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Jax Daily Record Monday, Oct. 25, 202105:10 AM EST

Banking: Shrinking branches doesn’t mean shrinking deposits

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As more work is done online, footprints shrink.
by: Mark Basch Contributing Writer

Florida Capital Bank, one of only two commercial banks headquartered in Jacksonville, always has operated with a minimal number of offices.

But the bank’s footprint has become even smaller in recent years.

“Four or five years ago, we decided we needed to downsize our branches,” said Stew Baker, Florida Capital managing director, banking.

The bank went from eight branches in 2015 to five today, including its headquarters office. Besides a Jacksonville branch, it has one each in Gainesville, Tampa and Orlando.

It did not hurt business. While the branch network did shrink, deposits nearly doubled from $132 million in mid-2015 to $245 million as of June 30, 2021.

As a bank that deals mainly with businesses, as opposed to consumers, Florida Capital does not need brick-and-mortar offices to serve most of its customers.

“We don’t have any drive-thrus. We don’t have any ATMs,” said Baker.

“Our mantra is we bring the bank to you.”

However, with more and more consumers doing business online, other banks could be following Florida Capital’s mantra and downsize their branch networks.

“We were a little ahead of the game,” Baker said.

The number of bank branches in the Jacksonville market has been shrinking gradually in recent years. 

There were 245 offices among the 31 banks with branches in the metropolitan area of Baker, Clay, Duval, Nassau and St. Johns counties as of June 30, down from 317 five years earlier.

Some of that is due to continued consolidation in the banking industry, as mergers eliminated six banks in the market since 2016.

For example, SunTrust Bank and BB&T merged in late 2019 into Truist Bank, and the combined bank has closed some offices.

The merged bank closed six branches in the Jacksonville market this year and intends to close one of its remaining 27 offices in 2022.

“As a result of the merger, there’s quite a bit of redundancy between many BB&T and SunTrust branches,” a Truist spokeswoman said by email.

“In many cases, there’s a branch available for clients just a few minutes away. All teammates from redundant branches are transferred to nearby locations, so there are no job losses.”

Truist does have data showing more customers are banking online. It said clients active on mobile applications grew by 11% from the second quarter of 2020 to the second quarter of 2021 and mobile check deposits rose by 26%.

Bank of America, the largest bank in the Jacksonville market with $50.5 billion in deposits credited to area branches, said in an emailed statement that 90% of customers interact with the bank digitally, with Jacksonville showing particularly strong digital adoption in the past 20 months.

Although customers use branches less frequently for their general banking needs, banks said there will continue to be a role for offices in the digital world.

“Many times customers walk into a branch to talk to a banker about a complex financial need or a life milestone like home buying,” said an emailed statement from Wells Fargo Bank, the largest institution in terms of branches in the Jacksonville market with 42.

“In the future we believe the branch visit will be even more about the relationship where customers engage in financial checkups with bankers to create and fine-tune long-term financial plans,” it said.

The other institution headquartered in Jacksonville, TIAA Bank, is different from other banks because most of its business is done online with customers across the country. 

But TIAA does have a handful of branch offices that customers find useful, said Scott Verlander, head of retail and affiliate banking.

“Many of our clients in Florida like to use our financial centers for more complex banking activities and use our digital channels for repetitive-service activities,” Verlander said.

“The pandemic clearly expedited the increase in our clients utilizing our digital channels more frequently.  But our clients continue to emphasize how much they appreciate an engaged relationship with their financial center bankers,” he said.

The COVID-19 pandemic has changed branch operations for most banks, with a greater focus on health and safety. 

Verlander said the pandemic also has changed the role for some TIAA employees.

“During the pandemic, we’ve trained our financial center employees to perform other activities outside of traditional branch activities – such as trust administration and deposit operations – to ensure we’re as productive and efficient as possible as a banking organization,” he said.

Some bank offices remain closed temporarily during the pandemic but are not shut permanently.

Bank of America has three offices closed in the Jacksonville area, including its branch in the Downtown Bank of America Tower at 50 N. Laura St. All three are expected to reopen by the end of the year.

“When a Financial Center temporarily closes, we work to reopen it as soon as possible,” Bank of America said.

“We appreciate our clients’ understanding and flexibility during these unprecedented times.”

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