PNC Bank plans to more than double its bank branch openings over the next five years in recognition of the demand for physical stores despite growing favor for larger online operations.
Pittsburgh-based PNC is increasing its branch investment by $500 million to open more than 100 new banks and renovate 200 existing locations across the country. The updated plans expand on the 100 new locations and 1,200 branch renovations the company announced in February.
PNC’s branch opening strategy falls in line with some of the largest U.S. banks such as JPMorgan Chase and Bank of America. While customers have widely adopted mobile phones and computers for depositing and transferring funds, paying bills and applying for loans, the demand for branches has not gone away.
Bill Rogers, chairman and CEO of Truist Financial, recently pointed out the need for online access as well as physical locations in the wake of hurricanes that battered the Atlantic Coast.
“I think they're actually both really important as part of the overall process,” he told analysts on his bank holding company’s earnings conference call last month. “It never becomes more clear in something like we've experienced in the last few weeks in the storms. Our branches and our ATMs are the most important thing that those communities need at that time. They don't have access to digital, internet is down, power is down.”
Closings in decline
PNC’s decision does not mean an end to further branch closings but demonstrates how banks are adapting to their customers.
“Our overall branch strategy involves a continuous evaluation of our branch network and studying client and prospect transaction patterns to ensure we’re aligning with their needs,” a spokesman for PNC told CoStar News in an email. “Nationwide, we’ve expanded our branch presence in new states and geographies based on organic growth and our acquisition of BBVA USA. At the same time, we also make decisions to consolidate branches as transaction patterns decline and clients’ needs evolve.”
PNC acquired BBVA USA Bancshares in June 2021.
Nationally, bank branch closings have dropped off sharply since 2021 when more than 4,330 branches were shut down — the highest annual total on record, according to data from the Federal Deposit Insurance Corp. There have been 1,715 closings so far this year, putting the industry on track for fewer than 2,000 shuttered for the full year. That would be the first time since 2006 for that few closings.
Banks accelerated their branch closings in 2021 as the COVID-19 pandemic encouraged consumer adoption of mobile and digital channels, according to analysis by S&P Global. Banks also faced a tougher operating environment with low interest rates pressuring margins and forcing a reconsideration of expenses.
PNC has closed 73 branches in 2024 and opened nine, according to data from the Office of the Comptroller of the Currency. Pennsylvania and Texas each accounted for 12 of PNC’s closings this year.
That compares to 239 branch closings for PNC in 2023 and 29 openings. Maryland, New Jersey and Virginia accounted for 131 of the closings.
More brick-and-mortar stores
Other major banks too are working to expand their real estate footprints.
JPMorgan Chase said in February it was undertaking one of its most aggressive expansions in recent years, with plans to add more than 500 new U.S. locations by 2027.
In September, Bank of America said it was on track to open more than 165 new centers across 63 markets by the end of 2026, including nearly 40 this year. This is in addition to the more than 100 centers the company opened over the past two years.
“We are reaching more and more clients through the expansion and modernization of our financial centers,” Aron Levine, president of preferred banking at Bank of America, said in a statement. “While most clients are using our digital capabilities for their everyday banking, they are visiting our centers for in-person conversations about their more complex financial needs and advice on their life priorities and financial goals.”
Year to date, though, Wells Fargo has closed 45 branches and opened eight, according to OCC data. It has been more focused on refurbishment, having completed renovations on more than 460 branches during the first three quarters of this year, the bank holding company reported last month.
U.S. Bancorp's strategy is to create physical density within its current markets and grow deposits.
“Branches are very critical to our business strategy,” Gunjan Kedia, president of U.S. Bancorp, told analysts on a call last month. “We see deep client relationships anchored around the branch. It really drives brand recognition.”
US expansion
PNC’s announcement brings the bank's total planned branch investment to about $1.5 billion to open more than 200 new locations in 12 cities across the United States over the next five years while completing the renovations of 1,400 existing branches.
In addition to building new branches as previously announced in the Austin, Dallas, Houston and San Antonio markets in Texas, as well as in Denver and Miami, PNC will now significantly expand its branch network throughout Atlanta, Phoenix, Charlotte and Raleigh in North Carolina, and Orlando and Tampa in Florida.
PNC plans to meaningfully expand its number of new construction branches in Miami. Three of its new openings this year have been in that city, the most in any one market this year, according to the bank.
"While wany oner our clients a variety of different ways to interact with us, our branches continue to be the heartbeat of our retail franchise," Alex Overstrom, head of retail banking at PNC, said in a statement.