Dive Brief:

• PNC is boosting its physical expansion plans across the country, allocating an additional $500 million to open and renovate more bank branches, to bring its total investment in its retail presence to $1.5 billion.
• The Pittsburgh-based super regional said Friday it now plans to open about 200 new branches in 12 U.S. cities over the next five years, according to a news release.
• Additionally, the bank now plans to renovate 1,400 existing branches by 2029.

Dive Insight:

Friday’s announcement expands upon PNC’s plans shared in February that the lender aimed to spend close to $1 billion on opening 100 new branches and renovate 1,200 existing locations across the U.S. 

The bank had already identified Austin, Dallas, Houston, San Antonio, Denver and Miami as markets where it planned to build new branches. Now, the bank also aims to grow its branch network in cities that have seen rapid growth: Atlanta, Charlotte, Raleigh, Orlando, Tampa and Phoenix. 

In Miami, in particular, PNC wants to “meaningfully expand” the number of new branches it will open, targeting about 40 more locations by 2029, compared to a previous goal of five. The bank now plans to add about 25 branches each in Charlotte and Atlanta by 2029, as well as 20 in Tampa and 10 in Phoenix, according to a PNC presentation shared Friday.  

And the bank will add Salt Lake City as another new market in 2025, PNC President Michael Lyons said during an appearance Friday at the BancAnalysts Association of Boston conference. 

PNC currently has about 2,200 branches across the U.S.; that’s down from about 2,300 it said it had in February. 

Boosting the bank’s expansion plans reflects the momentum the company is seeing and the opportunity envisioned in new, fast-growing markets, Lyons said.

“The planned openings are very calculated and based on the goal of getting all of these attractive markets to at least a 7% branch market share, a level where we see a high correlation to accelerated [demand deposit account] growth,” he said. 

Through the new and renovated branches, the bank is also eyeing opportunities to deepen relationships with customers with products such as credit cards and auto and home loans, he said.

Over time, the bank envisions a $6 billion revenue gain across its corporate and institutional banking and asset management businesses, as new markets become as productive as PNC’s legacy markets, Lyons said. In the near term, that’s projected to be about $3.5 billion.

“We have a reasonable expectation that near-term would be three to five years,” CFO Robert Reilly said during the conference appearance. “If we do it right, sooner than that.”  

PNC isn’t alone in giving more attention to physical locations, even as customers turn to digital channels for more of their everyday banking interactions. 

The No. 1 and No. 2 banks in the country, JPMorgan Chase and Bank of America, are each adding new branches in certain U.S. markets, as they also consider renovations or closures of existing locations. Many banks are working to revamp branches to better meet customer needs, with less emphasis on tellers as online banking has grown more popular. 

In September, PNC CEO Bill Demchak expressed concern about big bank rivals opening branches across the U.S., saying PNC needed “to fight that.” PNC needs to “pretty aggressively” step up its retail presence in newer markets, to create a core deposit franchise that supports the bank’s long-term push for growth in its corporate and institutional banking business, he said.

At the moment, organic growth is more of a focus for PNC than acquisitions, Demchak said in September, and executives underscored that notion Friday. Current valuations of likely M&A candidates exceed what they’re worth, Reilly said. 

“Our pursuit of organic growth doesn’t preclude us from doing a strategic acquisition at an attractive price, if one happens to materialize. We’re just not going to sit around waiting for that to happen,” Lyons noted.

As PNC pursues a “coast-to-coast” presence, further M&A likely plays a role, especially with another Trump administration on the horizon, Piper Sandler analyst Scott Siefers wrote Friday.

PNC also faces a number of competitors targeting growth in the Southeast, as cities in that region have swelled. At the conference Friday, Cincinnati, Ohio-based Fifth Third also highlighted its plans to grow its share in Southeast markets. 

Columbus, Ohio-based Huntington, too, is another regional lender that’s recently announced expansion plans in the Carolinas.