number of Institutions 1,013 1,259 3,515

Average Total Assets (Thousands), 2017 $12,439,423 $1,651,278 $631,848

Average Offices per Institution, 2017 58 14 4

Total Change in Offices –10,126 +2,642 0

 Percent of Office Change by Noncommunity Banks 81% 21% 0%

 Percent of Office Change by Community Banks 19% 79% 0%

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Rural Counties Continue 

to Report the Highest 

Office Density

Rural counties maintained the highest office density, defined as offices per 10,000 people, 

while metropolitan, micropolitan, and rural areas all continued to report declines in office 

density at a slow and steady pace.7 Rural areas reported an office density of 4.7 in 2017, 

compared with 3.6 in micropolitan areas and 2.5 in metropolitan areas.

Since 1987, office density has fallen by 0.8 in metropolitan counties, by 0.5 in micropolitan 

counties, and by 0.4 in rural counties. The relatively low rate of decline in office density in 

rural areas is a result of the outsized presence of community banks in those areas. The rate 

of reduction in the number of offices by community banks is lower than among noncommunity banks. Community banks make up 72.4 percent of offices in rural areas, so trends in 

community banks have a large influence on trends in rural areas.

Rural Counties Continue 

to Report Slowest Decline 

in Office Numbers

Rural areas have had the smallest reduction in offices over time, reporting only a 6.4 percent 

decline between 2012 and 2017, compared with 8.4 percent in micropolitan areas and 

7.8 percent in metropolitan areas. Rural areas also reported a smaller year-over-year 

percentage decline in offices in four of the past five years. Micropolitan areas reported 

the largest percentage decrease in offices in three of the past five years (Chart 4). Overall, 

micropolitan areas have reported the largest percentage decline in offices since the national 

trend of office reductions began in 2010.

7 Population data are from Moody’s Analytics. Data for 2017 are forecasted by Moody’s Analytics. Data from 2016 are used as the 

2017 forecast for Alaska, Hawaii, and Virginia.
FDIC QUARTERLY 35

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Micropolitan Counties Have Reported the Largest Percentage Decline in Oces, 

While Rural Counties Have Reported the Smallest Decline 

Year-Over-Year Change in Oces by County Type

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

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.

Percent

-2.5 -2.3

-2.0

-1.5

-1.0

-0.5

0.0

2013 2014 2015 2016 2017

Metropolitan Counties Micropolitan Counties Rural Counties

Chart 4

However, the county type with the largest decline in the number of offices has shifted from 

micropolitan to metropolitan in the past two years. The pace of office closures increased in 

metropolitan areas in 2017. Offices declined 2.3 percent during the year, compared with the 

five-year annual decline of only 1.7 percent. In absolute terms, the vast majority of banking 

offices are located in metropolitan areas. Therefore, it is not surprising that between 2012 

and 2017 the majority of national office closures also have occurred in metropolitan areas, 

even though losses have been higher in micropolitan areas on a percentage basis.

Community Bank Offices 

Increased Slightly in 2017

Noncommunity banks have driven the national decline in the number of offices for many 

years, and were particularly aggressive in office reductions between 2016 and 2017. Noncommunity banks have reduced offices by a total of 7,629 (11.5 percent) over the past five years. 

In 2017, offices operated by noncommunity banks declined by 3.3 percent (2,011 offices)—

a marked increase from the five-year annual decline of 2.4 percent. Nearly half of noncommunity banks reported reduced office counts between 2012 and 2017 (Chart 5). In contrast, 

community banks have been much more likely to maintain their existing offices or grow 

their branch networks. Only 14.9 percent of community banks reported a decline in office 

counts between 2012 and 2017. Community banks operated 31,244 offices in 2017, up 34 

offices (0.1 percent) from the past year and up 145 offices (0.5 percent) from five years ago.

Noncommunity Banks Have Been Much More Likely to Close Oces an Community Banks

2012–2017

Source: FDIC Summary of Deposits.

Noncommunity Banks Community Banks

Decreased Oces Increased Oces Maintained Oces

32%

19%

49% 63%

22%

15%

Chart 5
2 0 1 7  •  Volume 1 1  • Number 4

36 FDIC QUARTERLY

Noncommunity Banks 

Reduced Offices in Both 

Metropolitan and 

Nonmetropolitan Counties

Community banks increased their number of offices in metropolitan areas and overall 

from 2012 to 2017, while noncommunity banks reduced their number of offices in all areas. 

Noncommunity banks reported a five-year annual decline in offices of 3.5 percent in micropolitan areas and 3.6 percent in rural areas, far more than the community bank declines 

of 0.2 percent in micropolitan areas and 0.4 percent in rural areas (Chart 6). The pace of 

office closures among noncommunity banks increased in 2017 as office numbers declined 

by 4.4 percent in micropolitan areas and 3.8 percent in rural areas. In contrast, community 

bank closures slowed. These banks reported no change in offices in micropolitan areas and a 

0.3 percent decrease in offices in rural areas.

In metropolitan areas, noncommunity banks reported a five-year annual decline in offices 

of 2.3 percent, compared with a 0.3 percent increase by community banks. In 2017, noncommunity banks reduced offices by 3.2 percent in metropolitan areas, while community banks 

reported slight office growth of 0.3 percent in these areas.

Between 2012 and 2017, and in 2017 alone, the overall increase in community bank offices 

and the minimal decrease in community bank offices in nonmetropolitan areas led to a rise 

in the community bank share of offices in all areas and nationally.

Community Banks Buck the Trend of O
ce Consolidation in Metropolitan Counties

Five-Year Average Annual Change in O
ces

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

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.

Noncommunity Banks Community Banks Percent

-2.3

-3.5 -3.6

-2.4

0.3

-0.2 -0.4

0.1

-4

-3

-2

-1

0

1

Metropolitan Counties Micropolitan Counties Rural Counties All County Types

Chart 6

Many Factors May Explain 

the National Decline in the 

Number of Offices

More than 7,000 offices have closed during the past five years, and office density has 

declined across the country. A bank may weigh many different factors when making the 

business decision to close offices. For example, measurable factors may include population migration, office expense, industry consolidation, and financial technology. The rest 

of this article explores these factors to see if they contribute to office reductions. Relationships between these factors are likely. Each section of analysis that follows suggests a causal 

relationship, but does not control for other factors, as doing so is outside of the scope of 

this article. The outcome of this analysis suggests these factors should be included in future 

research on this topic.
FDIC QUARTERLY 37

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Rates of Population Decline 

Correspond to Rates of 

Decline in the Number 

of Offices

Some 3,116 U.S. counties were home to banking offices of FDIC-insured institutions in 

either 2012 or 2017.8 Of these, some 1,680 counties (54 percent) lost population over that 

interval according to the most recent annual figures from the U.S. Census Bureau.9 The rate 

of decline in banking offices was measurably higher in counties that lost population than in 

counties where population increased (Chart 7). This pattern suggests that the decline in the 

number of offices may be attributable at least in part to declines in population. However, the 

number of banking offices also declined in counties where population increased over this 

period, which suggests that the general decline in office locations is in part attributable to 

factors other than the loss of population.

Counties With Increasing Population Have Reported the Smallest Rate of Decline 

in the Number of Oces

Change in Number of Oces, 2012 to 2017

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

Note: Each quintile represents 20 percent of U.S. counties, ordered by population growth from 2012 to 2016. 

Percent

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

Quintiles of U.S. Counties Ranked by Population Growth (2012 to 2016)

Largest Population Loss (–16% to –2%) Second Quintile (–2% to –1%) ird Quintile (–1% to 0.5%)

Fourth Quintile (0.5% to 3%) Largest Population Increase (3% to 59%)

Chart 7

Institutions With Higher 

Premises Expense Are More 

Likely to Shed Offices

During the post crisis period, low interest rates have compressed net interest margins 

for banks of all sizes.10 As a result, many institutions have turned to expense controls to 

strengthen their bottom lines. There are multiple ways to analyze whether expenses for 

premises and fixed assets (premises expense) may contribute to a bank’s decision to close 

offices.11 This analysis will consider two of those ways. First, premises expense should 

increase more slowly at banks that reduce offices. Indeed, between 2012 and 2017, banks that 

reduced their number of offices reported an increase in premises expense of 6.3 percent—less 

than the 13.2 percent increase at banks with no change in their number of offices and much 

less than the 23.6 percent increase at banks that increased their number of offices.12

8 This figure excludes population levels in U.S. territories because the U.S. Census Bureau does not produce annual population 

estimates at the county level for territories. For an analysis of population trends at the county level over a longer time period and 

the effect of population changes on banks, see John Anderlik and Richard Cofer, “Long-Term Trends in Rural Depopulation 

and Their Implications for Community Banks,” FDIC Quarterly 8, no. 2 (2014): 44–59, https://www.fdic.gov/bank/analytical/

quarterly/2014-vol8-2/article2.pdf. 9 The most recent annual population figures are from 2016. See U.S. Census Bureau, “County Population Totals Tables: 2010-2016,” 

https://www.census.gov/data/tables/2016/demo/popest/counties-total.html. 10 See Jared Fronk, “Core Profitability of Community Banks: 1985-2015,” FDIC Quarterly 10, no. 4 (2017): 37–44, https://www.fdic.

gov/bank/analytical/quarterly/2016-vol10-4/article1.pdf. 11 Banks list “expenses of premises and fixed assets” in consolidated reports of income. These expenses include rent, property 

taxes, utilities, maintenance, and many other items. For a complete list, see Federal Financial Institutions Examination Council, 

“Line Item Instructions for the Consolidated Report of Income,” https://www.fdic.gov/regulations/resources/call/crinst/2017-

03/317ri-033117.pdf. 12 The analysis of bank premises expense is merger-adjusted. It is important to combine the offices and premises expense of banks 

involved in a merger for a “like-to-like” comparison between years.
2 0 1 7  •  Volume 1 1  • Number 4

38 FDIC QUARTERLY

Second, while it is reasonable to presume that slowing growth in premises expense may 

be a motivation for shedding offices, a stronger case exists if the banks that are reducing 

their numbers of offices have higher premises expense in the first place. In 2012, the average premises expense per office among banks that subsequently reduced their numbers of 

offices was $143,291—much higher than the average of $64,640 at banks that increased their 

numbers of offices. It stands to reason that if high premises expense serves as a motivation 

for reducing office counts, then banks with higher premises expense should be more likely to 

close offices. Indeed, banks in the top 20 percent of premises expense per office in 2012 were 

the most likely to reduce office counts in the following five years, while banks in the lowest 

20 percent of premises expense per office were the least likely (Chart 8). Only 8.4 percent of 

banks with the lowest premises expense per office reduced their number of offices, while 

31.1 percent of banks with the highest premises expense per office reduced their number of 

offices. Similarly, banks in the highest 20 percent of premises expense per office were the 

least likely to increase office counts (Chart 9). Therefore, it is possible that the decline in 

the number of offices is at least partly attributable to a desire by banks to limit increases in 

premises expense or reduce premises expense.

Banks With the Highest Premises Expense per Oce Were More Likely to Reduce

eir Number of Oces

Banks at Reduced Oces From 2012 to 2017

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Percent

Quintile of Banks Ranked by Premises Expense per Oce in 2012

Lowest Premises Expense per Oce Second Quintile ird Quintile

Fourth Quintile Highest Premises Expense per Oce

8

31

0

10

20

30

40

Chart 8

Banks With the Highest Premises Expense per Oce Were Also the Least Likely to Increase 

eir Number of Oces

Banks at Increased Oces From 2012 to 2017

Sources: FDIC Summary of Deposits and Consolidated Reports of Condition and Income.

Percent

Quintile of Banks Ranked by Premises Expense per Oce in 2012

Lowest Premises Expense per Oce Second Quintile ird Quintile

Fourth Quintile Highest Premises Expense per Oce

0

10

20

30

40

23

13

Chart 9
FDIC QUARTERLY 39

FACTORS SHAPING RECENT TRENDS IN BANKING OFFICE STRUCTURE FOR COMMUNITY AND NONCOMMUNITY BANKS

Mergers Between Banks 

Account for Some Reduction 

in Offices

The rate of intercompany bank mergers quadrupled following the financial crisis as the 

wave of post crisis failures receded. The merger rate climbed from 1.0 percent in 2009 to a 

17-year high of 4.0 percent in 2015.13 It is plausible that the increase in merger activity has 

contributed to the decline in offices, as banks may close duplicative offices if two institutions operating in the same area merge. With that in mind, this analysis compares the rate of 

office decline at banks involved in a merger (acquirers) with the rate of decline at banks not 

involved in a merger (nonacquirers).

Merger-adjusted data show that acquirers reduce offices at a higher rate than nonacquirers. 

From 2012 to 2017, acquiring banks reported 2.8 percent fewer offices in the SOD immediately following a merger, double the 1.4 percent rate of office decline at nonacquirers. 

Community bank acquirers shed offices at a slower rate than noncommunity banks, but 

both community and noncommunity bank acquirers report fewer offices between SOD 

filings. Because acquirers close offices at a higher rate than nonacquirers, it is likely that 

mergers account for some of the reduction in total offices. Nevertheless, the 2.8 percent rate 

of office decline at acquirers amounts to a total of 1,409 offices, or just 18.8 percent of total 

office closures from 2012 to 2017. Even if it is likely that many of the 1,409 offices were closed 

as a direct result of the merger, it is clear that mergers account for a relatively small portion 

of the overall decline in offices during this period.

Technology Reduces the 

Need for a Physical Presence

Technology allows traditional interactions between banks and customers to take place 

remotely, reducing the need for banks to maintain a physical presence. In 2015, the FDIC’s 

National Survey of Unbanked and Underbanked Households collected data on the methods 

used by consumers to access their banking accounts.14 The survey showed that fewer than 

half of consumers (49.2 percent) used a bank teller or automated teller machine (ATM) as 

the primary means of accessing their account, down from 56.6 percent in 2013. Online and 

mobile banking were the primary methods used by 46.4 percent of customers, up from 

38.6 percent in 2013. There is nothing to suggest that the trend toward a virtual channel as 

the primary means of accessing a banking account has abated since the survey data were 

collected.

That said, it is also important to keep the trends in context. Consumers continue to demand 

access to tellers and ATMs even as their primary means of accessing their accounts shift. 

Seventy-five percent of households used bank tellers in 2015, and 70 percent of households 

used an ATM or kiosk. This shows that physical offices remain a vital channel for banks to 

deliver financial services to their customers, and that brick-and-mortar banking and electronic banking are more complements than substitutes for one another. This is especially 

true at community banks, where relationship banking plays a larger role. Technology has 

likely lowered the equilibrium number of offices needed to serve customers and thus may 

have contributed to the reduction in bank offices since 2010. However, the evidence also 

suggests that physical banking offices continue to be an important conduit for delivering 

banking services, particularly among community banks.15

13 The merger rate is calculated as the number of banks merged as a percentage of total number of banks at past year-end.

14 Federal Deposit Insurance Corporation, “2015 FDIC National Survey of Unbanked and Underbanked Households,” October 20, 

2016, https://www.fdic.gov/householdsurvey/2015/2015report.pdf. 15 See Eric C. Breitenstein and John M. McGee, “Brick and Mortar Banking Remains Prevalent in an Increasingly Virtual 

World,” FDIC Quarterly 9, no. 1 (2015): 37–51, https://www.fdic.gov/bank/analytical/quarterly/2015-vol9-1/fdic-4q2014-v9n1-

brickandmortar.pdf.
2 0 1 7  •  Volume 1 1  • Number 4

40 FDIC QUARTERLY

Conclusion The 2017 Summary of Deposits data show that recent trends in overall offices and deposits of FDIC-insured institutions continued in the year ending in June 2017. Total deposits 

increased, and they increased at a faster rate among community banks than noncommunity 

banks. The total number of offices decreased, which continues a trend that began in 2010. 

The decline in the number of offices was driven by larger banks that tend to operate in 

metropolitan areas.

Four factors may contribute to the decision to close offices. First, the rate of decline in the 

number of offices at the county level corresponds to the rate of population decline, which 

suggests that banks may, in part, close offices as a result of people moving out of areas that 

they service. Second, the decline in the number of offices seems to be partly driven by a 

desire to increase efficiency and profitability, and institutions with higher premises expense 

per office have reduced office counts at a higher rate than their counterparts. Third, industry 

consolidation likely plays a role in some office closures as the rate of office decline is higher 

among acquirers than nonacquirers. Finally, consumers may have less of a need for physical 

offices for some services as banks have increasingly made those services available digitally.

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