B of A to start closing suburban branches

[JohnMcKee]

Bank of America Closing Branches You Never Went to Anyway

by John Paczkowski
Posted on July 28, 2009 at 11:01 AM PT

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bofaRemember the last time you set foot in a real brick-and-mortar bank? Me either. And we’re not the only ones. With more and more people managing their financial affairs via PC and mobile device, a bank’s retail presence no longer need be as ubiquitous as it once was.

The latest institution to realize this–Bank of America (BAC) which, according to The Wall Street Journal, plans to close up to 10 percent of its 6,100 branches across the country over the next three-to-five years. It’s not yet known when the closures will begin or exactly how many locations will be closed. BofA says only that “Our vision is the network will be managed downward over time.”

About time too. With fewer and fewer consumers banking at their local branches and remote deposit capture an easy matter via ATM, it seems foolhardy to maintain them.

“They are not economically viable,” Rochdale Securities analyst Dick Bove wrote in a recent note to clients. “The branches are likely to be closed for three reasons: a) branch economics are changing; b) the need for positioning has been reduced; and c) the fear of regulation suggests closing branches now makes sense.

“When America was building new houses in the millions,” Bove continues, “it was creating new neighborhoods. Banks competed with each other to get branches into the new communities in the choicest locations. Branches were often built in supposed choice locations just to keep the competitors out. This strategy has now been abandoned. Many of the new communities have been abandoned. These branches need to be abandoned.”

I thought that last quote was particularly telling about the communities being abandoned and banks needing to abandon them as well. I wonder how many other retailers that moved into these communities see the same need to abandon them as well. Could the people that managed to hold on to their suburban tract homes soon find them not only abandoned by the neighbors but the services that make living in the suburbs possible in the first place?

[CasperITL]

BOA's are pretty busy here in Dallas. I could not see them closing too many, save for one. There is a branch tucked inside of an office building across the street from the "Hole on Cole". Corner of Lemmon and Carlisle.

http://maps.google.com/maps?hl=en&ie...41.28,,0,-13.9

I'm not sure anyone ever steps foot in that place.

Other than that branch, the BOA's stay busy.

[mjblazin]

Mr. Bove knows a lot about banking. He does not know anymore about communities than anyone else. The amount of volume supported by existing branches franchise wide was too low to support existing number. When volume returns and increases beyond previous highs, the feeling is that it will increasingly return as mobile/electronic banking. Consequently no need exists to keep in place existing infrastructure and it's time to prune. Consequently it's as much a decision on how to serve future growth as it is on where growth would occur.

Also, as Mr. Bove noted, some counter-competitive actions occurred during boom that probably never did not have a long term future. It's also the right time to prune those sites.

No one, people or banks, is abandoning any communities.

[palchik]

No one, people or banks, is abandoning any communities.

I beg to differ:

http://www.nytimes.com/2009/04/22/business/22flint.html

[jsoto3]

BoA already shut down their downtown branch at Elm Place a few weeks ago.

[darkblood]

BoA already shut down their downtown branch at Elm Place a few weeks ago.

That makes sense as it was only 2 blocks away from their branch in the Bank of America building.

[Mena]

I heard through the grapevine that BofA in the Elm location was at the end of their lease. I don't have confirmation on this though. The first 8 floors of that building is in foreclosure....again....this is through the grapevine. There is also talk about making that building partly residential but asbestos is involved so it would be a heavy financial undertaking to accomplish an integration of residential units.....again...unconfirmed.

[CasperITL]

BoA already shut down their downtown branch at Elm Place a few weeks ago.

They also had a BOA location in One Energy, that is now closed.

[aygriffith]

Because the BOA branch is so conveniently located in the basement of the BOA Tower... I think that was a poor choice that has let Chase own the downtown business if you need an actual branch.

I wish Citi and BOA would both open a branch somewhere more centrally located to Main and the Eastern end of DTD. There's more of us down there than on the West end of DTD.

[LongonBigD]

They tore down that strip center at Lemmon & Inwood with the great Sigel's sign (wish it would have been relocated to Fitzhugh & Cole - but at least it was saved and relocated to Addison) in order to put up........

a Bank of America branch. Ughh.

How long until this one is on the 'to be closed' list? I know, I know - too many banks is old news (how many Chase/WaMu's can you get along Lemmon?) in addition to the Wells/Wachovia marriage. But, why not refit one of those?

Don't get me wrong, I think Lemmon Ave is long overdue for the facelift that it's currently under-going, but there are so many other sites in that area that could have come down (empty restaurants, old pawn shops, etc).

[totheskies]

IMO this makes a lot of sense, if they do it right.

Many times, banks like BOA will have several location in a large suburb, when they only have the customer traffic to sustain one or maybe two (on opposite ends of town. But there's no need to have a bank branch on every third street corner anymore.

You also have to remember that BOA has one of the nation's largest ATM networks... you see more BOA ATMs than any other major bank... malls, gas stations, outside kiosks you name it... chances are it's either a BOA ATM, or some weird finance group you've never heard of. I WISH Wells Fargo had half the number of ATMs as BOA (though the merger with Wachovia has helped a bit).

[NThomas]

IMO this makes a lot of sense, if they do it right.

Many times, banks like BOA will have several location in a large suburb, when they only have the customer traffic to sustain one or maybe two (on opposite ends of town. But there's no need to have a bank branch on every third street corner anymore.

You also have to remember that BOA has one of the nation's largest ATM networks... you see more BOA ATMs than any other major bank... malls, gas stations, outside kiosks you name it... chances are it's either a BOA ATM, or some weird finance group you've never heard of. I WISH Wells Fargo had half the number of ATMs as BOA (though the merger with Wachovia has helped a bit).

With all the bank mergers and consolidations recently, there's no way the megas could keep open all the merged branches even with their own excess pre-merger.

With the newer technology "uberATMs" have like check scanning and real time cash deposits, we're on the verge of MEGA-banks becoming faceless entities.

Local credit unions and smaller banks should capitalize on what the megas aren't focusing on and go straight for the jugular, customer service. Even though I enjoy being able to use an ATM almost anywhere, bank online, and reorder checks via text messaging, being able to see a another person's face and get that free bag of popcorn on Friday, adds the human touch even the new uberATMs can never replace.