US bank deposits return to growth, annual FDIC survey shows

US banks' total deposits increased slightly through the 12 months ended June 30 after the industry recorded a rare drop in the prior year, according to Summary of Deposits data that the Federal Deposit Insurance Corp. released Sept. 20.

The data, which is composed of results from an annual survey of FDIC-insured branch offices, showed that the US banking industry's deposits ticked up 0.8% to $17.406 trillion as of June 30 from $17.270 trillion a year earlier, when deposits fell for the first time on record and three large banks failed. Eight of the 15 largest US banks by deposits recorded higher balances year over year.

The majority of the bankers recently surveyed by S&P Global Market Intelligence reported increased competition for deposits in their market areas as interest rates remained elevated. However, the Federal Reserve has now embarked on a rate-cutting cycle, and bankers expect the intensity of competition to subside or remain at current levels over the second half of the year.

JPMorgan Chase & Co. emerged as the largest deposit holder in the US for the fourth consecutive year. The company held onto its spot even as its total deposits declined 2.9% year over year to $2.009 trillion and its market share fell 43 basis points to 11.54% as of June 30.

JPMorgan continues to see net headwinds to deposit balances, CFO Jeremy Barnum said during the company's second-quarter earnings call on July 12.

"When we think of our balance outlook, we see it as flat to slightly down, maybe with our sort of market share and growth ambitions offsetting those systemwide headwinds," Barnum said.

Bank of America Corp. posted the second-largest deposit balance at $1.913 trillion, up 1.4% year over year. The company expects deposits to "do better over time," especially as interest rates come down, CFO Alastair Borthwick said.

"I'd be careful about getting too excited about deposit growth, but we feel like we're doing OK so far, and we've just got to keep driving that," Borthwick said during BofA's second-quarter earnings call on July 16.

Wells Fargo & Co. ranked No. 3 with $1.416 trillion in total deposits as of June 30, up year over year from $1.376 trillion, followed by Citigroup Inc. with $743.36 billion, down year over year from $757.14 billion.

Among the banks in the top 15, Wells Fargo and Bank of New York Mellon Corp. logged the biggest year-over-year increases in deposits, at 2.9% each.

Charles Schwab Corp.'s total deposits dropped by 17.0% year over year to $252.85 billion, the largest year-over-year decline among the institutions on the list. The company is planning to shrink its bank unit and will unload some deposits to third-party banks, among other actions.

US banks continued to shutter branches as they adapted to digitalization while reducing costs. As of June 30, the total nationwide branch count was 76,742 branches, versus 77,770 in the prior year and 86,392 in pre-pandemic 2019.

Among the US states and territories, Palau logged the largest year-over-year increase in deposits at 31.3%, followed by North Carolina at 14.4%.