Total deposits at FDIC-insured institutions increased nearly 11 percent during the year ending June 30, 2021, not as high of a spike as the previous 12 months but still more than doubling typical pre-pandemic increases.
Deposits increased from $15.5 trillion to $17.2 trillion, according to the Summary of Deposits Survey. Deposits at community banks grew 13.5 percent, a slight dip from the 16.6 percent rate seen during the previous 12 months. The pandemic-era deposit growth was fueled by federal stimulus programs and low interest rates. That, along with reduced spending from pandemic-related business closures, led to a high household savings rate — $2.5 trillion in early 2021, according to the FDIC. This caused consumer lending volumes to decline and loan performance to improve in 2020.
As bank customers embraced mobile banking and physical stores closed en masse during the pandemic, the number of net branches declined by 3,164 last year, the highest reduction since at least 1987, according to the FDIC. The number of FDIC-insured institutions dropped from 5,066 to 4,950, and the number of branches fell from 84,972 to 81,808.
In other report findings:
- Texas had the most branch openings (121) among all states; the metropolitan area that reported the most branch openings (Houston-The Woodlands-Sugar Land); and the second-highest number of metropolitan areas that reported branch openings (15) last year.
- The number of financial institutions fell 18.3 percent from 2016-21, outpacing the nearly 11 percent decline in the number of branches.