JPMorgan Chase & Co. overtook Bank of America Corp. as the largest U.S. bank by total deposits for the first time in four years, according to the latest Summary of Deposits data from the Federal Deposit Insurance Corp.
As of June 30, JPMorgan's deposits totaled $2.011 trillion, a year-on-year increase of 17.9% that boosted its market share by 73 basis points. On the other hand, Bank of America lost 22 basis points of market share even though its deposits jumped 8.4% to $1.894 trillion.
JPMorgan might not be celebrating. The banking system has been inundated by excess deposits as government relief efforts have left both businesses and consumers flush with cash. Across the country, total deposits rose 10.6% to $17.236 trillion. While the rush of deposits has allowed banks to lower their funding costs, it has also depressed margins. In recent quarters, several bankers have said they are looking to deflect excess deposits, targeting commercial clients with cash balances higher than what they typically use for operations.
Deposit growth, particularly at the nation's largest banks, has been further supported by the Federal Reserve's efforts to flood the markets with liquidity through quantitative easing, which in turn has increased the level of reserves in the banking system.
PNC Financial Services Group Inc., which closed its acquisition of BBVA USA Bancshares Inc. on June 1, posted a 33.3% jump in total deposits and moved up four spots on the list to No. 5, as of June 30.
Morgan Stanley reported the largest growth in deposits among the top 15 bank holding companies at 40.5%, giving it $339.53 billion in deposits as of June 30. State Street Corp. also moved up, entering the top 15 list with $176.46 billion in total deposits.
At the state level, Georgia recorded the highest deposit growth at 29.5%. At the other end of the spectrum, Minnesota and South Dakota saw their deposits decline by 10.1% and 15.1%, respectively.
Meanwhile, banks continued trimming their branch footprints, lowering the total branch count to 81,819, a 3.7% decline from the previous year and down from 98,193 in 2011.
