If recent data is any indication of the future of bank branches in Connecticut, there will be fewer operating across the state. But the industry is not totally moving away from their brick-and-mortar roots.
Connecticut banks shuttered 25 branches in the past 12 months, but opened 16 new offices, leaving the state with nine fewer banking centers than it had a year ago, according to Virginia research firm SNL Financial.
Bank of America, by far Connecticut’s largest lender by market share, closed eight branches in the state, all within the last four months, as the Charlotte-based lender continues to restructure and cut costs amid financial difficulties it has faced since the 2008 financial crisis.
Waterbury-based Webster Bank also closed eight branches in the past year, as part of that lender’s new retail banking strategy, in which it is shifting investment from physical to electronic infrastructure. Webster Bank has been organizing around a hub and spoke model, which will ultimately mean fewer, smaller branches, situated around larger regional offices.
Nationwide, banks closed down 2,001 branches over the past year, and added 1,234 branches for a net loss of 767 banking offices. Only four states — California, Rhode Island, New Mexico and Delaware — tallied net increases in branch counts, according to SNL Financial, while 43 states experienced net declines in brick and mortar offices.
Pennsylvania was hit hardest by branch closings, experiencing a net loss of 87 branches, while California had a net gain of 22 branches. Connecticut’s nine-branch net loss put the state in the middle of the pack.
Bank of America has been the market share king of Connecticut in recent years, owning nearly 24 percent of the state’s $24.3 billion deposit base.
But the company previously said it plans to close or sell about 750 branches nationally over the next few years to cut costs, but has not disclosed how many of those closings would take place in Connecticut. Since June 30, Bank of America has closed branches in Bridgeport, New Canaan, Hartford, Portland, Chester, New Haven and Stafford Springs, SNL Financial data shows.
Bank of America spokesman T.J. Crawford said despite the closings, the Charlotte lender remains the largest bank in Connecticut with more than 150 branches. “We constantly adjust our branch network to fit the changing needs of our customers, and provide the best opportunities for business growth,” Crawford said.
Meanwhile, Webster Bank closed eight branches late in 2011 in Torrington, New Preston, Wolcott, Southbury, Hartford, Bloomfield and Newtown, SNL Financial data shows.
On the opposite end of the spectrum, JPMorgan Chase & Co. added the most branches in Connecticut over the past 12 months with four new offices, all located in wealthy Fairfield County. Middletown’s Liberty Bank added three branches in the past year, while Farmington Bank added two branches.
Nationwide, Bank of America led the way with 157 net closures, while JP Morgan added a net 219 branches.
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Farmington on the move
Farmington Bank is looking to continue its push into the northeastern corner of the state with a new planned branch location in South Windsor.
The $1.7 billion bank has asked for regulatory approval to open a branch at 350 Buckland Rd. in South Windsor.
It would be Farmington Bank’s 19th branch, and put the bank right in the backyard of a growing competitor Rockville Bank.
Farmington Bank has been on a growth spurt over the past few years, adding numerous branches across Central Connecticut and raising about $170 million in an initial public offering.
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Referral deal struck
RBS Citizens and Oppenheimer & Co. have established a new partnership in which each firm will refer its clients to the other for banking and investment services, respectively.
The referral agreement is aimed at the middle market clients of each bank, with the goal of developing financial strategies that include both commercial and investment banking products and services.
Under the agreement, RBS Citizens clients requiring financial advisory and equity capital markets services will be introduced to Oppenheimer, and Oppenheimer clients in need of traditional banking products and services like debt syndications and extensions of credit will be introduced to RBS Citizens.
Greg Bordonaro writes the Financial Sense column every other week. Reach him at gbordonaro@HartfordBusiness.com.
