Three years ago, JPMorgan Chase became the first bank with a branch in all 48 contiguous states. Now, the company is expanding, aiming to reach more Americans in smaller cities and towns.
JPMorgan recently announced a new target within its framework multi-billion dollar branch expansion plan which ensures that coverage is within an “affordable driving time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for President and CEO Jamie Dimon as he embarks on his 14th annual bus tour Monday.
Dimon’s first stop is in Iowa, where the bank plans to open 25 more branches by 2030.
“From fostering community development to helping small businesses and teaching financial management skills and tools, we strive to extend the full power of the company to all the communities we serve,” Dimon said in a statement.
He will also travel to Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. In those six states, the bank has plans to open more than 125 new branches, according to Jennifer Roberts, CEO of Chase Consumer Banking.
“We’re still at very low single-digit branch share, and we know that to really optimize our investment in these communities, we need to be at a higher branch share,” Roberts said in an interview with CNBC. Roberts travels with Damon throughout the Midwest for the bus tour.
Roberts said the goal is to achieve “optimal branch share,” which in some newer markets is “more than double” current levels.
At the bank’s investor day in May, Roberts said the company was aiming for a 15% share of deposits and that expanding the reach of bank branches was a key part of that strategy. It said 80 of the 220 basis points of the company’s deposit share gain between 2019 and 2023 was from branches less than a decade old. In other words, almost 40% of these deposit share gains can be linked to investments in new physical branches.
By expanding its footprint, JPMorgan is bucking the broader banking industry’s trend to close branches. Higher interest rates have created headwinds across the industry due to funding costs, and banks have opted to reduce their branch footprints to offset some of the macroeconomic pressures.
In the first quarter, the U.S. banking industry recorded 229 net branch closings, compared with just 59 in the previous quarter, according to S&P Global Market Intelligence data. Wells Fargo and the bank of america closed the highest net number of stores, while JPMorgan was the most active net opener.
According to FDIC research compiled by KBW, bank branch growth peaked just before the financial crisis in 2007. KBW said this was due, in part, to banks evaluating their own efficiency and closing underperforming locations , as well as technological advances that enabled electronic banking and remote deposit capture. That secular tally worsened during the pandemic, when banks reported little change in operational capacity even when physical branches were temporarily closed, the report said.
But JPMorgan, the nation’s biggest lender, posted a record profit of $50 billion in 2023 — the most ever for a US bank. As a result, the company is in a unique position to spend on bricks and mortar while others choose to be more prudent.
When it comes to prioritizing locations for new branches, Roberts said it’s a “balancing of art and science.” He said the bank looks at factors such as population growth, the number of small businesses in the community, whether there are new corporate headquarters, a new suburb being built or new roads.
And even in smaller cities, foot traffic is a critical component.
“I always joke that if there’s a Chick-fil-A there, we want to be there,” Roberts said. “Because Chick-fil-A, wherever they go, is always successful and busy.”
