PNC Is Closing 203 Banks in 2023. Should You Be Concerned?

PNC is the sixth-largest bank in the U.S. by total assets ($552 billion) and home to around 14 million customers. So when a bank this big announces it's closing branches, it's surely going to turn some heads.

In an April 21 bulletin from the Office of the Comptroller of Currency (OCC), PNC announced it would close 30 branches across seven states: Alabama, Florida, Illinois, Maryland, Ohio, Texas, and Virgina. This brings the total closures for 2023 up to around 203, according to estimates from Pittsburgh Business Times.

These closures are not immediate. Banks have to announce a branch's closing date 90 days in advance. Thus, those announced on April 21 will close on July 21, while other PNC closures announced early in March will close in June.

With the failures of Silicon Valley Bank, Signature Bank, and Silvergate Bank fresh on our minds, it's easy to look at this and say -- uh-oh. Toss in reignited banking fears from the Fed's expected interest rate hike and you can see why some PNC customers might be concerned.

Should PNC customers be concerned?

Before we press the panic button, let's take a step back. When we look at the big picture, I don't think PNC customers have anything to worry about.

For one, these closures are not signs of financial stress but rather part of an ongoing campaign to adjust to new banking trends. PNC has long noted that its customers prefer mobile and digital banking to in-person banks. Since at least 2012, PNC has closed thousands of branches that are not receiving enough foot traffic to justify keeping them open. Again, the bank itself is not losing clients; its clients simply prefer banking online with PNC.

To drive the point home, consider how much PNC has grown since it started closing branches in 2012. In that year, PNC reported a net income of $3 billion and had total deposits of $213 billion. In comparison, PNC reported net income of $6.1 billion for 2022 and total deposits of $436 billion. A bank that doubles its income and deposits over a 10-year period, while also closing thousands of branches is not struggling in the way of Bed Bath & Beyond (R.I.P): it's adjusting to trends and thriving because of it.

But if that's not enough, just consider its latest Q1 2023 earnings, which reported income and deposits post-banking crisis 2023. Its net income was $1.7 billion, or a 9% increase quarter to quarter. More impressive was the $1.3 billion increase in deposits. This is stunning, considering that more and more Americans have lost faith in the banking system. Despite the trend, PNC is seeing depositors entrust the bank with more of their money.

PNC looks stable and prepared for any financial stress

But let's say a bank run did happen. How would PNC fare? To answer that, we can look at the bank's Tier 1 common capital ratio. This ratio measures how well a bank can withstand financial stress. A higher ratio signals that the bank has enough capital to absorb losses without damaging repercussions. The industry requirement is 7%. PNC's ratio is much higher than that -- roughly 9.2% at the end of March.

So, should you be concerned about PNC bank closures? I don't think so. While it's good to be informed about what your bank is doing, PNC doesn't seem to be in a precarious position. If your PNC branch does close it, however, you can look at some top national banks to find in-person banking near you.