Seven of the ten largest banks in the United States have seen deposits decline, while six experienced profit shrinkage, according to new earnings reports.
JPMorgan Chase, the largest holder of deposits, reported in October that deposits fell by 1.2 percent as of September 30 to $2.38 trillion from a year earlier. Net income in the first nine months of 2023 at the New York-based institution rose to $40.3 billion from $26.7 billion.
Second biggest Bank of America saw deposits in third quarter of 2023 fall at a higher 6.2 percent rate to $1.88 trillion, according to the Charlotte, N.C.-based giant's October earnings report. Net income for the nine months was $23.4 billion, up from $20.4 billion.
Five U.S. banks have failed in 2023, the most since eight were shuttered in 2017. In June, deposits nationwide declined for the first time on record as people made runs on local banks, the Federal Deposit Insurance Corp. reported. While stocks have seen some flight as well, some turned to credit unions and cryptocurrency.
Causing concern
The situation has caused concern in bank board rooms and on Capitol Hill.
On November 14, U.S. Sen. Sherrod Brown, an Ohio Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, implored federal regulators to be more vigilant in making sure banks protect customers' deposits. He also called on banks to invest more in local small businesses.
"Earlier this year, we witnessed three of the largest bank failures in U.S. history," Brown said. "The bank failures exposed weaknesses in the supervision of the banking system, disrupted the financial system’s stability, and reminded many Americans that they just don’t trust Wall Street."
But a federal plan to make banks with more than $100 billion in assets hold more capital was met by resistance from many lawmakers and the American Bankers Association.
"These changes will require banks operating in the U.S. to meet even higher capital levels without any justification," ABA President Rob Nichols said in a statement. “As regulators themselves have concluded and recent stress tests have demonstrated, the U.S. banking system is already well capitalized.... This unnecessary and overly broad proposal puts economic growth and resiliency at risk by restricting credit availability for businesses and other borrowers."
More than 99 percent of accounts in banks are insured by the FDIC, which insures the deposits up to $250,000 per account. During the bank failures, the federal agency even covered accounts that had more than $250,000. Some have reported delays in receiving funds, as well as problems at healthy banks like automatic deposits from employers not reaching their bank accounts.
Banks have continued to close branches, relying more on online accounts and services. The number of U.S. bank branches declined by 19 percent in the past decade to 77,796.
The following shows deposits at the largest banks and a few smaller ones, as of September 30 compared to a year earlier. Net income is for the entire year so far in 2023.
Dollar amounts are in billions of dollars unless noted.
Institution ... Deposits 2023* .... Deposits 2022* ... Net income 2023** ... 2022** JPMorgan Chase ... $2,379.5 ... $2,408.6 ... $40.25 ... $26.67 Bank of America ... $1,881.66 ... $2,006.58 ... $23.37 ... $20.40 Wells Fargo ... $1,340.3 ... $1,407.9 ... $15.70 ... $10.52 Citigroup ... $1,273.5 ... $1,306.5 ... $11.07 ... $12.33 TD Group ... $846.1 ... $880.9 ... $5.76 ... $7.85 PNC ... $423.61 ... $438.19 ... $4.76 ... $4.57 Goldman Sachs ... $403 ... $395 ... $6.51 ... $9.94 Truist ... $401.04 ... $420.10 ... $4.04 ... $4.59 Capital One ... $346.01 ... $317.19 ... $4.18 ... $6.13 Morgan Stanley ... $345.46 ... $338.12 ... $7.57 ... $8.79 US Bancorp ... $272.71 ... $255.55 ... $2.78 ... $2.34 M&T ... $162.69 ... $167.27 ... $2.26 ... $1.23 Navy Federal CU ... $145.46 ... $133.4*** ... $1.23 ... $1.90*** State Employees CU ... $44.9 ... $48.5 ... $586.9M ... $563.6M Sandy Spring ... $11.15 ... $10.75 ... $96.7M ... $132.3M Eagle ... $8.38 ... $8.76 ... $80.3M ... $98.7M *in billions of dollars as of Sept. 30 ** in billions of dollars so far that year unless noted *** as of Dec. 31, 2022 Sources: Bank earnings reports
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