Houston as Online Banking Spreads: More Than 75 Banks Closed

In Houston, With the popularity of online banking surging, banks have closed 44 branch banks in the Houston are since 2013 and more closures are coming soon. These totals reflects the net loss in the number of branch banks, with many banks closing, even as new banks were built.

Over a decade ago, banks began building hundreds of branches in the suburbs and choice locations in the Inner Loop of Houston. Building new branch banks was a way to grow market share and the competition was fierce.

But the tide has turned. Today, consumers use their smart phones for banking. Banks are closing branches. JLL reports there could be a 20 percent reduction in the number of branch locations over the next five years.

“The branch strategy of relying on sheer numbers to win market share is a thing of the past, and now banks need to focus on a customer-centric real estate approach,” said Geno Coradini, Executive Vice President and Lead of JLL’s Retail group.

Many banks will also reduce the size of their remaining branches, shaving off as much as 2,000 SF per branch, JLL said in its 2017 Banking Outlook.

The FDIC reports an 8 percent decline in the number of branches since 2009.

The number of branch banks in Houston declined 5 percent from 1,558 branches in 2010 to 1,482 in 2016, a decline of 76 branch banks, reported JLL.

“Banks are going to continue a trend of shedding retail branches,” said Jason Gaines, senior vice president of the retail division of NAI Partners in Houston. “It will have a trickle effect. It won’t be an immediate or sudden purge, but should be a consistent trend for the coming years.”