It's been about a year since the second largest bank in the country announced it wants to expand its services in Ohio including the Cleveland area. Now, we have more details about the Bank of America plans.
CLEVELAND — It's been about a year since the second largest bank in the country announced it wants to expand its services in Ohio including the Cleveland area. Now, we have more details about the Bank of America plans.
I think it's an incredible opportunity for all banks, ” said Jeneen Marziani who is the Ohio State President for Bank of America. Early last year, the company said let's get into Ohio more. Some (bank branches) will be brand new locations that we'll be building from the ground up, ” said Marziani. “Others will be where we are going into new locations, so leasing and equipment and those are all jobs back to Ohio.
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News 5 has learned the first financial center in our area is slated to open in Strongsville sometime in the second quarter of 2020. That's about a year from now. The company will start its expansion in Columbus and Cincinnati later this year.
For consumers, you're going to see a wider selection of services, ” said Balasubramanyan. “Bank of America is going to bring with it economies of scale in marketing and technology.
And that means competition for the current regional banks like Huntington, 5/3rd, PNC, and Key Bank that have a large market share in Ohio.
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Some financial experts say part of that cost-effective strategy will include mergers among the regional banks. Wells Fargo analyst Mike Mayo is quoted on TheStreet.com as saying, “Alarm bells should be going off at the Ohio banks because a big competitor is getting more aggressive in their backyards.
“Simply put, if you have a buyer who is willing to pay a premium to get bigger market share, yeah, you are going to see a lot of consolidation taking place, Balasubramanyan said.
“I do feel like there is a place for regional banks, national banks in terms of what we need to do to serve our local communities here.
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Both Marziani and Balasubramanyan used the term healthy competition when talking about Bank of America's plans for bringing local retail hubs into our state. “This is all new in Ohio, ” said Marziani. “So, I think it was the right time, right place for us to pivot and really make the significant investment that we wanted to make.
Bank of America has said it wants 500 new bank branch locations across the country in a 4-year timeframe. Marziani told us in Ohio, the company has expanded its ATM locations from 3 to 61 so far.Bank of America is beginning to build up its presence in Northeast Ohio as part of an ongoing national expansion of its already sizable U.S. footprint.
The expansion includes installation of new ATMs and branches designed as either financial centers or advanced centers. Both branch models are modern and tech-enabled, but the former operates as a more traditional branch, staffed with eight to 10 employees on average. The latter features capabilities for talking with bankers virtually.
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A North Carolina-based company with more than $2 trillion in assets, BofA began its Ohio expansion in late-2019 with Cincinnati and Columbus before moving into Northeast Ohio.
The pandemic slowed down some openings because of construction delays, but that hasn't otherwise impacted near-term plans for building up the bank's presence in the Buckeye State, where the bank now has ATMs at 55 different sites.
Felicia Lewis, consumer banking and market expansion region executive for BofA, confirmed that two Cleveland-area financial centers opened recently — one in Mayfield Heights in August and another in Woodmere in September.
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By the end of 2021, Lewis said, BofA intends to have opened 13 new locations in the Columbus market, nine in Cincinnati and six in Cleveland for a total in the state of 28 offices geared to retail customers.
According to the Office of the Comptroller of the Currency, BofA has had 13 new branch locations approved in Ohio so far this year. That includes sites in Euclid and Rocky River that have not officially opened yet.
The banking market here is highly fragmented, but Lewis said a goal of deepening the bank's presence in Ohio overall and Cleveland itself is serving customers already residing here. Backing this up, she indicated the branches in Mayfield Heights and Woodmere drew approximately 40 and 85 customer appointments each, respectively, in their first month.
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Ohio is a great market, we are seeing growth there and we want to be where our clients are, Lewis said. It really is a competitive market, which is why we want to be there.
The largest banks in Ohio by deposit market share (in order) are U.S. Bank, Fifth Third Bank, Huntington Bank, KeyBank and JPMorgan Chase Bank.
As of June 30, BofA reported approximately $6 billion in deposits in Ohio — catapulting it to the 11th-largest bank in the state — and $3.4 million in Northeast Ohio. The bank reported zero deposits in the state in 2019.
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In 2018, BofA announced plans to establish 500 new financial centers nationwide over the coming years. It already had added about 150 at the time. The company later said in 2019 that those 500 new locations would be achieved over the next four years as sites pop up across the Midwest in particular. Jeneen Marziani, Ohio president for BofA since 2009, told Crain's at the time that Ohio would be a significant part of that growth.
Whether that same level of expansion will be achieved as initially projected is unclear. Lewis said as the company moves into 2021 and plots out following years, it's not making any specific forecasts for its expansion in large part due to the lingering economic uncertainty created by the COVID-19 pandemic.
We are not projecting beyond 2021, Lewis said. That is because we are being nimble through this and making sure we are not overcommitting or undercommitting, either.
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As could be said across its footprint, BofA's presence in Ohio, and in the Northeast Ohio market, has ebbed and flowed through the years. It does have a private bank office in downtown Cleveland. In 2013, for example, in the wake of the financial crisis, the bank shut down three mortgage offices across Ohio, including one in Beachwood, where 1, 000 employees were laid off.
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