JPMorgan Chase Expands Branches to Reach More Americans in Smaller Cities and Towns

JPMorgan Chase, the first bank to have branches in all 48 contiguous states, is expanding its reach to smaller cities and towns across the United States. The firm recently announced a new goal as part of its multibillion-dollar branch expansion plan to ensure that half the population in the lower 48 states can reach a branch within an “accessible drive time.” To achieve this, JPMorgan plans to open new locations in less densely populated areas.

Chairman and CEO Jamie Dimon is leading the charge, embarking on his 14th annual bus tour to visit these communities. His first stop is in Iowa, where the bank plans to open 25 more branches by 2030. Dimon stated, “From promoting community development to helping small businesses and teaching financial management skills and tools, we strive to extend the full force of the firm to all of the communities we serve.”

Dimon will also be visiting Minnesota, Nebraska, Missouri, Kansas, and Arkansas during the tour. Across these six states, the bank has plans to open over 125 new branches. Jennifer Roberts, CEO of Chase Consumer Banking, explained that the bank aims to achieve an “optimal branch share” in these markets, which would mean more than doubling the current branch levels.

During the bank’s investor day in May, Roberts emphasized the importance of extending the reach of bank branches to achieve a 15% deposit share. She revealed that 80 basis points of the firm’s deposit-share gain between 2019 and 2023 came from branches less than a decade old. This highlights the significance of investments in new physical branches, which accounted for almost 40% of the deposit share gains.

While many banks have been closing branches due to funding costs and macro pressures, JPMorgan has been actively opening new branches. In the first quarter, the U.S. banking industry recorded 229 net branch closings, with Wells Fargo and Bank of America leading the closures. JPMorgan, on the other hand, was the most active net opener of branches.

The growth in bank branches reached its peak in 2007, just before the financial crisis, according to FDIC research. This was partly due to banks reassessing their efficiencies and closing underperforming locations, as well as advancements in online banking and remote deposit capture. The pandemic further accelerated this trend, as banks reported little change to operating capacity even when physical branches were temporarily closed.

However, JPMorgan’s record-breaking $50 billion profit in 2023 sets it apart from other banks and allows it to invest in brick-and-mortar expansion. When selecting locations for new branches, the bank considers factors such as population growth, the number of small businesses, new corporate headquarters, new suburbs, and roadways. Additionally, foot traffic plays a vital role, with Roberts jokingly stating that if there’s a Chick-fil-A in a city, they want to be there too because Chick-fil-A locations are always successful and busy.

In conclusion, JPMorgan Chase is defying industry trends by opening new branches to reach more Americans in smaller cities and towns. With a focus on community development and serving small businesses, the bank aims to extend its presence and financial services to all communities. By investing in brick-and-mortar expansion, JPMorgan is positioning itself for continued growth and success in the banking industry.