Local branches produce most bank deposits growth, according to study.

• Position: Brief article

Despite the growth of online banking, most banks achieve deposit growth primarily by adding more branches, according to a new analysis from Market Rates Insight (MRI), a bank rate research firm in San Anselmo, Calif.

The study reveals that there is still a strong link between the number of bank branches in each city and the deposit balances banks generate in that city. Moreover, the correlation is so strong that the report shows that the national average for adding one local branch will increase deposits by $116 million.

The report shows that, despite the growth in remote-banking alternatives, nearly 90 percent of all bank deposits are made by people living in the region. The analysis examined the linear relationship (regression) between the numbers of branches in 371 different cities with the corresponding deposit balances in those same cities.

The findings also show that it is highly probable that changing the number of bank branches in any city will have an...