The rise of the coronavirus last spring led to a near-universal response from U.S. banks: close branch lobbies to the public, limit in-person activity to appointments only, redirect most customers to the drive-through and, in situations where there were no safe ways to operate, shut down the entire branch.
This time, it’s different.
Many large and regional banks are avoiding broad shutdowns amid the late-fall surge in COVID-19 cases. Instead they’re evaluating the situation on a branch-by-branch basis and relying on the safety protocols instituted in the spring to hold the virus at bay — and keep branches open.
None of the nation’s four megabanks have announced sweeping 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 shutting them on an individual basis if there’s a reason for branch staff to quarantine.
However, it’s a feeling of déjà vu at some smaller banks as they close lobbies across the board and revert to the appointment- and drive-through-only access that carried them through the first wave of the pandemic.
The diversion in approach has a lot to do with the fact that many smaller communities have become hot spots now that the U.S. has reached 12.3 million confirmed cases. Decisions will be largely individual, based on COVID-19 infection rates in specific markets and on various state and local enforcement actions, said Ryan Myers, senior director at Cornerstone Advisors.
"I think the community banks will more frequently respond to their communities, while the larger organizations will try to treat things more holistically," Myers said.
One of those community banks is Customers Bancorp in West Reading, Pa., which announced Friday that its 13 branches would return to appointments only.
“As you can see this week, the states are tightening up, so we are definitely tightening up again,” said Jim Collins, chief administrative officer of the $18.8 billion-asset company.
The country's biggest banks are touting the implementation of branch safety measures put in place last spring: mask mandates, social distancing signage and the installation of Plexiglas to separate employees from customers.
At Citigroup, about 16% of branches remain temporarily closed, down from a peak of approximately 40% in March, and no additional closings are planned, a spokesman said. In fact, this week the New York-based bank plans to reopen seven branches in California where positivity rates are low.
At Wells Fargo, about 25% of branches were shuttered at the pandemic’s start, a spokeswoman said. Today about 15% of branches remain closed, including some whose layout is too small to allow for proper social distancing and those that do not have drive-through windows.
But that’s not to say there won’t be changes if circumstances veer in the wrong direction.
“We are continuously reassessing as the situation changes and may make adjustments where needed with the safety of our employees and customers as our top priority,” the spokeswoman said.
U.S. Bancorp in Minneapolis is taking a similar approach. Due to an uptick in cases in certain parts of the country, including Chicago and Tennessee, the $536.9 billion-asset company has once again closed branches or closed lobbies and returned to drive-through service only, a spokesman said. The bank temporarily closed 500 branches in March.
The spokesman could not say how many are closed now.
Citizens Financial Group in Providence, R.I., has kept its branches open through the pandemic, but adopted a three-phase system for its branches, a spokesman said. The $179 billion-asset company’s branches are operating in “Phase 2,” meaning that lobbies are open, but the number of customers allowed inside at any time are limited. “Phase 1” entails reduced hours and lobby access by appointment only, while “Phase 3” is business as usual.
The company has also installed plastic-glass barriers and requires social distancing in branches.
“We have worked closely with all of the states where we operate to meet all of their requirements, continue to monitor the situation closely and will make adjustments as appropriate,” the spokesman said.
For now, M&T Bank in Buffalo, N.Y., isn’t adjusting its branch operations, which stretch from New York to Virginia. A spokesman for the $138.6 billion-asset company — whose home base is in Western New York, where the seven-day average positivity rate (5.11% as of Monday) is the highest among 10 regions in the state — said the company is “prepared to make temporary modifications on a market-specific basis as local conditions require.”
At the same time, the spokesman said, customers continue to utilize virtual-appointment capabilities, which launched companywide in the spring, and upgrades have been made to digital offerings. Loan applications, for example, can now be processed by phone.
Back in April, Union Bank in California temporarily closed about 50 branches — or roughly one out of every six branches that it operates. Many of the bank’s remaining branches have been operating on abbreviated, 30-hour-per-week schedules. A spokeswoman for the $136 billion-asset bank said she does not anticipate further adjustments at this time.
“At the onset, we implemented many health and safety preventive measures to deter the spread of the virus, and we’ve maintained those high standards throughout the last nine months,” she said in an email.
Smaller banks generally report more sweeping actions, though some are trying to tailor their moves.
The $640 million-asset Reading Cooperative Bank in Massachusetts said it will move lobby access to appointments only for the two weeks following Thanksgiving and Christmas and expects to resume normal operations on Dec. 14 and Jan. 11 unless cases surge.
Meanwhile, Northwest Bank in Warren, Pa., with $13.8 billion of assets, shuttered branch lobbies Monday and shifted to the appointment- and drive-through-only model for an undetermined amount of time, citing the rising 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, N.Y., closed three of the four branches it operates in the Buffalo market.
Five Star Chief Administrative Officer Sean Willett said the bank had temporarily closed all but two branches in its 50-branch network back in March, but reopened them over the summer, excluding six that will be permanently closed due to a long-range consolidation plan.
Instead of widespread shutdowns, the bank is now looking market by market to determine if any branches need to close. A few weeks ago, it temporarily shuttered lobbies in other parts of its footprint where spikes were occurring.
Five Star plans to limit lobby access for at least two weeks to avoid a “yo-yo” situation, Willett said.
“We’re trying to be very transparent about it and with associates so that they know how we’re managing this particular event,” he said.
The Consumers Bankers Association said the number of closed lobbies seems to be “isolated” across the industry, with those in metro areas often limited to places where another branch is nearby. Spokesman Nick Simpson said that, based on conversations with banks, most are fully open or have just a handful of closings.
“Each bank is deciding what is best for their network, but the overwhelming majority of branches are open,” he said. “Institutions are continuing to monitor local conditions and some are making or considering slight adjustments to hours or going to drive-through-only models as a result of facility cleaning or staffing shortages resulting from quarantines.”
By and large, banks of all sizes have adapted to operating in the COVID-19 environment, said L.T. (Tom) Hall, founder and CEO of Resurgent Performance, a banking consultant firm near Atlanta. But there will be changes in the branch model that persist post-pandemic.
In fact, he predicts that 10% to 15% of bank branches will permanently close next year. In September, PNC Financial Services CEO William Demchak said the Pittsburgh company was
“This surge, I think, will serve as another catalyst to point the need for many banks to look at branches and look at costs and decide how they’re going to operate,” Hall said. “For some, they’re going to lose branch traffic and they’re going to have to reinvent themselves and be more digital and do a better job of marketing and managing their costs.”
