US banks' net branch closings reached their highest quarterly level since the first quarter of 2022, driven by more than 350 closings in July.

In the quarter ended Sept. 30, the US banking industry recorded 439 net branch closings, versus 199 in the prior quarter and 960 in the 2022 first quarter, according to S&P Global Market Intelligence data. Several banks cited plans to become more efficient when discussing their branch strategy, whether they were addressing openings, closings or their existing network.

Most active banks

Bank of America Corp. led the industry in the third quarter with 41 net closings. Many branches the bank closed were in California.

In September, Bank of America announced a plan to open over 165 new financial centers across 63 markets by the end of 2026, including nearly 40 in 2024.

"We're trying to get coverage in the top markets across the country so that we cover the American population in an efficient and effective way," Chairman, CEO and President Brian Moynihan said during an Oct. 15 earnings call, adding that people continue to like walking into a bank branch to start a relationship.

Wells Fargo & Co. was the second-most active net closer with 40 net branch closings, followed by Toronto-Dominion Bank with 39.

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Bank of Montreal was among the most active net closers, reporting 23 net closings in the third quarter. The bank is seeing increased branch activity in the legacy system of Bank of the West, which BMO acquired in 2023.

"We operate the branches a bit differently because we also brought significant digital capabilities that they didn't have prior to the acquisition," BMO CFO Tayfun Tuzun said during a Sept. 10 conference presentation. "And the combination of better digital tools and different sales management approach is showing very strong signs of an uplift in branch productivity."

U.S. Bancorp booked 23 net branch closings in the third quarter. While the company has deep client relationships connected with its branches and is "very steady in investing" in branches, it has built digital capabilities that have helped its operations, President Gunjan Kedia said.

"Our strategy focus is to create density in the highest growth areas within our current footprint rather than use branches to expand out of our footprint," Kedia said during an Oct. 16 earnings call. "And the reason for that is that we have built some very good, strong digital capabilities that allow us to deliver our services nationally and we are combining that with our very strong partnerships with other partners that have brand recognition and client reach in areas where we don't have."

Banc of California Inc. was part of the list, with 10 net branch closings. The company has reached "an inflection point" after its balance sheet repositioning, core systems conversion and consolidation of 12 branches in the third quarter, Vice Chairman, President and CEO Jared Wolff said during an Oct. 22 earnings call. "We are shifting our focus from transforming our internal infrastructure to external growth," Wolff said.

JPMorgan Chase & Co. ended the third quarter as the most active in terms of net branch openings. The company booked 18 net openings in the third quarter, versus 27 net closings in the prior period. Western Alliance Bancorp. was also active on the branch opening front in the third quarter with seven net openings.

Activity by state

In the third quarter, California logged the most net branch closings with 62 closings and 13 openings, followed by New York with 47 closings and six openings. New Jersey booked the third-largest number of net closings at 43, and six openings occurred in the state.

Michigan recorded the most net branch openings with six, followed by Rhode Island with five. Texas logged the most number of branches opened with 42 and the most number of branches shuttered with 68.