Three years ago, J.P. Morgan Chase It became the first bank to have a branch in all 48 contiguous states. Now, the company is expanding to reach more Americans in smaller cities and towns.
JPMorgan recently announced a new goal in its multibillion-dollar branch expansion plan, which is to provide “accessible driving time” to half the population in the lower 48 states. That requires new locations in less populated areas — something Chairman and CEO Jamie Dimon is focusing on as he embarks on his 14th annual bus tour on Monday.
Dimon's first stop will be in Iowa, where the bank plans to open 25 additional branches by 2030.
“From promoting 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.
It will also visit Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. In those six states, the bank plans to open more than 125 new branches, according to Jennifer Roberts, Chase’s chief consumer banking officer.
“We’re still at a very low single-digit branch share, and we know that in order to really optimize our investments in these communities, we need to be at a higher branch share,” Roberts said in an interview with CNBC, where he and Dimon are traveling through the Midwest on the bus tour.
The goal is to reach an “optimal branch share,” which in some newer markets is “more than double” current levels, Roberts said.
At the bank’s investor day in May, Roberts said the company was targeting a 15% share of deposits and that branch expansion was a key part of that strategy. She said 80% of the 220 basis points of deposit share gains the company made between 2019 and 2023 were from branches that were less than a decade old. In other words, roughly 40% of that deposit share gain could be tied to investments in new physical branches.
By expanding its presence in brick-and-mortar stores, JPMorgan is bucking a broader banking industry trend of closing branches. Higher interest rates for longer periods have created industry-wide headwinds due to funding costs, and banks have opted to shrink their branches to offset some of the overall pressure.
In the first quarter, the U.S. banking sector recorded 229 net branch closures, compared with just 59 in the previous quarter, according to data from S&P Global Market Intelligence. Wells Fargo And American bank It closed the largest number of net branches, while JPMorgan Chase was the most active in net openings.
According to research by the Federal Deposit Insurance Corporation (FDIC) and compiled by KBW, growth in bank branches peaked just before the financial crisis in 2007. KBW said this was due in part to banks assessing their efficiencies and closing underperforming locations, as well as technological advances that allowed for online banking and remote deposit taking. This secular calculation was exacerbated during the pandemic, the report said, when banks reported little change in operating capacity even as physical branches were temporarily closed.
But JPMorgan, the nation’s largest lender, posted a record $50 billion in profits in 2023 — the highest ever for a U.S. bank. As a result, the company is uniquely positioned to spend on physical assets, while other banks have chosen to be more cautious.
When it comes to prioritizing new branch locations, Roberts said it’s a “balance of art and science.” She said the bank looks at factors such as population growth, the number of small businesses in the community, whether there’s a new corporate headquarters, a new suburb under construction or new roads.
Even in small towns, pedestrian traffic is essential.
“I always joke, ‘If there’s a Chick-fil-A there, we want to be there, too,’” Roberts said. “Because Chick-fil-A, wherever you go, is always a hit and always busy.”
