JPMorgan Chase is opening more branches in small towns across Central America

Three years ago, JPMorgan Chase became the first bank to have a branch in all 48 contiguous states. Now the company is expanding, with the goal of reaching more Americans in smaller cities and towns

JPMorgan recently announced a new goal within its company multi-billion dollar branch expansion plan that guarantees coverage within an “accessible driving time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for Chairman and CEO Jamie Dimon as he begins his 14th annual bus tour on Monday.

Dimon’s first stop will be in Iowa, where the bank plans to open another 25 branches by 2030.

“From promoting community development to helping small businesses and teaching financial management skills and tools, we strive to extend the full power of the company to all the communities we serve,” Dimon said in a statement.

He also travels to Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. In these six states, the bank plans to open more than 125 new branches, said Jennifer Roberts, CEO of Chase Consumer Banking.

“We are still at a very low branch share, and we know that if we really want to optimize our investments in these communities, we need to have a higher branch share,” Roberts said in an interview with CNBC. Roberts travels through the Midwest with Dimon for the bus tour.

Roberts said the goal is to achieve “optimal industry share,” which in some newer markets amounts to “more than double” current levels.

At the bank’s investor day in May, Roberts said the company was targeting a 15% deposit share and that expanding the reach of bank branches is a key part of that strategy. She said 80 of the 220 basis points of deposit stock gains between 2019 and 2023 came from branches that were less than a decade old. In other words, nearly 40% of these deposit stock gains can be tied to investments in new brick-and-mortar industries

By expanding its physical footprint, JPMorgan is bucking the broader banking industry trend of branch closures. Higher interest rates have created industry-wide headwinds due to funding costs, and banks have opted to shrink their industry footprint to offset some of the macro pressures.

In the first quarter, the US banking sector recorded a net 229 branch closures, compared to just 59 in the previous quarter, according to figures S&P Global market information data. Wells Fargo And bank of America closed the highest net number of branches, while JPMorgan was the most active net opener

According to FDIC research collected by KBW, bank branch growth peaked just before the financial crisis, in 2007. KBW said this was partly due to banks assessing their own efficiency and deciding on underperforming locations, as well as technological advances which allowed online banking and remote deposit recording. This secular reckoning was exacerbated during the pandemic, when banks reported little change in operating capacity even as physical branches were temporarily closed, the report said.

But JPMorgan, the nation’s largest lender, raked in a record profit of $50 billion in 2023 — the highest ever for a U.S. bank. As a result, the company is in a unique position to spend money on brick-and-mortar operations while others choose to be more cautious.

When it comes to prioritizing locations for new branches, Roberts says it’s a “balance of art and science.” She said the bank looks at factors such as population growth, the number of small businesses in the community, whether there is a new headquarters, a new suburb being built or new roads.

And even in smaller cities, foot traffic is a crucial ingredient

“I always joke and say, if there’s a Chick-fil-A, we want to be there,” Roberts said. “Because wherever they go, Chick-fil-A’s are always successful and busy.”