PNC Bank on Friday announced a $500 million plan to open more than 200 new branches in a dozen metro areas, including about 25 that will open in metro Atlanta over the next five years.
The announcement comes as the banking industry at large has been closing branches to save money as more transactions move into cyberspace and swipes of credit and debit cards. The number of bank branches in Georgia has declined by 20% in the past 10 years to about 2,000, according to data from the Federal Deposit Insurance Corp.
Despite the trend, PNC says client demand justifies the expansion in brick-and-mortar.
“They are showing us with their feet,” said Jeff Martinez, head of branch banking at the Pittsburgh-based bank.
Digital is still the daily vehicle for “the easy things,” but when customers have a larger question, a need for advice or discussion about a high-stakes financial decision, face-to-face is best, he said.
“It’s not the frequency, it’s the potency of in-person,” Martinez said. “You’re going to purchase a car. You’re going to purchase a home or you want to know how best to save for buying a home. Or you’re about to retire.”
David Oliver, executive vice president of the Georgia Bankers Association, said he has seen a steady trickle of banks opening new branches, including Columbus-based Synovus, Citizens Bank of Swainsboro and Pinnacle Bank of Elberton.
“This large announcement by PNC is a little bit unique,” he said. “But the value of the (in-person) banks has moved away from day-to-day transactions to consultative and advisory places.”
PNC currently has about 50 branch locations in metro Atlanta.
Nationally, Pittsburgh-based PNC Bank has the fourth-largest network, more than 2,200 branches, according to the company.
PNC has had a foothold in metro Atlanta since 2012, starting with acquisitions of RBC Bank and the branches of Flagstar Bank.
It is now the 12th largest bank in metro Atlanta by deposits, according to data from the FDIC. As of June 30, the latest data available, with more than $4.1 billion in customer deposits.
Because PNC is a relatively new player in the Atlanta market with only a modest share of the business, the ability to make an investment on new branches can pay off, Martinez said.
“It may seem that we are bucking the trend,” he said. “We have about 2% share of the deposits in metro Atlanta. But we know by doubling down in the community, we can quickly accelerate that.”
FDIC data show the top banks in the region are Truist with $51.8 billion in deposits and 132 branches; Bank of America with $48.1 billion in deposits and 103 branches; and Wells Fargo with $38.7 billion and 130 branches.
For years, particularly since the Great Recession and the rise of digital banking, financial institutions have been cutting both the size and number of branches to save money. Customers simply do not bank as they used to, ditching checks for debit and credit card swipes and payment apps like Zelle, Venmo and PayPal.
The rise of these tools mean customers don’t go to branches for assistance like they used to. Branches now are often conduits for selling loans and banking and investment services.
Accordingly, in recent years, the number of branches has shrunk.
As of June, there were 2,008 bank branches in Georgia, according to the FDIC. That compares to more than 2,526 in 2014.
Analyst Alexander Yokum of financial investment research firm CFRA said there is likely to be more competition as time goes on.
Spending so much money could crimp profits in the short-term, but PNC’s expansion is a good move, he said. “We expect the bank to benefit from economies of scale in the longer-term.”
