Big Banks Are Heading South… and Loving It

In early February, JPMorgan Chase announced plans to triple the number of branches it has in Alabama to 35 by 2030, part of the megabank’s massive multi-year expansion into new markets and in-filling of markets it already serves.

For the sake of perspective, note that number is dwarfed by the size of the branch network of the state’s largest home bank, Regions, which had 1,262 branches as of mid-June 2024. However, the plans for growing the Chase network in Alabama are significant because Chase opened its first Alabama bank just five years ago. And now, according to a statement from the bank, the trebled network would put over half of Alabama’s population within "an accessible drive time to a Chase branch."

The bank was convinced to expand in Alabama because of its "strong manufacturing economy, good small business growth, and burgeoning aerospace and technology sectors."

More significant than the booming presence of Chase, which is expanding in many markets nationwide in multiple ways, is that it has growing company in much of the Southeast. No pun intended, but right now the region is hot with bankers. They come seeking growth in loans, deposits and asset management business.

Certain parts of the Southeast have long had appeal to out-of-state institutions, notably, for example, upscale markets like West Palm Beach and other places in Florida. It’s common for New Yorkers to call the state "New York South," especially during bad winters, and institutions from cold northern cities followed their well-heeled clientele to warmer climes.

(For purposes of this article, we define the Southeast broadly, as the 11-state region that includes Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia. As a benchmark, note that from mid-2020 to mid-2024, all lost branches, with the top four in branch loss being Virginia, 17.5%; Georgia, 12.4%; Florida, 11.1%, and North Carolina, 10.5%.)

But today’s movement is different from the snowbird scenario. Bankers say they are not just following the money, but following growth opportunities.

For some, growth through branching continues to offer potential that can’t be realized by acquisition. (At the same time, large institutions are also closing, consolidating and otherwise "optimizing" overall networks.) For some institutions, the choice of branching is a matter of legal restrictions; for others, it’s a matter of market realities. James Rohr, former chairman of PNC, is often quoted as saying that banks are not bought, but instead sold. Observers don’t see a lot of bigger banks seeing themselves as saleable assets, but as buyers. William Demchak, present chairman and CEO, has said as much in recent months about the market, while noting that PNC wants to achieve greater scale.

"We know that when we go into an expansion market … where we have a financial center located within 15 miles of that new market, we drive 50% more in digital sales."

— Holly O’Neill, Bank of America

The behemoths of banking on this field also defy geographic description. For several years now, JPMorgan Chase has had retail branches in the 48 contiguous states. And while Bank of America’s name comes from a West Coast antecedent, that arises from its acquisition by NationsBank, which had been North Carolina National Bank. Both institutions have many branch applications at various stages in the OCC’s queue, including locations in the Southeast.

"The physical footprint will continue to be really important to us," said Holly O’Neill, president of retail banking at BofA, in discussing the bank’s branch expansion plans. "We know that when we go into an expansion market … where we have a financial center located within 15 miles of that new market, we drive 50% more in digital sales." O’Neill painted a picture of continual revision of BofA’s branch system, expanding into new markets and optimizing "in other markets where we’re heavily saturated."

"We expect we’ll open 100-ish financial centers every year," said O’Neill, speaking at the UBS Financial Services Conference in mid-February with analyst Erika Najarian. Expansion plans announced in mid-2023 included new presences in New Orleans, La., and Huntsville and Birmingham, Ala. Further plans announced in September 2024 included over 165 branches slated to be opened by the end of 2026. Recent approvals include new branches in Florida, North Carolina, South Carolina, Tennessee and Texas, as well as in Kentucky. In 2024 BofA began expanding in that state with its first two branches in Louisville, to be followed by more in that market in 2025.

The Changing Lay of the Land and the Strategy in the Southeast

Some of these players are newcomers or institutions from out of the region that are beefing up former toeholds because they like what they see and want to get their slice of the pie.

"The growth in Texas is phenomenal. If you had a choice to go there, or North Carolina or South Carolina, versus most other states, you’d choose those [three] states," said Stephen Steinour, chairman, president and CEO, at Huntington Bancshares, headquartered in Columbus, Ohio. He was speaking during the bank’s February investors day.

In September 2024, Huntington announced plans to add 55 branches in the Carolinas over five years. Initially the new branches will be established in Charlotte, Raleigh and Winston-Salem, N.C., and Charleston, Columbia, and Greenville, S.C. At present the bank is concentrating on commercial banking opportunities in Texas, rather than consumer branches. Thus far seven branch applications for the Carolinas have been approved or are in process at the Office of the Comptroller of the Currency. (The bank’s expansion plan also calls for 21 branches for Colorado and 25 for various states elsewhere.)

Huntington is projecting that bringing its entire menu of business, consumer and wealth management services to the Carolinas will increase deposits by $10 billion or more over the next decade, and raise loans by over $5 billion and assets under management by $5 billion in the same period.

There’s more activity yet.