There were 2.34% fewer banks at the end of 2005, but there's still a branch on every corner

By Art Gillis

The trend has been consistent for at least the past five years. On average, there have been 2.7% fewer banks each year. The decline would have been larger if it wasn't for the de novos that entered in high growth states such as Texas and Florida (I haven't been to Iowa since 9/27/1993). During the past five years, an average of 140 de novos per year were established. About fifteen years ago, prominent industry pundits were predicting there would be 2,000 banks in the U.S. So much for prominent predictions. As of 12/31/05, there were 17,823 banks, s&ls and credit unions in the U.S. Tech vendors should be happy about that many financial institutions, but what's missing, in my opinion, are two things. U.S. tech vendors don't sell enough business to 1) large banks and 2) high-growth areas off North America. Small U.S. banks may have just reached a point where in-place technology is good enough to get the job done, and they'll take a breather from tech spending. That's not good news for any tech vendor. (Highline Data, Austin, TX, and Callahan & Associates, Washington, feed me the bank stats.)