The number of full-time equivalent (FTE) U.S. bank employees dropped 2.2% during calendar 2023 for a loss of over 45,500 jobs.

Over 75% of those job losses came from just nine banks with 4-Star Wells Fargo Bank, Sioux Falls, SD losing over 10,000 jobs all by itself.

Even with these aggressive job cuts, most big banks did not eliminate 15% of their staff. The 51 banks listed on on page 5 of this week's Jumbo Rate News did. Each started off 2023 with 75 or more employees and ended it with at least 15% fewer.

U.S. Banks Lost Over 45,500 Jobs in 2023

The number of full-time equivalent (FTE) U.S. bank employees dropped 2.2% during calendar 2023. Not only was that a loss of over 45,500 jobs, it was the first year that jobs were lost in the industry since 2019.

Looking at the numbers gives us the impression that the job losses in 2023 were a correction of over-exuberant hiring in 2022 (see chart). The industry increased FTE by 2.7% in 2022, representing a gain of over 55,000 jobs. Between that gain and the 2023 loss, the industry net gain was 0.5% for the two years. That aligns much more closely with what we would expect.

Over 75% of the 2023 job losses came from just nine banks. 4-Star Wells Fargo Bank, Sioux Falls, SD lost over 10,000 by itself. That  was nearly twice as much as the #2, which was 4-Star CitiBank, Sioux Falls, SD. CitiBank added 13,000 jobs in 2022, then lost 5,000 in 2023. CitiBank also recently announced it plans to cut another 20,000 in the next 2½ years.

Wells Fargo had already started paring back in 2022, when it lost 8,431 jobs, then over 10,000 more in 2023. In fact, 2023 was the first year in recent memory that Wells Fargo closed the year out with fewer than 200,000 employees.

5-Star Capital One, McLean, VA and 4-Star PNC Bank, Wilmington, DE, were at the top of the list of losers as well. They came in at #3 and #4, respectively, with over 4,000 jobs lost at each.

5-Star Santander Bank, Wilmington DE, which was in last week’s issue (JRN 41:19) of U.S. banks owned by foreign companies, cut its staff by over 3,000 (37%) in the past two years; 29% in 2023 alone.

Santander Bank is listed on page 5 along with 50 other U.S. banks that started off 2023 with 75 or more employees and ended it with at least 15% fewer. You won’t find these other Big Banks, though. Even with aggressive job cuts, big banks did not eliminate 15% of their staff.

You will find 3-Star Colonial Savings, F.A., Fort Worth, TX, which started off 2023 with 461 employees but lost over half during the year (57% to be exact). For Colonial, this appears to be part of a major cost cutting campaign intended to bring the bank back to profitability. After six straight quarters of losses, Colonial Savings reported a fourth quarter profit of $1.5 million. It is still a work in progress; in spite of that fourth quarter gain, it still lost $15.4 million during the year.

3-Star American State Bank, Arp, TX was established in 1911 as Arp State Bank and for its first 108 years, aside from a name change in 2008, it was pretty much status quo at this small, community bank. That all changed in 2019 with the acquisition of the $121 million asset Texas State Bank, Joaquin, TX.

That was the only bank acquisition made by American State Bank, but the expansion bug hit hard. During the following three years, the bank grew by nearly 165% (from $445 million in assets at the end of 2019 to $1.173 billion in assets at the end of 2022). It proved to be too much too fast. A correction was in order.

That’s exactly what happened in 2023. American State Bank shed 48% of its workforce, going from 250 employees at year-end 2022 to just 131 at the end of 2023.

In addition to losing employees, American State Bank lost almost 19% of its assets and over 25% of its loans. Over half of its loan portfolio is CRE and while it is still struggling with the quality of those loans, it did manage to make it off of Bauer’s Troubled and Problematic Bank Report (banks rated 2-Stars or below) with year-end 2023 data.

5-Star North American Savings Bank FSB, Grandview, MO eliminated 185 employees (43% of its workforce) yet grew its assets during 2023 by 9%. This new leaner, more efficient North American Savings Bank went from $5.56 million in assets per employee to over $11 million and its efficiency ratio dropped from 73% to under 60%. Impressive.

Another 5-Star bank, Cadence Bank, Tupelo, MS, was the result of the 2021 combination of Cadence Bancorp and BancorpSouth Bank. BancorpSouth had acquired a number of banks over the years, but this was different. This time BancorpSouth took on the name of the acquired bank and became Cadence Bank

In 2023, this new Cadence Bank reorganized to reduce expenses and eliminate overlap. As a result, its workforce was reduced by 19%,  approximately 1,200 jobs. This is a major structural overhaul that continued into 2024 as well.