It may seem counterintuitive, seeing how millions of consumers have switched to banking on a smartphone or laptop, but some banks are racing to open hundreds of new branches from coast to coast.
Three of the largest banks in the United States — JPMorgan Chase, Bank of America and PNC Financial Services Group — are leading the charge. Those three institutions want to open a combined 870 new branches by 2030.
They’re not the only ones. Regional and community banks and credit unions, ranging from Cincinnati’s Fifth Third Bank to the tiny Red Crown Credit Union in Tulsa, Oklahoma, are also launching construction projects. Many new branches come with drive-thru lanes, too.
One word explains the trend: deposits. Federally insured deposits are the backbone of the banking industry. They provide banks and credit unions with low-cost fuel for making loans. And one of the best places to gather deposits is a physical branch, especially at an easy-to-access spot on a busy intersection, Nichole Popovics, managing director at brokerage TSCG, told CoStar News.
“They’re really making sure they are where the people and the traffic are,” said Popovics, who specializes in retail leasing.
PNC plans to spend about $1.5 billion to open as many as 220 branches by 2030, according to the bank. The seventh-largest U.S. bank measured by assets, PNC is targeting a dozen Sun Belt markets for its branch expansion, including Dallas, Houston, San Antonio and Austin in Texas; Miami, Tampa and Orlando in Florida; Charlotte and Raleigh in North Carolina; Atlanta; Denver; and Phoenix.
“There’s a race on for retail deposits,” PNC CEO Bill Demchak said during a July 16 conference call. “That's why we have this big focus on the investment in building branches.”
To be clear, not all banks are opening additional branches. Some are focusing on finding the most streamlined way to be more profitable, and not all say that using more real estate is the best way toward that goal.
Missing the 'human touch'
Even so, PNC has found consumers still like walking into a bank branch, said Jeff Martinez, executive vice president and head of branch banking at PNC.
“Things that seem simple, but with the growth in digital banking, the human touch has been missing,” Martinez told CoStar News. “When I walk into a PNC branch, I get the door opened, I get a handshake, I meet the manager. It’s a service that, today, is being sought after.”
Fifth Third expects to open 50 branches this year, primarily in the Southeast, an area it views as a key growth region. Fifth Third said its efforts to collect deposits at its recently opened branches have been successful.
“Branches built between 2022 and 2024 are averaging over $25 million deposit balances within the first 12 months after opening, significantly outpacing our original expectations,” Bryan Preston, chief financial officer, said during Fifth Third's July 17 conference call.
Developers and landlords of shopping centers like banks, too, said Mark Reeder, executive vice president and principal at SRS Real Estate Partners.
“Banks have great credit-worthiness and landlords like having that type of credit in their shopping centers,” Reeder told CoStar News.
Even with some banks’ aggressive strategies, the total number of bank branches in the U.S. is still on the decline. About 2,200 branches closed in 2024, the most-recent data available, according to the American Bankers Association. But more than 1,100 branches opened, for a net loss of 1,100 branches.
Some branches closing
Chase, Bank of America and PNC are also closing branches, specifically those in markets that aren’t growing. At the conclusion of PNC’s expansion program, the Pittsburgh-based company projects it will have about the same number of branches as it does now, approximately 2,300. They’ll just be concentrated in the 12 most-promising metropolitan areas, Martinez said.
“We’re running toward population growth,” Martinez said.
Yet M&T Bank, a Buffalo, New York-based institution located in the Northeast and Mid-Atlantic, has no plans to open new locations.
Steven Alexopoulos, an industry analyst with TD Securities, asked an M&T executive during a July 16 conference call, “Do you feel more of a burning need just to get larger to compete against the mega banks?”
Daryl Bible, M&T’s chief financial officer, responded, “Absolutely not.”
“What we focus on is being simple...” Bible said. “We don’t have to be the biggest bank.”
Plenty of other banks, however, are lining up architects and contractors and spending money on bricks and mortar.
One small community bank in the northern suburbs of Dallas-Fort Worth shows how bankers want locations that are easy to access by vehicle. First State Bank this month opened an 11,700-square-foot branch at 2315 N. U.S. Highway 75 in Sherman, Texas, complete with four drive-thru lanes. It’s located just off an exit ramp to a limited-access freeway.
And while it may be easier than ever to deposit a check using a smartphone, even savvy banking customers like TSCG’s Popovics enjoy the experience of walking into branches.
“People ask me, ‘You actually go into a bank?’” Popovics said. “And I do. And other people are still going in.”