BIRMINGHAM, AL (March 13, 2025) |
Bancography, a financial services consulting firm, today released its annual research report, Outlook 2025: Industry Trends and the Challenges Ahead. It examines statistics on deposit growth, branching activity, and household demographic and economic measures across the U.S.
The report indicates financial institutions will experience a challenging economic environment due to flat deposit growth. “Financial institutions are facing a zero-sum environment, where one bank’s gain is another’s loss,” said Steve Reider, president of Bancography.
The large- and mid-sized markets posting the greatest deposit gains spanned all regions of the nation, with markets as diverse as Ogden, Madison, Knoxville, Poughkeepsie and Omaha. Additionally, the research finds that branch closures have abated in recent years, even as opens have remained steady at about 1,000 to 1,100 new branches per year. As a result, the industry saw a net decline of only 1,100 branches last year, the smallest decline in 10 years.
Reider continued, “While the total branch count is down 17% from its peak in 2010, our data continues to demonstrate that branches are here to stay. Even for an intangible product, physical presence matters. Institutions will need to be judicious in determining branch design, focusing on the ability to build smaller, more cost-effective models with lesser staff requirements in order to maximize deposit gathering while still maintaining a community presence.”
Key Highlights from the Annual Outlook Report include:
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Midwest and Sunbelt metros fared best in longer-term deposit growth. Indianapolis, Columbus, San Antonio and Tampa ranked among the top deposit-growth leaders in 2024.
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San Francisco, San Jose and New York, three higher cost of living areas and tech centers, all suffered deposit declines over the 2020 - 2024 period.
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Homeowners hold a record-breaking 72 percent in home equity. The steady revival in homeowners’ equity should continue to increase demand for home equity lines and loans.
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Credit unions and community bank deposits grew at a rate of 2% in 2024, offset by a 1.5% decline in deposit levels at the largest national banks; with regional banks in the middle with 1.2% deposit growth.
Bancography’s Outlook 2025 is available for download here.
For a comprehensive analysis and strategic advice for the year ahead, Bancography is hosting a free webinar on Thursday, March 20 at 2:00 PM EST. Any interested attendee can register here.
To register for a free Bancography’s Outlook 2025 special briefing webinar click here.