Largest US Banks Are Binging on New Branches

Article originally posted on Globe St. on February 19, 2024

They called it the “Great Consolidation,” a wave of bank branch closures during the pandemic that seemed to herald a new age of digital banking that would turn your favorite local vault into a relic from a bygone era.

Well, we just got an overdraft notice on that gloomy outlook: The pandemic is over-CDC is about to cancel its five-day isolation guideline if you catch COVID-and bank branches are popping up all over the place, especially in the Sun Belt.

Two of the nation’s largest banks this month announced massive expansions of their already huge U.S. branch footprints.

JPMorgan Chase—number one on everybody’s list with nearly $3.4T in assets—disclosed plans to build 500 new branches during the next three years, a multibillion-dollar investment that will push the behemoth’s branch total up over 5,000, the Wall Street Journal reported.

PNC Bank, number seven on the Federal Reserve’s list of top U.S. banks with about $554B in assets, this week announced that it will invest $1B to open more than 100 new branch locations and renovate 1,200 existing outlets through 2028.

PNC’s growth plan is focusing on several cities in Texas, including Austin, Dallas, Houston and San Antonio, as well as Denver and Miami. PNC currently has 2,300 brick-and-mortar outlets in the U.S., according to the bank’s release.

JPMorgan told WSJ it plans to expand its footprint in markets it has recently entered, including Boston, Philadelphia and Charlotte.

The fiscal giant actually began its branch binge in 2018; between 2018 and 2023, JPMorgan opened more than 650 new branches and entered 25 states, becoming the first U.S. bank with branches in the 48 contiguous states.

When JPMorgan enters a new market, it doesn’t tip-toe: in Boston, which the bank entered in 2020, branch deposits encompassed a total of nearly $9B last year, according to an FDIC report.

Bank of America, no. 2 on the Fed’s list with $2.5T in assets and 3,900 branches, isn’t planning to get outflanked as JPMorgan keeps growing. Last summer, Bank of America announced it would enter nine new markets and four states, which would bring its total to 39 states.

Regional banks also are joining the party, with several Midwest banks pursuing aggressive growth strategies in the Southeast.

Cincinnati-based Fifth Third Bank disclosed in a call with financial analysts last week that it is planning to open 31 new Southeast branches this year, including 25 branches in South Carolina.

Fifth Third is pursuing a strategy that will divide its portfolio 50/50 between the Midwest and Southeast within the next five years. The Ohio bank has opened 110 branches in the Southeast in the past four years, including 37 last year.

The Southeast portfolio of Fifth Third, a regional bank with about $215B in assets, now includes a total of 330 branches in North Carolina, South Carolina, Georgia, Florida and Tennessee. The bank is planning to increase its Southeast workforce, now totaling 3,200, by 15%.

In November, Indiana-based First Financial announced it was buying Tennessee-based SimplyBank in a $73M cash transaction. SimplyBank, with $702M in assets, has 10 Tennessee branches and three Georgia. The acquisition expands First Financial’s footprint into Georgia for the first time and doubled its footprint in Tennessee, where it has nine branches.

The Indiana bank, which has nearly $5.5B in assets, first entered the Volunteer State in 2019 when it acquired HopFed Bancorp, headquartered in neighboring Kentucky.