Social distancing measures have closed bank branch lobbies, offering U.S. banks an opening to rethink footprints post-COVID-19. At the same time, some banks are pressing ahead with branch opening plans, saying the pandemic has not affected their strategic thinking.
In addition to accelerating banks' digital strategies and forcing increased usage of online and mobile banking, social distancing measures are also causing some banks to reevaluate their branch footprints.
"We have clients [asking] 'Should we ever even reopen some of our lobbies?' I'm having more discussions about branch closures right now than anything," Charles McQueen, president and CEO of McQueen Financial Advisors, said in an interview.
Over the past month, McQueen Financial Advisors has been retained by financial institutions looking to evaluate potentially closing branches, the impact on deposits and loans if they were to close branches and recent mobile banking adoption, he said.
On Providence, R.I.-based Citizens Financial Group Inc.'s first-quarter earnings call, Brendan Coughlin, head of consumer banking, discussed the future of the bank's brick-and-mortar branch footprint after a recent surge in usage of online and mobile banking.
"Like the future of our brick-and-mortar distribution network, how do we reposition that for consumers that have got used to coming in less frequently, but still being able to manage their money effectively and get advice?" he said.
While some banks reevaluate their branch footprints post-COVID-19, others are expanding their branch footprints, like San Antonio-based Cullen/Frost Bankers Inc.
Cullen/Frost is currently working on its expansion into the Houston market with 25 planned financial centers. The bank opened 10 of those branches during 2019 and opened the 11th during the first quarter, Chairman and CEO Phillip Green said on the company's first-quarter earnings call. The bank plans to open two more financial centers during May, Green said.
"COVID has not affected the expansion strategy," Bill Day, senior vice president of corporate communication, said in an interview. "Rather than shrinking our footprint, we are expanding our footprint because we still see value in having physical financial centers."
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The two new financial centers that expected to open during May will likely have their lobbies closed like the rest of the bank's financial center lobbies, Day said.
"It looks a little different because of the pandemic but it looks different in the same way that all our locations look different," he said. One of the two financial centers has a drive thru, Day said.
The 25 planned financial centers in the Houston area are part of the bank's initiative to boost its presence in the market. Day said that some customers, especially business customers, like having physical locations where they can meet with a banker.
"There is still value that they are in the neighborhoods and they are there to help people," he said. "That's still important. We let our customers dictate to us how they want to be served."
U.S. banks and thrifts closed 157 branches in April while opening only 17, according to S&P Global Market Intelligence data. S&P Global Market Intelligence's bank branch data does not include temporary bank closures, such as those caused by the COVID-19 pandemic.
Over the last year, U.S. banks and thrifts have closed 2,733 branches and opened 1,202. As of April 30, there were 85,654 active branches in the U.S.
Evansville, Ind.-based Old National Bancorp closed a total of 31 branches, with 11 closures in Wisconsin and 10 in Indiana. Canada-based Bank of Montreal followed the trend by closing 26 U.S. branches, 14 of which were also based in Wisconsin. There were no banks that opened more than one branch in April.
Wisconsin saw 24 net closures last month, more than any other state in the nation, followed by Pennsylvania at 15. Meanwhile, no state or territory saw more than one net opening.
Click here to access a template containing bank branch openings and closings for March 2020.