JPMorgan Chase said on Wednesday that it plans to open its first branches in Charlotte, a major announcement in a city that has long been dominated by financial giants Bank of America and Wells Fargo.
JPMorgan, the largest U.S. bank by assets, has not disclosed the number of branches and automated teller machines or their addresses but said they are expected to open by the end of this year.
So the initial impact on Charlotte’s big banks is unclear. But the move brings more competition for Charlotte-based Bank of America and San Francisco-based Wells Fargo. Combined, those two banks hold more than 89 percent of the deposits in the region, according to the latest FDIC data.
The rivalry between the three banks will be intense as they compete for customers and employees in Charlotte, said Bert Ely, an Alexandria, Va.-based banking consultant.
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“They’ll be slugging it out,” he said. “It’s going to make for a more competitive bank environment.”
JPMorgan’s move is part of a plan to give the New York-based firm its first branches in North Carolina as it looks to expand its branch network across the U.S. over the next five or so years. JPMorgan also plans to open branches in the Raleigh and Greenville, S.C., areas this year as part of the push, it announced on Wednesday.
For Charlotte, the branches will expand the presence JPMorgan has had in the region for about the past 14 years, said Matt Moore, who is based in Charlotte and oversees the bank’s private bank operations in the Carolinas.
JPMorgan said it employs about 100 people in Charlotte across its private bank, commercial banking and treasury operations. The addition of branches will help the bank better serve its clients in the region, Moore said, and round out the offerings to those customers.
“Charlotte is a great market for us, there’s no questions about it,” Moore said. “We just think that this is a market that we need to be in. This is clearly a growing city with a large deposit base that we can serve if we have a branch network in place.”
The move will give customers in Charlotte another bank to choose from, helping to reverse a shrinkage in the number of banks serving the region over the past decade or so. Last year, 40 banks were operating in the market, down more than 28 percent compared to 2008, according to the Federal Deposit Insurance Corporation.
And Charlotte will lose another name when BB&T and SunTrust Banks merge under a deal announced last month.
The arrival of JPMorgan branches in Charlotte comes after CEO Jamie Dimon told the Observer in 2017 that he did not rule out the possiblity of the bank putting branches in Charlotte.
“Not yet,” Dimon said at the time. “But I think it’s not unreasonable sometime in the future.”
Wednesday’s plans were part of an announcement made the same day in which JPMorgan said it is expanding its branches into nine new U.S. markets, including Charlotte, Greenville and Raleigh.
The others are in Kansas, Minnesota, Tennessee, Pennsylvania, Rhode Island and Missouri. Under the initiative, JPMorgan plans to open about 90 total branches in the nine markets, hiring up to 700 people by the end of the year.
In Charlotte, entry-level workers at the branches will be paid a minimum of $15 an hour, the bank said. Those employees will also receive JPMorgan’s full benefits package, which is valued at $12,000 on average per employee and includes health care and retirement savings, according to the bank.
In a statement, Thasunda Duckett, CEO of Chase’s consumer banking operations, called Wednesday’s expansion a major milestone for the company that will allow it to serve more customers, small businesses and communities across the U.S.
Ely, the banking consultant, said that while customers in Charlotte can already bank with JPMorgan online, the addition of branches means more competition on the ground in the region. By establishing branches, JPMorgan will be better equipped to market itself in the area and branch workers can be used to bring in business, he said.
“Branches, shall we say, intensify the presence of a bank,” Ely said. “It’s one thing to have an electronic presence. But there’s lot of pluses to having that physical presence.”
For community banks in Charlotte, the arrival of JPMorgan branches will likely make it harder for them to be profitable a time when they are already competing with Bank of America and Wells Fargo, Ely said.
“The community banks will face a challenge,” he said. “Here you got three large players that are going to be competing very aggressively.”
Branches still popular
JPMorgan’s expansion comes when many banks are reporting falling demand for branches as more of their customers bank on their phones and foot traffic to branches falls.
Despite such trends, some banks continue to add branches in key markets where they don’t have any, as a way to further serve clients to whom they are offering other services.
Bank of America, for example, said last year that it planned to hire more than 5,400 people as part of a strategy to open more than 500 branches nationwide and refurbish older locations.
Two-thirds of JPMorgan’s retail customers visit a branch at an average rate of four times per quarter, Moore said. For younger customers, such as millennials, the average is about three times a quarter, he said.
While some customers might not use branches for basic transactions, they still rely on them for other services, such as retirement planning or advice about obtaining a mortgage, he said.
Moore said Wednesday’s announcement is part of a larger plan JPMorgan announced in January last year to open up to 400 Chase branches in new cities and states over a five-year period.
More coming to Charlotte?
Wednesday’s move adds to a presence JPMorgan has been steadily building in Charlotte for years.
That began back about 14 years, when the bank entered the market with corporate banking operations, Moore said. About six years ago, it added commercial banking operations, and about two years ago it put private bank services in Charlotte, he said.
In October, the bank consolidated its private bank and commercial banking operations scattered in Charlotte to offices in SouthPark. Previously, operations had been in Hearst Tower in uptown and on Fairview Road, the bank said.
The private bank and commercial banking operations plan to continue expanding in Charlotte, the bank said in October.
Moore said this week that he also expects JPMorgan to continue to grow its presence in Charlotte. He also said it’s likely the bank will step up its philanthropic efforts in the region as it expands.
“Charlotte can expect to see that from JPMorgan Chase as we now bring our retail branches into the market,” he said.
Last year, the company invested more than $800,000 in Charlotte nonprofits to support workforce development, he said.