More banks keep branches open during latest coronavirus wave
The rise of the coronavirus last spring prompted an almost universal response from U.S. banks: shutting down branch lobbies to the public, limiting in-person activities to appointments only, redirecting most customers to drive-thru and, in situations where there were no safe ways to operate, close the entire branch.
This time it’s different.
Many large banks and regional banks are avoiding wide shutdowns amid the surge in COVID-19 cases in late fall. Instead, they assess the situation on a branch-by-branch basis and rely on security protocols instituted in the spring to keep the virus at bay – and keep branches open.
None of the country’s four mega-banks have announced massive branch closings. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo each say they are trying to keep as many sites open as possible and shut them down individually if there is a reason for branch staff to quarantine themselves.
However, it was a feeling of déjà vu in some small banks as they shut down lobbies at all levels and return to appointment only and drive-thru access that got them through the first wave of the pandemic.
The diversion of approach has a lot to do with the fact that many small communities have become hot spots now that the United States has reached 12.3 million confirmed cases. Decisions will be largely individual, based on COVID-19 infection rates in specific markets and various national and local enforcement actions, said Ryan Myers, senior director of Cornerstone Advisors.
“I think community banks will respond to their communities more frequently, while larger organizations will try to deal with things more holistically,” Myers said.
One of those community banks is Customers Bancorp in West Reading, Pa., Which announced on Friday that its 13 branches would only resume appointments.
“As you can see this week, states are tightening, so we’re definitely tightening,” said Jim Collins, chief executive of the company with $ 18.8 billion in assets.
The largest banks in the country are touting the implementation of agency security measures put in place last spring: mask warrants, social distancing signage and the installation of plexiglass to separate employees from customers.
At Citigroup, around 16% of branches remain temporarily closed, up from a peak of around 40% in March, and no further closings are planned, a spokesperson said. In fact, this week the New York-based bank plans to reopen seven branches in California where positivity rates are low.
In Wells Fargo, about 25% of branches were closed when the pandemic started, a spokeswoman said. Today, around 15% of branches remain closed, including some whose layout is too small to allow good social distancing and those without windows behind the wheel.
But that doesn’t mean that there won’t be changes if circumstances turn in the wrong direction.
“We are continually reassessing as the situation evolves and can make adjustments if necessary, with the safety of our employees and customers being our top priority,” said the spokesperson.
US Bancorp in Minneapolis takes a similar approach. Due to a slight increase in cases in parts of the country, including Chicago and Tennessee, the company with $ 536.9 billion in assets has again closed branches or lobbies and returned to drive-thru only. , said a spokesperson. The bank temporarily closed 500 branches in March.
The spokesperson could not say how many are closed now.
The Citizens Financial Group of Providence, RI, kept its branches open during the pandemic, but adopted a three-phase system for its branches, a spokesperson said. The company’s branches with $ 179 billion in assets are operating in “phase 2,” which means lobbies are open, but the number of customers allowed in at any one time is limited. “Phase 1” involves reduced hours and lobby access by appointment only, while “Phase 3” proceeds as usual.
The company has also installed plastic-glass barriers and demands social distancing at branches.
“We have worked closely with all the states where we operate to meet all their demands, continue to closely monitor the situation and will make the necessary adjustments,” the spokesperson said.
At this time, M&T Bank in Buffalo, NY, is not adjusting its branch operations, which span from New York to Virginia. A spokesperson for the company with $ 138.6 billion in assets – headquartered in western New York City, where the seven-day average positivity rate (5.11% Monday) is highest high among 10 regions in the state – said the company is “prepared to make temporary changes on a market specific basis based on local conditions.”
At the same time, the spokesperson said, customers continue to use virtual dating capabilities, which were launched across the company in the spring, and upgrades have been made to digital offerings. Loan applications, for example, can now be handled over the phone.
In April, Union Bank in California temporarily closed about 50 branches, or about one in six branches it operates. Many of the bank’s remaining branches operate on shortened schedules of 30 hours per week. A spokeswoman for the $ 136 billion asset bank said she did not plan any further adjustments at this time.
“In the beginning, we implemented many preventative health and safety measures to prevent the spread of the virus, and we have maintained these high standards for the past nine months,” she said in a E-mail.
Smaller banks usually report more drastic actions, although some try to tailor their moves.
The Reading Cooperative Bank of Massachusetts, with $ 640 million in assets, said it will move lobby access to dates only for the two weeks following Thanksgiving and Christmas and expects to resume operations normal on December 14 and January 11, unless cases increase.
Meanwhile, Northwest Bank in Warren, Pa., With $ 13.8 billion in assets, closed branch lobbies on Monday and switched to the indefinitely-only walk-in and drive-thru model, citing the growing number of COVID-19 cases in its four-state footprint. On the same day, Five Star Bank, a $ 5 billion asset bank based in Warsaw, New York, closed three of the four branches it operates in the Buffalo Market.
Five-star executive director Sean Willett said the bank temporarily closed all but two of its 50-branch network branches in March, but reopened them over the summer except for six which will be permanently closed due to a long-term consolidation plan.
Instead of widespread closings, the bank now examines market by market to determine if any branches should close. A few weeks ago, it temporarily closed halls in other parts of its footprint where peaks were occurring.
Five Star plans to limit access to the lobby for at least two weeks to avoid a “yo-yo” situation, Willett said.
“We try to be very transparent about this and with the associates so that they know how we are handling this particular event,” he said.
The Consumers Bankers Association said the number of closed halls appear to be “isolated” across the industry, with those in metropolitan areas often limited to places where another branch is nearby. Spokesman Nick Simpson said, based on conversations with banks, most are fully open or have only a handful of closings.
“Each bank decides what is best for its network, but the overwhelming majority of branches are open,” he said. “Institutions continue to monitor local conditions and some are making or considering slight adjustments to hours or switching to drive-thru models only due to cleaning of facilities or staff shortages resulting from quarantines.”
Overall, banks of all sizes have adapted to operate in the COVID-19 environment, said LT (Tom) Hall, founder and CEO of Resurgent Performance, a banking advisory firm near Atlanta. But there will be changes in the branch model that will persist after the pandemic.
In fact, he predicts that 10-15% of bank branches will close permanently next year. In September, PNC Financial Services CEO William Demchak said the Pittsburgh-based company was in the process of closing nearly 160 branches this year and another 120 next year. KeyCorp in Cleveland is also planning branch closures in 2021 while US Bancorp said it close another 15%, or about 400, of its branches in early 2021.
“This increase, I think, will serve as an additional catalyst to underscore the need for many banks to look at branches and costs and decide how they’re going to operate,” Hall said. “For some, they will lose branch traffic and they will have to reinvent themselves and be more digital and do a better job of marketing and managing their costs.”