Over 2,100 bank branches closed their doors during the 12 month period ending June 30, 2023.

Yet, 977 new bank branches opened for business during that same 12 month period. Many of the new branches belong to 5-Star community banks. All community banks with at least two new branches and all non-community banks with at least three new branches can be found on page 5 of this week's Jumbo Rate News.

Other resources: Bauer's Highlights Report provides the number of branches the institution currently operates through as well as five quarters of financial highlights side-by-side for easy comparison.

The Fewer the Bank Branches, the More They Matter

According to the FDIC, 977 bank branches opened for business during the 12 months ending June 30, 2023. That sounds impressive until you realize that over 2,100 other branches closed their doors. With 142 banks lost to mergers, acquisitions or simply liquidated and only 12 new banks opening, this should not be a surprise.

While big banks make headlines with news of branch closings, there are still many parts of the country, particularly rural areas, that lack access to any bank, or credit union, for that matter. This problem is compounded by the fact that many of these rural areas also lack access to the internet. In these cases, it’s not the big banks that come to their rescue, but, local community banks.

5-Star BayFirst National Bank, St. Peterburg, FL is one such community bank. Established in 1999 as First Home Bank, in May 2022, the name was changed to BayFirst National Bank and the expansion began. While many believed the bank branch would never make a comeback after COVID, BayFirst seemed determined to prove them all wrong.

BayFirst entered Hillsborough County in March 2020 with its first Tampa branch (just before the lockdown). It opened another in its home county of Pinellas in November 2021. In the past year, it opened three more in Hillsborough (1) and Manatee (2) counties .

You will find BayFirst National Bank listed on page 5 along with all other community banks that opened two or more branches during the 12 months ended June 30, 2023 and all non-community banks (i.e. Big Banks) that, according to the FDIC, opened at least three new offices in that time-frame.

We add that caveat because the FDIC no longer differentiates between acquired branches and new branches. We know very well that at least some of the supposedly “new” branches for JPMorgan Chase Bank came from First Republic Bank, which it acquired on May 1st.

Organic growth happens at a much slower pace, but four community banks did open three new brick and mortar branches each in the 12 months ending June 30th. One was BayFirst. The other three were:

5-Star Dakotah Bank, Aberdeen, SD, which has had an acquisitive history, but the three branches opened in this 12 month period were all organic. The first was opened in Fargo, ND last August. The second opened in December in Bismarck, ND. The third marked its first expansion in Minnesota since it acquired the Morris, MN branch from United Farmers and Merchants State Bank in 2013. The new Minneapolis branch opened for business on May 22nd. Dakotah Bank now operates through 35 offices in three states (MN, ND, SD).

5-Star Heritage Bank, Olympia, WA, opened three new branches in three different states. Heritage Bank’s Eugene, OR branch opened on August 5, 2022. Marking its first entry into Idaho, its Boise office opened on January 10, 2023. Finally, its second full-service branch in Everett, WA opened on 2/13/2023. (Heritage also has a loan production office in Everett.) In all, Heritage Bank has 55 branch offices, six in OR, the new one in ID and the rest in WA.

The last bank, 5-Star State Bank Northwest, Spokane Valley, WA doubled its footprint with three new branch offices. It now operates three in Spokane County and three in Whitman County. State Bank Northwest has definitely made it a point to open branches in rural locations that need better access to the banking system.

Community Banks like these are all about building relationships. They understand the importance of face-to-face banking, even as we evolve to handle more and more digitally. There are times, when only a personal visit to a branch will suffice.

It comes down to this: If you only go to a bank branch when it’s very important, then it is very important to have a bank branch nearby to get to.