Most regional banks have reduced their branch networks over the last three years, but there’s been significant divergence in their results, according to Curinos’ BranchScape (see chart).
Institutions in the lower-left quadrant of the chart have aggressively reduced their networks, but their average deposits per branch remain below the industry average. There’s a risk that they let the savings fall to the bottom line without reinvesting some of it in marketing, digital and salesforce to drive growth.
The lower-right quadrant represents banks that have closed branches more slowly than their peers but still lag in deposits per location. For some of them, more network consolidation may be in order, especially if their bubble – which represents their average branch density across their top 20 markets – is relatively large.
Banks at the top half of the chart have higher average balances per branch. Bold consolidations may have driven them from the bottom half to the top. Higher levels of branch profitability have positioned them for continued investment to propel future growth.
Three-Year Branch Count CAGR By Average Retail Deposits Per Branch
Top 100 Banks In The US By Retail Deposits*
The pace of branch consolidations should drive larger branch size,
but only with reinvestment to drive growth.
Sources: Curinos Analysis, Curinos BranchScape
