'What Are We Going To Do?': Towns Reel As Banks Close Branches At Record Pace

George Holland, the mayor of Moorhead, Miss., remembers the feeling when he heard that Regions Bank was closing its branch in his small, rural town a few years ago.

"That was actually the only bank in our community and the next-closest bank was probably 8, 9 miles to Indianola," Holland said. "I was thinking, 'What are we going to do?' "

Banks have been permanently shuttering branches for years, but the number of closures hit a record in 2020 as the pandemic accelerated the move by many customers to online banking.

Banks closed 3,324 branches last year, according to a tally by S&P Global Market Intelligence.

It makes financial sense for banks given the cost of operating branches.

"The reality is, the vast majority of the activity that happens in a branch is not revenue generating," said Steven Reider, who as president of the consulting firm Bancography advises banks on branch locations. "In fact, it's cost-carrying activity."