Bank of America did something last week it hasn’t done in more than a decade: It celebrated the opening of a branch in a new market.
On Wednesday, the Charlotte bank cut the ribbon on a branch in Denver, Colo., its first in that state. More branches will open in Colorado later this year, the bank says.
In addition, the bank plans to open its first branch in Minnesota during the second quarter. That branch will go in Minneapolis and be followed by other branches the bank plans to open in the Minneapolis-St. Paul area over the next two years.
Bank of America says the Denver branch marks the first time the bank has ventured into a new market with a branch since 2003, when it opened one in Chicago. The move comes even as it rapidly closes branches in other U.S. markets.
The entry into Colorado and Minnesota illustrates CEO Brian Moynihan’s push for branches in major metropolitan areas where Bank of America is already serving affluent customers and businesses through its U.S. Trust and Merrill Lynch businesses and other operations.
“We’ll go to other markets largely just to complete the footprint,” Moynihan said in December. The bank says it does not have branches in three of the top 30 U.S. markets. Those markets are Pittsburgh, Cincinnati and Cleveland. “You’ve got to complete the franchise,” Moynihan said.
The decision comes as Moynihan, under pressure to boost the bank’s profits, is trying to get more business out of the bank’s affluent customers. Giving U.S. Trust and Merrill Lynch clients in Colorado and Minnesota access to branches can allow the bank to win checking and savings accounts from them, as well as sell them additional products and services.
Ken Thomas, a Miami-based bank consultant, said Bank of America’s entry into new markets illustrates how its financial situation has improved since the financial crisis. The new branches show Bank of America is “out of intensive care,” he said. “They’re getting back to normal.”
The addition of Colorado and Minnesota gives Bank of America branches in 34 states and Washington, D.C. — the most since its 2007 purchase of Chicago’s LaSalle Bank, the bank said.
The new branches follow other steps Bank of America has recently taken to boost its business with affluent clients. Just last year, for example, the bank rolled out a new rewards program for those customers.
Even as it opens new branches, Bank of America has been reducing branches elsewhere. Like some other lenders, Bank of America has pared its branch network as more customers conduct routine transactions on their computers and phones.
“We’ll be opening branches where we need them. We’ll be closing branches where the customers don’t need them,” Moynihan said. “We open 60, 70, 100 branches a year.”
Through Dec. 19, Bank of America’s branch count fell last year by more than 170 locations, more than any other U.S. bank, according to data firm SNL Financial. As of the end of last year, Bank of America had 4,855 branches, a decline of more than 1,200 from the end of 2007.
Even as the bank enters new states with branches, it has exited others. In 2013, it sold its remaining branches in Indiana to Old National Bancorp, lowering the number of states in which Bank of America had branches from 33 to 32.