There were 3,989 FDIC-insured in-store branches in the U.S. as of Jan. 21, a 2.3% decline since June 30, 2019, and a 6.5% decline since June 30, 2018, according to S&P Global Market Intelligence's annual report. Total number of branches as of June 30, 2019 stood at 4,082, a decrease of 4.4% year-over-year. In-store branches are bank offices located in a grocery or other type of retail setting.
Despite the decline in in-store bank branches, there was a slight uptick in deposits, the analysis found. Though in-store deposits were at their lowest level since 2014, in-store deposits totaled $84.4 billion in June 2019, an increase of 0.3% from the year prior. The analysis also shows on a same-store basis, yearly deposits grew by 7.2%.
The analysis also notes Woodforest Financial Group ranks number one of in-store branches and number 11 for in-store deposits. The firm, which opened 48 new branches since June 2018, has opened all but seven of its branches in Walmart stores. Per the report, Woodforest now has 736 physical locations and the median deposit size at its physical branches is $2.8 million.
The news of banks closing more branches comes as no surprise given the Federal Reserve issued similar findings in November. The latest S&P report sheds light on how banks are streamlining their brick-and-mortar presence in metropolitan areas, particularly in retail stores.
Huntington Bank, for example, has located about 38% of its branches in Giant Eagle Inc. stores in northeast Ohio, and it also has 96 branches in Meijer locations in the Detroit metro area, per the report. Harris Teeter Inc. took the top spot among store affiliates with American banks, followed by Meijer Inc. and Ralphs Grocery Co, according to S&P’s findings.
Per S&P’s report, Huntington Chairman, President and CEO Stephen Steinour noted during Goldman Sachs Group Inc.’s U.S. financial services conference in December that the bank was "consolidating 30 in-store Giant Eagle branches in the first quarter of 2020. They're largely in the Northeast part of Ohio."
As more consumers migrate over to mobile banking, the need for physical branches is decreasing.
Citibank's 2018 Mobile Banking Study found that 46 percent of U.S. consumers increased their use of mobile banking from the previous year. Eighty-one percent of the respondents said they used mobile banking nine days a month, on average, while nearly a third (31 percent) mobile bank 10 or more times per month.
Banking Dive reached out for comment, but Huntington Bank, TCF Bank and Woodforest Financial have not responded a the time of publication.