NEW YORK ( TheStreet) -- Yes, the big banks are getting bigger. But there's more to it than that, especially for investors. The Federal Deposit Insurance Corp.'s annual deposit market share data for U.S. banks and bank holding companies is now available. The "big four" bank holding companies, including Bank of America ( BAC), JPMorgan Chase ( JPM), Wells Fargo ( WFC) and Citigroup ( C) have continued to see their share of the nation's bank deposits increase. This will lead to the usual knee-jerk headlines whining about "too big to fail" banks and how the big keep getting bigger despite the best efforts of regulators and politicians. Looking past the noise, there are some interesting items contained in the data that underline the success of the big four in pursuing their post-crisis strategies. The big four had a combined U.S. deposit market share of 37.29% as of June 30, according to the FDIC data. This share grew from 36.68% in June 2012 and 34.51% in June 2008. All four of the nation's largest banks saw their deposit market shares grow over the past five years, and all but one saw its share grow over the past year. But three of the big four lowered their U.S. branch count over the past five years -- two of them by very significant amounts, underlining the industry's emphasis on cost-control. That June 2008 figure includes some back-filling of data, to include the two Merrill Lynch bank subsidiaries that Bank of America acquired along with the nation's largest brokerage firm in January 2009. The back-filling also includes the two bank subsidiaries purchased by JPMorgan Chase from the FDIC in September 2008, after Washington Mutual became the nation's largest bank ever to fail. The 2008 deposit market share for Wells Fargo is combined with Wachovia's deposits. Wells Fargo acquired Wachovia at the end of 2008. Here's a quick summary of how the big four stacked up as of June 30:
The company's total number of branches (including acquired Merrill Lynch branches) declined to 5,401 as of June 30 from 5,660 in June 2012 and 6,202 in June 2008. That is a very significant decline in branch count, perfectly illustrating the effect of the cost-cutting program. BAC's total deposits declined by 1.6% over the 12-month period ended June 30 to $1.147 trillion. That's still a huge number, increasing 48% from five years earlier. That growth in part reflects movement of brokerage clients' cash to insured deposits, and also the incredibly high level of overall liquidity brought about by Federal Reserve policy. Most of the recent headlines on monetary stimulus policy have focused on the Fed's monthly bond purchases of $85 billion, and the eventual "tapering" of the purchases, which have been meant to hold-down long-term interest rates. But the central bank's main policy tool is the short-term federal funds rate, which has been held in a range of zero to 0.25% since late 2008. With money market funds paying next to nothing, customers have little incentive to park their cash outside of banks. Bank of America is continuing its long, slow climb to a decent level of profitability, and the continued recovery in home prices, together with the "Project New BAC" have the company finding favor with investors. Bank of America's shares closed at $14 Thursday and traded for 10.3 times the consensus 2014 earnings estimate of $1.36, among analysts polled by Thomson Reuters. That's the same forward P/E as Wells Fargo, which has been the most profitable among the big four over the past five years.
As the nation's largest mortgage lender, Wells Fargo has a particular focus on holding down costs, as the refinancing boom subsides. The company will announce its third-quarter results next Friday, with analysts, on average, expecting the company to post EPS of 97 cents a share, declining from 98 cents the previous quarter, but increasing from 88 cents a year earlier. Wells Fargo's shares closed at $41 Thursday and traded for 10.3 times the consensus 2014 EPS estimate of $4.00.
Citigroup had a fourth-place U.S. deposit market share of 4.74% as of June 30, increasing from 4.43% in June 2012 and 3.86% in June 2008. The company's total U.S. deposits were $447.604 billion as of June 30, growing 13% from a year earlier, and 65% over the previous five years. Citigroup had also been an active cost-cutter in the wake of the financial crisis. The company trimmed its U.S. branch count to 1,042 as of June 30 from 1,070 in Jun 2012 and 1,079 in June 2008. The company will announce its third-quarter results on Oct. 15, with analysts expecting EPS of $1.06, declining from $1.34 in the second quarter, but matching the earnings in third quarter of 2012. KBW analyst Christopher Mutascio is ahead of the consensus, estimating Citigroup will report third-quarter EPS of $1.16, but on Wednesday he lowered his EPS estimate from $1.21. The analyst wrote in a note that "we expect trading revenues to decline 21% from 2Q13 (versus a 14% decline previously)." Lower third-quarter trading revenue is another major theme for the big banks heading into third-quarter earnings season, as some investors played it safe while waiting for the Federal Open Market Committee to decide whether or not to reduce the Federal Reserve's bond purchases. Shares of Citigroup closed at $48.40 Thursday and traded for 8.8 times the consensus 2014 EPS estimate of $5.51. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn