U.S. banks cut their branches by 1.7 percent over the past year amid shifting customer choices. Arizona's branch total has been stable, reflecting population gains and the lack of major mergers here.
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Banks closed more than 1,600 branches across the nation over the past year, as companies directed more attention to dealing with customers through digital channels.

The 1.7-percent reduction in the number of branches between mid-2013 and mid-2014 was reported by researcher SNL Financial and based on reports filed with the Federal Deposit Insurance Corp. SNL said the consolidation was fueled by banks' desire to cut costs and divert more resources to digital services. In some states, mergers and acquisitions resulted in the shuttering of some duplicative branches.

It was the largest annual branch reduction since the FDIC began reporting electronic records in 1994, according to SNL Financial's report. It brings the nation's branch count back down to 1996 levels. But it didn't dim the ability of banks to attract deposits. Overall deposits hit $10.1 trillion at midyear, up from $7.6 trillion when the number of branches peaked in 2009.

Among the big three banks operating in Arizona, Chase cut 15 branches nationally while Wells Fargo added 17, according to SNL Financial. Both moves represented changes of less than 0.5 percent in the branch totals of those two institutions. But Bank of America shaved 305 offices or 5.6 percent of its nationwide total.

Figures weren't provided for individual states. But Arizona's branch network is viewed as relatively stable, thanks in part to the state's gradual growth in population. Also, Arizona hasn't had any major banking mergers in recent years.

Branches aren't the main way for customers to do business with their banks, though a recent survey found that they continue to be viable. An American Bankers Association survey released in August found that 31 percent of consumers mainly bank via the internet using personal computers or laptops. That was the most popular channel, followed by branches at 21 percent, ATMs at 14 percent and cellphones and other mobile devices at 10 percent, with the remaining responses split among telephone, mail and no preferences.

"It's clear that branches are still popular with many bank customers," said Nessa Feddis, a deputy chief counsel at the American Bankers Association, in a statement.

In fact, the latest ABA survey found a slight increase in branches as the most popular banking channel, rising from 18 percent in the 2013 poll. Mobile and ATM use also gained, while internet banking through laptops and PCs fell from 39 percent. Many customers clearly use multiple channels, but the ABA poll asked them to name the one they use most often.

"When people are conducting a complex transaction like opening an account or applying for a home or business loan, they often prefer to do it in person," said Feddis. "We're seeing a branch renaissance in some areas, with many banks transforming their branches to become more efficient and customer-friendly."

Some firms also are using branches as places where customers can go to receive help in conducting business over the internet or through electronic devices.

Fewer branches

The nation's banks reduced the number of their retail outlets by more than 1,600 over the past year. The branch count peaked in 2009 and has been declining since then. The following figures are midyear numbers.
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Source: The Republic