Banks are closing down across the country as the industry recovers from the economic downturn of 2020.
In January, TD Bank announced it would close 81 of its 1,223 branches by April, which makes up about 15-percent of its branches. U.S. Bank took more than 300 of its branches off the board in the last few months. Cadence Bank and Bank of America have shut down branches as well.
And if a bank happens to open up a new branch, data from Independent Banker shows the the new branch is usually half the size of one built in years past.
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What’s the cause?
Bank mergers are cited by the National Community Reinvestment Coalition (NCRC) as a key cause of branch closures across the U.S. The advent of virtual banking as a means of depositing checks by phone and mobile banking apps was already on the rise, and it saw a boom in 2020 as people became wary of going out, including to their local bank branch.
When the branch lease is expiring, banks survey the situation and decide to re-up or let it go, and they’re letting it go more often than ever as of late.
The main loser here has been rural areas that may only have a handful of brick-and-mortar branches in the area and now may be down to one or even zero as banks become less and less profitable. When banks realize they need less space to conduct their in-person services, rural, low-volume (or in other words, low-profit) branches are usually the first to go.
Augusta hasn’t been immune to the closures. The Cadence bank branch at Fury’s Ferry and Washington Road is sitting dormant. A Bank of America branch at 2853 Washington Rd., went up for sale just yesterday.
Fifth Third Bank is closing over three dozen bank branches across the 11 states they’re located in. In February, however, the bank expanded its partnership with the Los Angeles Lakers, promoting giveaways and educator spotlights. This move reiterates that banks are exploring avenues to increase visibility in other ways than having branches every couple miles down the road.
The economy is working to shake free of 2020’s shutdown, but with so many aspects of life likely never to return to “normal,” questions remain what the new normal will be for local bank branches, or lack thereof.
Tyler Strong is the Business Editor for The Augusta Press. Reach him at tyler@theaugustapress.com
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