This paper systematically examines the specification of cost functions for 386 branches of a large Korean deposit bank and attempts an empirical analysis of the magnitude and determinants of X-efficiency at the bank branch level. In particular, considering that the management activities of bank branches are significantly influenced by their location, the analysis was conducted by branch groups classified according to location clusters. For the branch data analyzed, the Fourier flexible functional form cost function was found to exhibit higher goodness of fit as a cost function compared to the translog functional form, which has been widely used in cost efficiency studies. Substantial X-inefficiency was found to exist at the bank branch level, with X-efficiency showing marked differences across location cluster branch groups. The explanatory variables that statistically significantly affect branch X-efficiency and the degree of their influence on X-efficiency were found to differ across location clusters. These analytical results imply that efficient management measures at the branch level are necessary for improving X-efficiency at the bank level, and they provide useful implications for more efficient branch strategy formulation and branch management during the restructuring process of domestic banks.