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Pa. leads nation in bank branch losses
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Pennsylvania lost more bank branches than any other state over the last year as financial institutions continued to look for ways to cut costs.
In the 12 months ended June 30, 119 branches were closed and 36 were opened statewide for a net loss of 83, according to an analysis by SNL Financial. Georgia was next with a net loss of 51.
Statewide, the Philadelphia region had a net loss of 30 branches, the most of any metropolitan area in the country. The Pittsburgh region lost 13 branches (23 closed and 10 opened), the 10th highest nationwide. The report did not identify exactly where the shuttered branches were located.
Across the country, there was a net loss of 767 branches, according to SNL, a financial information firm headquartered in Virginia.
The No. 1 branch consolidator was Bank of America, which opened six branches and closed 163 for a net loss of 157. Bank of America has operations in Philadelphia but not in Pittsburgh.
A spokesman for Pittsburgh market leader PNC Bank said the bank closed seven branches in the region during the June-to-June time frame, including branches in McMurray and Duquesne and a mini branch at Duquesne University.
Bank revenue is being squeezed by record low interest rates and a federal cap on fees that financial institutions collect from merchants when people swipe their debit cards.
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"Banks are under a lot of pressure to cut costs," said Bert Ely, a banking consultant based in Alexandria, Va. "One way to do that is to consolidate branches."
Some banks have been stepping up efforts to deliver banking services more cheaply through alternate channels, such as mobile devices and smarter ATMs.
In the Pittsburgh region, PNC, for example, has been installing more ATMs with advanced functions that include cashing checks and stamping check images on customer receipts to ease the qualms some people have about depositing checks into a machine.
And Pittsburgh-based Dollar Bank has been experimenting with interactive video ATMs that let customers see and speak with live tellers.
Bank customers nationwide can expect the trend toward branch closings to continue, Mr. Ely said.
"We have a sluggish economic recovery, and low interest rates will continue for at least another couple of years. I think the pressures will continue to be there," he said.
Branch counts in some states, such as Georgia, have taken a hit because of a wave of bank failures.
On the other hand, branches aren't going to disappear entirely any time soon, Mr. Ely said. Many customers are not ready to abandon them, and banks have found they need branches to help cross-sell products.
After Pennsylvania and Georgia, the states with the most branches lost were Virginia with a net loss of 46, Texas with 38 and South Carolina with 34.
Only four states saw more branches opened than closed, led by California with a net gain of 22. The Golden State was followed by Rhode Island, which added three; New Mexico with two; and Delaware with one.
To see the SNL report, visit http://www.snl.com/InteractiveX/Article.aspx?cdid=A-15329941-11823.
First Published August 15, 2012 12:00 am
