Why Bank of America Is Leaving Your Neighborhood

Have you noticed there are fewer and fewer Bank of America  (NYSE: BAC  ) branches in your neighborhood? Well, its true. And the reason they are leaving is... you.

Bain, a consultancy, recently found in a survey of people across the globe, of the major banks in the United States, Bank of America's customers were the least likely to visit the bank's branches. Less than 60% of its customers had visited a branch for a routine transaction within the most recent quarter, which was significantly lower than the national average of more than 70%.

According to the most recent data from the FDIC, Bank of America had the highest number of deposits in the U.S., with almost $1.2 trillion at the end of the second quarter. This marked the 14th year in a row Bank of America held the top spot, as it bested peers Wells Fargo (NYSE: WFC  ) and JPMorgan Chase by $175 billion and $195 billion, respectively.

As you can see in the chart below, it holds a commanding position when compared to the other five largest banks.

Deposits (in billions)

Bank

2013

Bank of America

$1,147

Wells Fargo

$972

JPMorgan Chase

$952

Citigroup

$448

U.S. Bancorp

$235

Source: FDIC.

Bank of America managed this even without holding the title of having the most branches. Its 5,401 branches at the end of the second quarter of this year placed it behind Wells Fargo (6,297 branches) and JPMorgan (5,697) for third on the list.

But as you can see in the chart below, when compared to the five banks mentioned above, Bank of America has been steadily decreasing its total branch count since 2009:


Source: FDIC.

Interestingly, this reduction in branches hasn't resulted in the total level of deposits at Bank of America going down -- those have actually increased by $239 billion since 2009:


Source: FDIC.

Of course, on a raw percentage basis, Bank of America hasn't been able to match that of its peers, but it has still maintained its approximate 12% share of total U.S. deposits.

The shift
One possible explanation for this is the rapid growth in Bank of America's mobile user base, which in the third quarter stood at almost 14 million, an increase of almost 26% over the same time last year. Bank of America has also aggressively pursued new ways to interact with its customers, including install new "express banking centers," with extended hours and video screens that allow customers to talk to a teller if they desire.

The previously mentioned Bain study noted, "customers have embraced banking on their smartphones and tablets when banks offer applications that are both useful and easy to navigate," and that "mobile tools have a strong, positive effect on customer advocacy."

One reason Bank of America is navigating away from the branch model seems to be because that's what its customers are doing, too.

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Read/Post Comments (29) | Recommend This Article (18)

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  • Report this Comment On December 07, 2013, at 3:13 PM, Ginsue wrote:

    The reason BOFA customers are not visiting the brick and mortar branches as much, is because BOFA has "systematically", over the last three to five years, "steered" customers away from the branches and into the webosphere.

    I've been with BOFA and its iterations since 1972...when BOFA employees tell the customers that BOFA is trying to reduce use of the service centers and have everyone go to web-based services, I'd say that's proof that the "customers" did NOT generate this phenomena. I began hearing those remarks from Tellers and Branch Managers in 2006! The PUSH really began about three years ago. BOFA began "steering" customers into checking/savings accts that are purely web-based with "reduced banking fees". However, the customer is "penalized" for walking into a branch for services...they get charged additional monthly fees or a per service fee.

    I get extremely irritated when so-called "surveys" (usually contracted and paid for by the company or industry in question) spin the truth to make the "customer" seem to be the one "generating" the change. In this case, BOFA has ensured its business model morphs to where it can reduce manpower for the bottom line. It's not the customer...we're STILL paying high fees for the use of our own money...

  • Report this Comment On December 07, 2013, at 3:33 PM, Joekster wrote:

    So an angry customer has a harder time finding someone to punch in the mouth.

  • Report this Comment On December 07, 2013, at 4:05 PM, jims1950 wrote:

    maybe they will leave the country! soon!

  • Report this Comment On December 07, 2013, at 4:37 PM, DaveAlso wrote:

    Having worked for a bank, I know why they are leaving. I was on a conference call back when Reg E was put into law. (the overdraft law)

    What it boils down to is that the banks were making money hand over fist in poor neighborhoods with overdraft fees. They didn't care about deposits as much as how much they could rake poor people over the coals.

    I was on a conference call where the main topic was how to word an opting in to overdrafts. It was disgusting and revolting to hear that the only reason they were in poor neighborhoods was to squeeze more blood from the turnip.

  • Report this Comment On December 07, 2013, at 5:06 PM, NunyaBiznezz wrote:

    I would go to my branch more often, but the nearest one is over 20 miles away. Try putting a branch in my town and I would go more often. Until then I'll use their mobile banking app and only go to my "local" branch when absolutely necessary.

  • Report this Comment On December 07, 2013, at 5:26 PM, dodgedriver2012 wrote:

    I use to be a customer with bank of america and they sucked they ripped me off of thousand of dollars causing creditors that i paid to come after me because my back claimed that i over draft when i have several thousands of dollars in my checking account and only took over a 500.00 and claim that i over draft on my account i have no sympathy for this company and I hope to god that they go out of business and but some other kind of bank in it place i know this much that after the settlement i got a lousy 14.50 from them what a rip off

  • Report this Comment On December 07, 2013, at 6:16 PM, latinaangel wrote:

    bank of america the worst bank to deal with. hurt so many honest hard working people with their practices. but you can only blame them. got to blame the powers to be that bailed them out and have allowed them to destroy families ,neighborhoods and lives for the almighty dollar. the more than can control steal and corrupt the bigger they become. . i know because im one of those they hurt. but as long as its allowed by powerful people in business and government it will continue til there is nothing left for them to take . they will have it all at our expense. sad because life was simpler when there was , values and good honest business practices and your word meant something. people meant something

  • Report this Comment On December 07, 2013, at 8:02 PM, Rusty56 wrote:

    A lot of whiners who don't pay their bills here it seems!

  • Report this Comment On December 07, 2013, at 8:33 PM, hjhater wrote:

    Boy, this is a suprize. 50 years ago, I had a beef with BofA. I left BofA, never to return. My parents were BofA customers. When they passed, BofA was the toughest Bank to deal with. I would NEVER put any money in BofA. I find it hard to believe that they are still in business. I guess some people are VERY nanive.

  • Report this Comment On December 07, 2013, at 9:46 PM, PaintItBlue wrote:

    Are they counting the "customers" who just have credit cards?

  • Report this Comment On December 07, 2013, at 9:59 PM, ancientgreek1 wrote:

    I wish BoFA would leave my neighborhood because I fell like I'm going to throw up every time I see there freaking sign

  • Report this Comment On December 07, 2013, at 10:17 PM, foolofshit wrote:

    BOA has just pulled out of my community & sold it's assets to an unknown regional bank. the vast majority of people are pulling their accounts out & moving to 1 of 3 other banks, one of them is a regional bank with an outstanding reputation of quality customer service!

  • Report this Comment On December 07, 2013, at 10:32 PM, jazzman100 wrote:

    @davealso I also worked for the banking industry at one time, but I believe Requlation E is mainly about "Electronic Funds Transfers, not so much about the overdraft law. All banks charge an overdraft fee, that is told to you when you open an account with the bank. The customer is responsible for keeping up with their spending. Thats why the bank has check registers, so the customer can write down their transactions. It does not matter if the bank is trying to target poor people, it is everyone's responsibility if they are poor or rich to keep up with the money they have in the bank. Everyone that has an account with the banks, can keep the banks from making money from overdraft by keeping up with their money in the bank. Why work hard for your money, and not keep up with it. Your working for the bank when you overdraft, thats free money for them. Banks are out to make money on everyone, not just the poor. I have seen alot of people who have money and overdraft. I had a customer who paid about $4000.00 in overdraft fees in one year, when i was talking to her about how I can help her stop paying all this money to the bank, she just had I do not care look on her face. Is this the bank's fault or her own fault?

  • Report this Comment On December 07, 2013, at 11:45 PM, Burrloin wrote:

    Very poor customer service. No wonder people don't want to visit a Bank of America branch.

  • Report this Comment On December 08, 2013, at 12:04 AM, commoncents99 wrote:

    Thank your government for all the bogus regulation which make banks difficult to deal with....!!!!!

  • Report this Comment On December 08, 2013, at 3:34 AM, Topcoatsgrl wrote:

    Good riddance! Bank of America sucks. I am sick of the fees for going into he branch to cash my check. Oh, I'm sorry I didn't know you didn't want my money in your bank because your too lazy to put it in there. I will just drive the 10 miles back home and take a picture and put it in their from my phone. Seems logical since I didn't want to talk to anyone today anyways. When I was a kid my mom always took me to the bank with her to see how a transaction was conducted. Wow, now I realize that was a waste of time. The banks want your money, but they don't want to do anything to get it. Hey I know...I will just keep my money and you all can sit on your lazy butts and not have jobs. Sounds good to me. :D

  • Report this Comment On December 08, 2013, at 4:24 AM, siddharthrpatel wrote:

    Since BofA got caught with their pants down, it's hard to find suckers anymore.

  • Report this Comment On December 08, 2013, at 8:14 AM, Rusty56 wrote:

    Mostly losers here whining about how they don't pay their bills properly. But it's always the big bad banks fault - LPL.

  • Report this Comment On December 08, 2013, at 9:20 AM, clockwork1angel wrote:

    BS ...they are either loosing customers and forcing people to use online banking so they can get rid of the up close and personal contacts in which u.s. jobs are being sent overseas...and you wonder how your personal info can get stolen and is being sold in some 3rd world country..you who bank online have been turned into the "teller" and some of you are even paying a OLB fee lol...banks are not so stupid when they can force you into doing the tellers job ..or the collapse of the U.S. financial market is now truly being seen...to big to fail ? I think not.

  • Report this Comment On December 08, 2013, at 10:11 AM, ramona wrote:

    Just a little FYI... Google Bank of Italy (United States). I'm sure this bank doesn't have Vatican and Mafia connections :)

  • Report this Comment On December 08, 2013, at 5:08 PM, overnightdeejay wrote:

    both my wife and I had several accounts with BofA.. then in 2005, it was reported that the bank was actively marketing mortgage loans to illegal alien non US citizens without even requiring an SSN..

    when I asked about this policy at my local branch, I was called an 'idiot' but the teller.. this was just one of several instances of poor customer service both locally, and with the BofA national customer service.. then there were several instances of either misappropriating payments so as to collect the most fees and interest possible, or lost payments, then made late, through incompetence of the tellers.. Both my wife and I warned BofA that if they continued, we would refi our mortgage, and auto loans, and close our accounts..

    it took me more than a year, but we finally did it... the bank lost a total of 8 accounts, worth several hundred thousand altogether.. and never once even noticed we had left...

    its my sincere hope they collapse under the weight of their own arrogance and greed.

  • Report this Comment On December 08, 2013, at 7:22 PM, countusin2 wrote:

    BoA allowed an employee who was not authorized to write checks on my business account, write check after check and forge my signature to the checks...

    to the point i lost my business...

    and their response was ...... its not our responsibility to know if person writing the checks is authorized to use the account...

  • Report this Comment On December 08, 2013, at 7:43 PM, SkepikI wrote:

    So, just out of curiosity, your article does not explore if the size of deposits or the numbers of customers are increasing, or both. I'd be very interested to know if BOA marketing has been able to sucker more individual customers into being depositors, or they have lured in bigger deposits by driving off "the riff-raff"....

    I've steered clear of this disaster since my very first bad experience with them in 1974, and I am VERY glad to have done so. If your experience was good and you are sticking with them, welcome to it, but beware. There is a lot more commentary from rational, frugal and economically competent individuals here than you think....

  • Report this Comment On December 10, 2013, at 10:16 PM, mountain8 wrote:

    Just a cursory observation. Most who have commented and left BoA, don't know how to spell or construct a sentence. My bet is they can't balance a checkbook either.

    I don't bank at BoA, or any other bank. I'm with a very solid credit union. I do, however, own BoA Stock which has returned 30% since my first purchase last January. BoA's going to grow greatly as it trims it's fat. Sorry you all don't know anything about investing.

    P.S. I know BoA has made some BIG mistakes. It's also made some good moves. One has to look into it in depth before INVESTING.

    Merry Christmas

  • Report this Comment On December 11, 2013, at 3:14 AM, Lucaskasan wrote:

    "One possible explanation for this is the rapid growth" might be the fact that California Unenployment requires benefit recipients to have a BofA debit card. Who knows how many other states did the same. So state government handed BofA new customers on a silver platter, while other banks must attract new customers on their own merits.

    "it was reported that the bank was actively marketing mortgage loans to illegal alien non US citizens without even requiring an SSN.. " A person does not have to be a US citizen to get a mortgage loan to buy property located in the US. Such buyers are also not required to have a SSN, therefore it stands to reason that even illegals can get a loan IF they can qualify. I can tell you 99% of illegals cannot qualify, so that sounds like one of those "reports" from dubious sources.

  • Report this Comment On December 11, 2013, at 3:19 AM, srjenkins wrote:

    We banked at BAC for 40 years. BAC branch operations disappeared, and anything requiring more than the web must be done elsewhere anyway. BAC gave us to another bank. That was interesting. You can feel the love. It's almost tangible.

    Market share and perceived customer service always hold hands.

  • Report this Comment On December 11, 2013, at 1:52 PM, marcin97 wrote:

    @mountain8

    It's and its, get it?

  • Report this Comment On December 12, 2013, at 12:28 PM, SkepikI wrote:

    ^ well, you obviously construct your sentences not well ;-)

  • Report this Comment On December 14, 2013, at 8:05 PM, Landon01 wrote:

    I closed checking account with bofa. All checks cleared but I did not catch one automatic deduction. It was $40 and with fines they demand $130.00. Should I give them $40.00 and let them go after me about the fines ?

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