Bank of America is considering expanding its retail banking footprint into seven new markets, including Milwaukee; New Orleans; Birmingham, Alabama; Madison, Wisconsin; and Boise, Idaho, a bank executive said Monday.
But it will do so as it continues shutting branches, he said.
BofA is operating in 83 of the top 100 markets, but it will reach 90 by the end of 2025, Aron Levine, the bank’s president of preferred banking, said at a Morgan Stanley conference Monday.
The country’s second-largest bank has opened in 15 markets in the past eight years, including Pittsburgh, Salt Lake City and Indianapolis, Levine said.
“So that’s one part of our strategy, which is grow in the expansion markets, and we do it very efficiently. So really good success of how fast we can grow with a small number of centers,” he said at the conference.
The expansion sets up a clash over market share. In Milwaukee, for example, Bank of America will try to muscle in on the 41% of deposits U.S. Bank holds, according to Federal Deposit Insurance Corp. data. In Birmingham, it will face off against Regions, which holds 33%, according to American Banker.
BofA is aiming to expand in areas "where their presence doesn't match what they feel potential is in the market,” Dave Martin, a consultant specializing in retail banking strategies, told the publication.
Levine highlighted BofA’s strategy of closing two locations for each that opens. The bank is taking note of data related to traffic reduction and changing demographics to decide on branch closures. The lender closed 525 centers in 2021 and 2022, Levine said.
“So what you’ll see from us is each year, we continue to add centers across the country,” he noted. “But on a net basis, we reduce as we identify those places where there’s a couple of older centers that could go and we replace it with a brand-new center. By the end of this year, we’ll have the entire 3,800 having been renovated.”
BofA launched an aggressive renovation program five years ago, aimed at modernizing each center.
“I think it’s very much in equilibrium with traffic for transactions that has gone down substantially, but we have specialists so that the number of appointments that we have keeps going up,” Levine said. “It’s gone from transactional to relationship to a broader, more sophisticated set of conversations.”
BofA is also integrating digital into its financial centers so that clients can experience it whether they walk into a branch or engage in the mobile app or online banking, Holly O’Neill, president of retail banking, said at the event.
BofA is hardly the only banking giant looking to expand its nationwide footprint. JPMorgan Chase has launched in 17 new states since 2017. However, it has 500 fewer total branches than it did six years ago, Jennifer Piepszak, the bank’s co-CEO of consumer and community banking, said Tuesday, according to American Banker.
“Retail banking is still a very local business, and you can have a different density of footprint, much less dense than you would have needed 10 or 20 years ago, because of the complement of digital,” Piepszak said.
