Regions has sped up plans to build branches in Florida, Georgia and Tennessee, as the regional lender faces “intensifying” competition within its Southeast footprint, CEO John Turner said this week.
Turner, speaking at an investor conference Wednesday, said the Birmingham, Alabama-based bank plans to build between 135 and 150 branches over the next five years.
Executives “just made the decision to pull that forward a little bit,” he said. “It was a seven-year plan, now it’s five. And it might be four if we can acquire properties faster.”
Regions’ overall branch count, though, should remain flat, he indicated.
“Simultaneously, we’ll probably close about as many” branches, Turner said, as the bank responds to population shifts and sees the opportunity to combine two or three branches into one. The lender counts about 1,250 locations across 15 states.
Turner projected between 16 to 20 new branches in Florida, six to 10 in the Atlanta area, and 12 to 16 across markets in Tennessee. He called out Miami and Nashville as metro areas that will each get several new branches.
Regions customers still visit branches for advice and guidance, particularly when facing an event they’ve never experienced, Turner noted.
Branches also provide a key connection to the brand. The way branches look and feel is an “important reinforcement” of the brand identity, he said.
The $159 billion-asset lender has found “branching in existing markets, where we have a presence already, is highly profitable,” Turner said. “Entering de novo markets, where we have a very limited presence, is much more challenging.”
He chalked that up to Regions’ focus on “building core relationships with customers, not just buying deposits. And that’s hard work,” he said.
Economic and population growth have led a number of larger lenders – including JPMorgan Chase, Bank of America, PNC, Fifth Third and Huntington – to pursue plans to open new branches in states within Regions’ footprint. Local lenders like Truist are also plotting new locations in the Southeast.
Competition is “definitely intensifying,” Turner said, noting JPMorgan’s branch openings in Regions’ territory.
The largest U.S. lender has 14 branches in Alabama, according to Federal Deposit Insurance Corp. data, and aims to have 35 in the state by 2030.
But Regions seeks to lean on its “hometown bank” identity in those markets, Turner said.
“We’re always looking at branch applications across our footprint, so we know who’s opening what branches, when and where,” and Regions keeps tabs on “whether or not our customer has an ancillary relationship with that bank,” Turner said.
If a Regions customer, for example, has a credit card with JPMorgan, “we know to target our focus on that customer, because we believe that’s who [JPMorgan is] going to try to win,” Turner said.
As that rival opens branches near those customers, Regions counters with outreach and offers designed to retain those relationships, he said.
In Regions’ best markets, the lender has a 30% market share, he said, so it aims to snag some of the 70% of customers who bank elsewhere.
“More competition in our markets,” Turner said, “makes us up our game and get better.”
Also Wednesday, Regions said it hired Whitney Stewart Russell as head of consumer products and origination partnerships. Russell, who joined the bank from payments processor Fiserv, will focus on adding deposit relationships, refining consumer banking services and solutions and enhancing customer experience at Regions, the bank said.
