Cincinnati Ranks No. 1 for Consumer Banking

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American Banker
By:  Brian Browdie
April 2, 2013

For a good deal on a bank account, move to Cincinnati.

The Ohio city tops a list of the 10 best cities for consumer banking in the U.S. as compiled by Nerdwallet, a financial literacy website.

Nerdwallet's inaugural ranking examined the nation's top 100 metropolitan areas and ranked the top 10 by the bounty of their banking.

Of those 100 markets, Cincinnati has the highest number of branches per resident and the lowest median checking account fees. It also has had zero bank failures since 2009.

Pittsburgh, Madison, Wis., Tulsa, Okla., Birmingham, Ala., Washington, D.C., Miami, Irvine, Calif., Buffalo and Orlando round out the top 10 list, which also considered branches per capita, average yields on savings accounts and the percentage of households that have bank or credit union accounts.

"We know from experience that banking options and services for consumers can vary drastically from region to region," John Gower, a senior analyst at Nerdwallet, told American Banker. "We wanted to take a look at where some of these options are best for consumers."

To develop their ranking, Gower and his colleagues looked at banks and credit unions in the 100 most populous cities using data from such sources as the Pew Charitable Trusts, the Federal Deposit Insurance Corp., the National Credit Union Administration and the U.S. Census Bureau.

Though Pittsburgh has a median checking account fee of $14 per month compared with an average of $11.79 in the top 100 cities, 74% of households in the Steel City maintain a traditional banking relationship, compared with 68.5% nationally, according to Nerdwallet.

In Madison, which Nerdwallet also has named to its list of America's most-educated cities, 85.5% of households have an account with a bank or credit union.

Consumers in Tulsa enjoy an average yield on savings of 1.8%, compared with 1% nationally, while consumers in in Birmingham can take advantage of average yields of 2.9%, the highest of any top-100 city.

One reason why rates in Birmingham could be so high is that competition there is especially fierce. According to Nerdwallet, there are 29 separate banks and credit unions for every 100,000 residents in the Birmingham market, most among the cities ranked in the top 10. By contrast, there are only 15 banks and credit unions per 100,000 residents in Buffalo and just 17 per 100,000 in Tulsa, Washington and Madison. (The national average is 11 banks and credit unions per 100,000).

Still, only 52.3% of households in Birmingham have a relationship with a bank or credit union, compared to 68.5% nationally. Apart from Madison and Pittsburgh, other cities that boast a high percentage of "banked" consumers are Buffalo (79.8%) and Washington (73.2%).

Another key metric is number of branches per 100,000 residents. Cincinnati is tops in that category, with 124, followed by Orlando (106); Pittsburgh (105); and Miami (98). Among the top 10 cities, Buffalo has the fewest branches per 100,000 residents, at 38, followed by Irvine and Tulsa, with 54. The national average is 39 branches per 100,000.

"Even though some of these cities performed well, there are still areas of weakness where they can improve upon," says Gower.

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