Potential homebuyers looking to visit their local bank branch to discuss mortgage options might find the local bank branch is either closed or will soon be closed. A new study by JLL
has tracked a significant decline in the number of branches.
The peak number of branches occurred in 2009 with nearly 100,000 locations. Ten years later, more than 13,200 branches were shuttered. JLL noted that the nation’s 25 largest financial institutions were jettisoning their branches at a crisp pace over the past few years, from 632 in 2016 to almost 1,250 in 2018 to 1,450 branches last year, a 3.7 percent net decline in branches.
But while physical branches are disappearing, JLL found consumers were increasing their branch deposits. According to the new report, branch deposits grew by 4.1 percent last year to $12.8 trillion, and the Federal Deposit Insurance Corp. found that deposits have grown over the past decade by $5.2 trillion, an increase of 68 percent since 2009.
However, it should be noted that branches are also opening – roughly 1,500 new branches debuted last year, and one-fifth of them were part of the top 25 financial institutions.
But what becomes of shuttered branches? JLL found 19 percent of properties were converted into fast-casual restaurants, 17 percent were reinvented as health care facilities, 14 percent became a convenience store, 12 percent became a dollar store, and 9.5 percent became a boutique fitness center.