First published in S&P Market Intelligence, for the first time since October 2011, U.S. banks opened more branches than they closed.
During July, U.S. banks and thrifts closed 60 branches nationwide, while opening 96, according to S&P Global Market
Intelligence data, which does not include temporary bank closures, such as those caused by the COVID-19 pandemic.
Since 2008, the trend has generally been toward net closures, with few respites, but ongoing branch expansion plans
for some banks led to the first month in almost nine years in which openings outpaced closings.
"This 'branches are closing' theme has been oversold for quite some time. Sure, there's always going to be closures,
but there's always going to be openings as well," Dave Martin, founder of bankmechanics, said in an interview. "The
branch is much more than transactions — it's your presence and where you keep your bankers."
New York-based JPMorgan Chase & Co. was the most active branch opener in July with 13 net openings during the
month, a marked change from the month prior when it had 22 net closings. The company is currently working on a 400-
branch expansion over the span of five years into new markets such as Charlotte, N.C. , and Kansas City. It recently
opened its 100th market-expansion branch and plans to open an additional 75 by the end of the year, CFO Jennifer
Piepszak said on the company's second-quarter earnings call."If [Chase] is building branches, that tells you something," Martin said. "[Banks] are not abandoning branches in any
way, shape or form." Physical presence is still vital for banks, especially when entering a new market, he said.
"We continue to invest in branches because they still matter to our customers," a spokesperson for JPMorgan Chase
wrote in an email. "Over 30 million households visited the branch last year and, by expanding into states representing
95% of the U.S. population in the next few years, we'll be able to serve even more customers.
"Customers visit the branch for advice and more complex transactions, while using digital channels to manage everyday
banking, like depositing or transferring money," the email said.
At some locations, deposits are growing three-times faster than expected, Sarah Youngwood, chief financial officer of JPMorgan Chase's Consumer & Community Banking segment, said at a conference in November 2019. She also noted that two-thirds of new accounts in new markets have been opened digitally.
At the state level, Texas had the most branch openings with nine net openings during July. San Antonio-based
Cullen/Frost Bankers Inc. opened four branches in Texas during July as part of its ongoing expansion in the Houston
"Houston is a huge market, and it's growing rapidly. Frost has had a presence in Houston since 1977, but frankly we're
underdeveloped there," Bill Day, senior vice president of corporate communications, wrote in an email. "At the time that
we started our expansion, we had only about a 2 percent market share in the Houston region. There is tremendous
opportunity for growth as we extend our value proposition to people who aren't familiar with us."
The company plans to open 25 financial centers by the end of the first quarter of 2021. Cullen/Frost has opened 18 of
those locations as of Aug. 10 and plans to open another location on Aug. 24.
According to Martin, the decline in branch closures during July could be attributed to the difficulty of assessing foot
traffic and branch usage due to social distancing measures.
"There are banks that have identified branches they intend to close," he said. "A lot of those decisions have been made,
but they are not going to pull the trigger until things sort out. Things have been disrupted enough."
San Francisco-based Wells Fargo & Co. was the most active closer in July, shuttering seven branches, including two in
California and two in Montana. The remaining branch closures were in Colorado, Florida and Tennessee.
On the company's second-quarter earnings call, CEO Charles Scharf said the pandemic has provided opportunities to
reduce expenses, including increasing digital adoption among customers and branch consolidation.
As of July 31, there were 85,306 active branches in the U.S. Over the last year, U.S. banks and thrifts have closed 2,319
branches and opened 1,136.
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