Finance

JPMorgan Chase opens more small-town branches in middle America

Published

7 months ago

August 5, 2024

Three years ago, JPMorgan Chase became the first bank with a branch in all 48 contiguous states. Now, the firm is expanding, with the aim of reaching more Americans in smaller cities and towns.

JPMorgan recently announced a new goal within its multibillion-dollar branch expansion plan that ensures coverage is within an “accessible drive time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for Chairman 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 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 said in a statement.

He will also travel to Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. Across 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 in order for us 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 is traveling alongside Dimon across the Midwest for the bus tour.

Roberts said the goal is to reach “optimal branch share,” which in some newer markets amounts to “more than double” current levels.

At the bank’s investor day in May, Roberts said that the firm was targeting 15% deposit share and that extending the reach of bank branches is a key part of that strategy. She said 80 of the firm’s 220 basis points of deposit-share gain between 2019 and 2023 were from branches less than a decade old. In other words, almost 40% of those deposit share gains can be linked to investments in new physical branches.

In expanding its brick-and-mortar footprint, JPMorgan is bucking the broader banking industry trend of shuttering branches. Higher-for-longer interest rates have created industrywide headwinds due to funding costs, and banks have opted to reduce their branch footprint to offset some of the macro 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 Bank of America closed the highest net number of branches, while JPMorgan was the most active net opener.

According to FDIC research collated by KBW, growth in bank branches peaked right before the financial crisis, in 2007. KBW said this was due, in part, to banks assessing their own efficiencies and shuttering underperforming locations, as well as technological advances that allowed for online banking and remote deposit capture. This secular reckoning was exacerbated during the pandemic, when banks reported little change to operating capacity even when physical branches were closed temporarily, the report said.

But JPMorgan, the nation’s largest lender, raked in a record $50 billion in profit in 2023 – the most ever for a U.S. bank. As a result, the firm is in a unique position to spend on brick-and-mortar, while others are opting to be more prudent.

When it comes to prioritizing locations for new branches, 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 is a new corporate headquarters, a new suburb being built, or new roadways.

And even in smaller cities, foot traffic is a critical ingredient.

“I always joke and say, if there’s a Chick-fil-A there, we want to be there, too,” Roberts said. “Because Chick-fil-A’s, no matter where they go, are always successful and busy.”

Finance

DELL, ADSK, DUOL, NTAP & more

Published

12 hours ago

February 27, 2025

Business Finance News

Finance

Senators grill Trump CFPB pick, Jonathan McKernan: ‘Good luck’

Published

12 hours ago

February 27, 2025

Business Finance News

Jonathan McKernan, U.S. President Donald Trump’s nominee to be the director of the Consumer Financial Protection Bureau, sits on the day he testifies during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 27, 2025.

Annabelle Gordon | Reuters

President Donald Trump’s pick to lead the Consumer Financial Protection Bureau on Thursday withstood grilling from Democrat senators who repeatedly asked him to confirm that he would uphold his legal obligations to run the agency.

Pressed by senators including Elizabeth Warren of Massachusetts, Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, told lawmakers he would “fully and faithfully” enforce laws related to the CFPB’s mission.

“My legal career started just as the 2008 financial crisis was beginning,” McKernan said. “Watching that crisis unfold left me with an enduring conviction that we must have a financial regulatory system that works for everyday Americans. Consumer protection is critical to that end.”

Still, McKernan made it clear that he disagreed with how predecessor Rohit Chopra ran the agency. In opening remarks, he said that the CFPB “acted in a politicized manner,” exceeded its legal authority, hurt consumers by inadvertently raising prices and suffered from a “crisis of legitimacy.”

“This must be corrected if the CFPB is to reliably do what it’s supposed to do: look out for the American consumer,” said McKernan, a former corporate banking lawyer and Senate aide.

Since acting CFPB Director Russell Vought took over this month, the agency has shuttered its Washington headquarters, fired about 200 employees and told those who remain to stop nearly all work. Those moves, along with an allegation from a CFPB union that Vought intends to fire more than 95% of the agency’s staff, has spurred fears that the agency faces extinction.

Earlier Thursday, the CFPB dismissed at least four enforcement lawsuits, including actions against Capital One and a Berkshire Hathaway unit.

U.S. Sen. Elizabeth Warren (D-MA) speaks at a rally outside the Consumer Financial Protection Bureau (CFPB) on Feb. 10, 2025 in Washington, DC.

Anna Moneymaker | Getty Images

Warren pressed McKernan on if he would uphold CFPB’s statutory requirements, including having a website and toll-free line for consumer complaints, as well as maintaining advocacy offices for military veterans and senior citizens.

“Each of the offices I think you mentioned is mandated by statute,” McKernan said. “Yes, I’ll follow the law.”

Rattling off a list of public comments and steps made by the Trump administration that indicate the bureau could be shuttered entirely, Warren questioned how effective McKernan could be.

“It kind of feels like you’ve been lined up to be the No. 1 horse at the glue factory,” Warren said.

For his part, McKernan said that if confirmed by the Senate, he would “right-size” the CFPB, as well as “refocus it” and “make it accountable.”

Sen. Jack Reed, D.-R.I., followed up, adding that Vought has canceled the lease on the agency’s headquarters and dismissed cases against “predatory lenders.” Reed also mentioned reporting that both Trump and Vought, who is also head of the Office of Management and Budget, want to eliminate the bureau.

“You’re going to be placed in a very difficult position,” Reed said. “You do not appear to have much presidential support or OMB support, and I have this sinking feeling that you’re departing Liverpool on the Titanic. Good luck.”

McKernan didn’t verbally respond to Reed’s comment, only smiling ruefully while nodding slightly.