Banks saw their largest percentage increase of deposits in 77 years during 2020, according to a new report published by the federal insurer of bank deposits published Monday.
The Federal Deposit Insurance Corp. (FDIC) said its “2020 Summary of Deposits Highlights” reported that deposit growth from June 30, 2019 to June 30, 2020 was largely driven by stimulus payments and other actions taken by the federal government to counter the financial impact of the coronavirus crisis, which became apparent about one year ago.
The report, contained in the FDIC Quarterly, published by the agency, also noted that:
- Noncommunity banks and bank offices located in metropolitan counties reported the highest rates of deposit growth in the year ending June 30, 2020.
- The number of offices of FDIC-insured institutions declined for the 11th straight year, although the rate of decline in the number of offices was lower in 2020 than in the three previous years.
- The lower rate decline in the number of offices was influenced by the number of new offices opened in 2020 was the highest since 2014, and that the number of offices closed was the lowest since 2015.
- The percentage of offices acquired in mergers that were closed by the acquiring institution was lower in 2020 than in any of the previous ten years.
- The rate of decline in the number of offices was higher in metropolitan counties than in micropolitan and rural counties.
In another area, the FDIC Quarterly reported that forecasted net farm income rose to its highest level since 2013 – $121.1 billion, a $38 billion increase from 2019 – fueled primarily by “record government payments,” according to the report. “Early forecasts suggest that farm income in 2021 will not be as strong as 2020, but may still be above the long-term average,” the report stated.