At least 273 bank locations closed across the United States in May, while 46 opened that month.
Many major banks have announced that they’re closing down branches in 2023, as more and more customers are making deposits via their phones or to keep tabs on their balances, all without leaving their homes.
Others still rely on physical bank branches to do to the bulk of their transactions, and these closures will affect how many conduct their financial affairs. The only branch openings in May were by Big Poppy Holdings and Pinnacle Financial Partners, each of which opened two branches.
Bank Branch Closures Spike in 2023
There were 227 net closings last month, up from 79 in April and the trailing-12-month average of 132, according to a June 30 report from S&P Global Market Intelligence. U.S.-based banks had a total of 78,121 active branches nationwide at the end of May.
U.S. Bancorp, the parent company of U.S. Bank NA, led the way in bank closures, as the lender shuttered the largest number of active branches in the country in May with 133 closings, all in California, and no openings.
The Minneapolis-based lender increased the pace of branch closings again, after slowing down in the months before it completed its acquisition of San Francisco-based MUFG Union Bank NA in December last year.
Over the past 12 months, the bank has closed 194 branches and opened only seven new locations, according to data from S&P Global.
U.S. Bancorp consolidated dozens of branches while it transferred Union Bank customers to its own systems, Jeff Shelman, senior vice president and head of enterprise external communications for U.S. Bank, told S&P Global.
“Both Union Bank customers and U.S. Bank customers have gained access to branch and fee-free ATM locations through the consolidation,” Shelman wrote in an emailed statement. “Of the branches that were consolidated, more than [50 percent] were located within a half mile of another branch and [80 percent] were within a mile of another branch.”
Online Bank Transactions Leading to Fewer Physical Bank Locations
Meanwhile, Wells Fargo & Co. will close the second-largest amount of active locations, and has shuttered 38 branches while just only opening one.
Since early February, Wells Fargo has informed the OCC Bulletin of plans to close roughly 90 branches this year, with more on the docket, reported Best Life. OCC documents do not include closing dates, but banks are required to give at least 90 days’ notice ahead of branch closures.
“Branches continue to play an important role in the way we serve our customers,” a company spokesperson told Best Life.
“Additionally, customers use our wide range of digital capabilities for many of their banking needs and, as a result, more transactions are happening outside the branch. As such, we continuously evaluate our branch network in light of changing customer needs, the increase in the use of digital banking, and market factors.”
Regarding its consumer banking operations, Wells Fargo will continue to rationalize its branch footprint strategy, CFO Michael Santomassimo said on the company’s first-quarter earnings call.
“Our branch network will continue to be the key to the business. But our customers expect us to provide them with increasingly digitized and seamless banking experiences across all channels,” said Wells Fargo president and CEO Charles Scharf to investors.
PNC Financial Services Group, which closed the most branches in March and April, landed in third in May with 30 closings and two openings. The bank is planning to close 30 more branches across seven states in July and is shuttering a total of over 200 locations nationwide, this year.
“PNC recognizes that branches continue to play an important role for many customers when it comes to conducting certain transactions and holding important in-person financial conversations with our banking experts, which is why we routinely evaluate our branch network, together with our other available methods of banking, to determine if we are most effectively meeting our customers’ needs,” a spokesperson told Best Life.
They added, “After a careful review of our business model, PNC’s strategic goals and the potential impact to our customers, the decision was made to close the locations you have listed. We remain committed to delivering on our purpose to move all forward financially, and we are confident that we can meet or exceed our customers’ needs at nearby branch locations, alongside other available methods of banking.”
Santander Bank confirmed that it would shutter 17 locations in July and August, all in Massachusetts, as more of its clients do their business online, CBS News Boston reported. The lender currently has 165 branches in the Bay State.
“Like many industries, our customers’ preferences have changed, with more customers choosing to bank with us online,” Santander wrote in a statement to CBS.
“Therefore, we are reimagining the customer and employee experience by simplifying our processes, refining our branch footprint, and increasing our investment in digital capabilities to align with the evolving needs of our customers.”
The bank told Best Life, “Like many industries, our customers’ preferences have changed, with more customers choosing to bank with us online.”
“Therefore, we are reimagining the customer and employee experience by simplifying our processes, refining our branch footprint, and increasing our investment in digital capabilities to align with the evolving needs of our customers.”
Number of Bank Closures Varies Across the US
Bank branch closures varied by region throughout the country. The West recorded the largest number of net branch closings, with 158 locations being shuttered. The Northeast was at second with 32 closings, followed by the Southeast region with 20.
On a state level, California booked the most net closings at 138, while New Jersey logged 17 closings. New York will shutter 19 branches this summer, as lenders cut back on in-person banking for online transactions.
About 8,000 bank branches were in operation throughout New York in 2000, but that number was halved by 2022, according to FDIC data.
Nine states, Colorado, Connecticut, Delaware, Iowa, Kansas, Kentucky, Maine, Maryland, and Nebraska opened one branch each this year so far.
The Epoch Times reached out to U.S. Bancorp and Wells Fargo for comment.
Article cross-posted from our premium news partners at The Epoch Times.
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