The Federal Deposit Insurance Corp. recently released its annual summary of deposits, providing a snapshot of the number of deposits that each bank holds in its U.S. branch office footprint. While it's a broad view, this data can be a good indicator of which banks are executing well on their domestic strategies. The new data reflects deposit counts at the end of the second quarter on June 30. I'll focus on the largest banks with significant consumer bank presences and lots of branches. Let's take a look.
Strong performers
Of the group of banks in the table below, which includes most of the largest retail banks in the U.S., JPMorgan Chase performed the best, increasing deposits about 30% between June 30, 2019 and the same time this year. The data below only includes deposits in the subsidiary bank and not the holding company, so JPMorgan's total deposits are larger, but again, this represents deposits at the bank's U.S. branches. Other strong performers include Bank of America, TD Bank, and PNC Bank.
| Bank | Deposit Market Share in U.S. (Billions) | Change From 2019 | Branch Office Change From 2019 |
|---|---|---|---|
| JPMorgan Chase (JPM 0.79%) | $1,700 | 30% | (60) |
| Bank of America (BAC 2.71%) | $1,730 | 27.7% | (83) |
| Wells Fargo (WFC 1.81%) | $1,460 | 13.6% | (156) |
| Citigroup (C 1.51%) | $664 | 20.6% | (1) |
| U.S. Bancorp (USB 0.98%) | $398 | 16.3% | (206) |
| PNC Bank (PNC 1.97%) | $338 | 25.5% | (74) |
| TD Bank (TD 1.08%) | $332 | 28.3% | (18) |
| Capital One (COF 1.97%) | $304 | 22% | (36) |
Source: FDIC Summary of Deposits.
JPMorgan saw deposits grow the most from a percentage standpoint in states such as Maryland, Massachusetts, Pennsylvania, Virginia, and Washington D.C. This isn't particularly surprising, because the bank has been expanding its retail branch presence in many of these states over the past two years. But JPMorgan saw strong growth in a lot of its strongest markets, too. The bank grew deposits by more than $165 billion year over year in New York; by more than $44 billion in California; and by close to $19 billion in Michigan. Even with the ongoing expansion, JPMorgan still managed to reduce its branch count by 60 in this time period.
Image source: JPMorgan Chase.
Bank of America's performance over the last year was also impressive, cutting 83 branches and still managing to grow deposits by more than 27%. States the bank excelled in over the last year include California, Texas, Florida, Massachusetts, New York, and North Carolina. Meanwhile, TD Bank saw strong growth in Delaware, New York, and New Jersey, while PNC saw strong growth in New Jersey, Ohio, and Pennsylvania.
The takeaway
Overall, the data is a good sign for JPMorgan and Bank of America, which are believed to be some of the stronger big bank stocks. I also think PNC's ability to produce strong deposit growth while cutting 74 branches is also a very good sign for the bank, especially when you consider that PNC is a good deal smaller than Bank of America and JPMorgan. The ability to close branches and retain deposits shows the bank is on top of its digital strategy. Servicing digital accounts and transactions online is a lot cheaper than doing them in the branch, but banks need to ensure they don't lose customers and depositors during the transition.
Wells Fargo's lackluster performance is no surprise considering the issues the bank has had with regulators and then the coronavirus. It's a little concerning to see U.S. Bancorp didn't do as well as some of its competitors. The company is considered to be a stronger bank stock relative to the rest of the industry, currently trading above book value. But the slower growth in deposits could also be a result of cutting more than 200 branches over the last year, far more than any of the other banks in the table.
