Many bank brands are doubling down with expansion post-COVID. Watch for these banks to open branches in communities that are proliferating as a result of the mass exodus away from urban core areas, in addition to opening units in newly vacant spaces within urban metro communities. These banks are especially keen to take up empty restaurant drive-thru spaces near office and multifamily developments. The national optimism for future planning, whether it happens to be small business owners seeking loans, families seeking a home equity line of credit or Gen Z customers opening their first checking accounts, means that the time is ripe for banks to confidently open new branches. As banks such as Wells Fargo take a pause in retail growth due to the rise of online banking trends, other banks, including Bank of America, JPMorgan Chase & Co., PNC Bank, Citizens Bank, Fifth Third Bank and Regions Bank, are prepared to expand their brick-and-mortar reach throughout the country.
Customers are more than ready to embrace the convenience and camaraderie of one-on-one, in-person transactions in a physical bank, especially if it is located where they already run their errands, such as at grocery-anchored centers. Banks prefer having a growing brick-and-mortar presence not only to offer this face-to-face relationship with their clients, but also because of the ease of “cross selling” additional loan features for walk-in customers, which is a more effective sales tactic than relying on cold calls. Look for future bank layouts to especially cater to the tech-savvy younger millennial/Gen Z demographic, with features that include the removal of teller queues, and the addition of roaming employees armed with tablets, similar to an Apple Store interior.
JPMorgan Chase & Co., is in major expansion mode, expecting to open a whopping 150 new units this year and 60 new units in 2022. With a goal of having a presence in every state, with the exception of Hawaii and Alaska, JP Morgan Chase is especially focused on opening more units throughout major metros in Albuquerque and Santa Fe, N.M., Portland, Maine, Philadelphia, Boston, Washington, D.C., Ocala and Gainesville, Fla., and throughout the northwestern territories of Oregon, Wyoming and Montana. Look for Jackson, Miss., Nashville, Tenn., St. Louis and uptown Minneapolis to also see further growth. With up to seven different prototypes that can accommodate all types of retail spaces, JPMorgan Chase primarily seeks space between 2,500 and 5,000 s.f., on land between 0.5 and 1 acre in B+ to A locations. Space can be either a freestanding pad site close to a busy street that is a part of a strip mall, or an inline or end cap space on main and main. Preferred co-tenants are brands that get frequent traffic from a wide ranging demographic, including CVS Pharmacy and Marshalls. JPMorgan Chase is doubling down on brick-and-mortar branches through its $200B, five-year market expansion plan that the bank unveiled in 2018. JPMorgan Chase is also opening community center branches in urban areas, and the centers will provide community events such as financial health workshops and small business pop-ups.
Bank of America anticipates opening approximately 35 to 40 new units per year over the next two years. Growth will take place in Cleveland, Salt Lake City, Denver, Minneapolis, Pittsburgh and throughout Kentucky. The bank generally seeks space in the 4,000- to 6,000-s.f. range in 1-acre plots, in both urban and suburban locations in highly visible areas. Space can be as large as 10,000 s.f. in dense areas and can be a standalone unit or a shared two-tenant outparcel site, with drive-up ATM access, in a grocery-anchored center, a strip center, a lifestyle center, or the ground floor of a mixed-use office building. Locations tend to be near high-traffic daytime staples, including grocery stores, Starbucks, McDonald’s and Planet Fitness. Unlike JP Morgan Chase, Bank of America will not be focused on entering new markets, but instead will open additional units where it already has a presence. By law, Bank of America is unable to acquire other bank brands at this time, because it already possesses more than 10% of the nation’s deposits.
PNC Bank, through its purchase of BBVA in June for $11.6B, expects to convert BBVA’s 637 branches into its PNC brand by October. The acquisition also cements the bank’s goal of expanding its footprint into Western markets, including its penetration into the new states of California, New Mexico and Arizona. The acquisition will also increase PNC’s presence in Texas, Colorado, Florida and Alabama. PNC is especially focused on prioritizing the markets of San Antonio and Austin, Texas, in addition to Orlando, Fla., and San Diego.
Aside from the acquisition conversions, PNC will also further expand with an additional 20 to 25 new bank centers per year over the next two years, especially as it continues its push into Boston, Nashville, Tenn., Charleston, S.C., Dallas, and the Northwest markets of Portland, Ore., and Seattle. PNC plans to open these new branches in its “solution center” format after its initial 12-unit rollout of the format in 2016. These solution centers are between 2,000 and 2,500 s.f., a reduction of PNC’s usual units that average 3,500 s.f. PNC prefers these units to be in ground-floor, mixed-use spaces of office buildings in retail shopping areas, in addition to end caps of standalone outparcels with up to three shared tenants, such as its unit that opened in July of 2020 in Irving, Texas, that shares outparcel space with a Chipotle and a T-Mobile. The solution centers merge physical and digital banking, removing the traditional teller windows in favor of conversational gathering spaces in which employees use portable tablets for customer transactions. Customers can also project their phone screens to a large plasma screen in order to watch guided demonstrations more easily for various bank services.
Citizens Bank will be expanding after its acquisition of 80 HSBC Bank USA branches, expected to be complete by the first quarter of 2022. This will especially push Citizens into the metro Northeast markets, as HSBC has 75 locations that span from New York City through the Washington, D.C., and Mid-Atlantic areas, in addition to HSBC’s five locations in the Southeast region of Florida. Before the acquisition, Citizens had been closing approximately 50 units per year over the last two years. The bank has hinted that it intends the acquisition to jump-start its goal to continue opening new units, especially in densely populated Midwest markets. Its square footage requirements range from 1,500 to 2,800 s.f. for its new “advice center” units that premiered in 2018, and that are an intentional reduction from its usual square footage of up to 4,200 s.f. This is because the newer Citizens Banks are focusing less on traditional teller lines, and more on private meeting rooms for customer services, in addition to utilizing media-playing technology for various topics, such as retirement planning. Citizens Bank generally seeks end cap, corner units in freestanding parcels with up to three different tenants, or standalone units in grocery-anchored strip mall spaces. The bank is especially interested in continuing to open in more densely populated urban environments, in addition to its suburban units.
Fifth Third plans to open approximately 25 to 30 new units per year over the next five years, with a focus on fast-growing Southeast markets. Look for South Carolina, Georgia and markets in and around Nashville, Tenn., Tampa, Fla., and Charlotte and Raleigh-Durham, N.C., to especially be targeted, with approximately one-third of the expected new openings to be in lower to moderate income areas. Fifth Third will seek outparcel standalone spaces or outparcels in grocery-anchored centers, as well as end cap spaces within strip centers, all preferably with drive-thru access. Space should be close to multifamily developments or office districts in urban and suburban areas alike. Its new units will continue to be its “Next Gen Financial Center” concept, which premiered two years ago and averages 2,400 s.f. This space is geared to attract the millennial customer with its more open layout, “tech wall” digital screens and semi-private seating spots that use tablet technology instead of the traditional queuing up to see a teller.
Regions Bank anticipates opening approximately 10 to 20 new banks per year over the next two years. The bank will continue to target high-growth and tourist markets in the South/Southeast where it already has a presence, and Regions is primarily focused on adding units throughout Orlando, Fla., Houston and Atlanta in the immediate future. Regions looks for standalone units, especially outparcel pads in strip centers and grocery-anchored centers, with high-traffic, co-tenants such as The Home Depot. Its banks range from 1,800 s.f. to 2,700 s.f., although the space can be as large as 10,000 s.f. in select, growing markets. Expect new units to continue featuring an updated branch design, rolled out in 2018, which include video banking ATMs in both its lobbies and drive thrus that allow bank representatives to interact with customers at extended hours. The new design also prioritizes expanded floor plans that eliminate the teller line in favor of open desk areas for the guests and bank employees to interact more personally.
