Why are banks closing more branches?

Initially, as the number of banks declined, the number of branches continued to rise, partially driven by strong housing growth that began in the early ’90s and continued into the housing bubble of the early 2000s. In these years, bank branches were built for new subdivisions—but, in 2006, the housing boom ended and, shortly afterward, so did the associated growth in bank branches.

During this time, technology emerged that would change banking forever, from digital banking in the late ’90s to mobile banking after the arrival of the smartphone in 2007. Over the next 15 years, most banks began to offer options for digital banking, and consumer tastes shifted to accept and even prefer these banking methods.

By 2021, six out of 10 (61 percent) U.S. bank consumers were interacting weekly with digital banking channels and 41 percent of the retail bank customer base was digital-only. This adoption was greatly accelerated by the pandemic, as restrictions forced people out of branches and onto digital platforms. Even those who were previously hesitant made the move. According to one survey, “more than 90 percent of people over the age of 60 used online banking for the first time during the pandemic.”

This move from branches to digital platforms hastened the closure of bank branches as demand fell—and as banks could deliver services at a lower cost with new technology. In 2019, for example, there were 1,419 net bank branch closures. This increased to 2,126 in 2020 and to 2,927 in 2021 before the pace slowed in 2022.

Banks closing the most branches

From 2018 to 2022, the banks that closed the most branches include Wells Fargo, which closed 1,286 branches; U.S. Bancorp, which closed 963 branches; and Trust Financial Corp., which closed 795 branches (as shown in Table 1). In the first seven months of 2023, PNC Financial Services Group closed 201 branches, U.S. Bancorp closed 185 and Wells Fargo closed 160 (as shown in Table 2).

Table 1. Net bank branch closures by bank 2018-2022

Table 2. Net branch closures by bank, to July 31, 2023

How bank closures affect you

Your bank will notify you if they’re planning to close your local branch. By law, a bank must have a policy in place on branch closings and must inform the regulator and its customers of the branch closure at least 90 days before the date of the closing. It’s also required to place a conspicuous notice at the branch 30 days prior to closing.

Even if you do most of your banking digitally, you may occasionally go to the branch for certain services and transactions—so if your branch closes, you’ll likely have to travel further for in-branch services. It also means you’ll have to spend some time on administration, even if you stay with the same bank.

For instance, you may need to change your account information for direct deposits and bill payments. And, if you have a safe deposit box, you may be required to close your box at your local branch and open a new one at a new location.

What to do if your bank branch closes

When you learn that your bank branch is closing, determine what resources are available to assist you at your current branch and who can answer your questions. Then, find out whether a new bank will be moving into the location, if the ATM will also be closing, and where the nearest alternative branch is.