JP Morgan insists that the location of its first Chase branch in Charlotte is entirely coincidental.
But, to any uptown observer walking by Trade and Tryon Streets, what happened is clear. JP Morgan built its first branch in Charlotte right across the street from Bank of America’s headquarters.
It’s a bold move, part of a bold effort on JP Morgan’s part, built on top of a logical thesis. Historically dominated by two huge banks, Charlotte’s growing, affluent population makes it a perfect opportunity for more competition.
While a ribbon-cutting was called off due to the coronavirus pandemic, the branch, at 112 South Tryon, quietly opened a week ago.
In the past, JP Morgan opening up shop on Trade and Tryon would’ve sparked madcap outcry among the banking elite. But that era of Charlotte banking is over.
Sure, the branch has ruffled some feathers among Bank of America loyalists. But the dyed-in-the-wool bank capos that led the city’s emergence as a financial capital are mostly retired.
Bank of America declined to comment on the branch.
While skewed due to the presence of Bank of America’s headquarters, the statistics on deposit market share in Charlotte are demonstrative of the longstanding duopoly in the city’s banking space.
Bank of America has 73% of the deposits in the Charlotte metro, Wells Fargo has 15%, and no one else has more than 5%, according to FDIC data from last year.
Ultimately, JP Morgan is making a bet that the region is growing fast enough, and is rich enough, that it can cleave off enough deposits to have a major expansion make sense.
It’s not alone: U.S. Bank, the fifth largest commercial bank in the country, opened its first Charlotte branch one block south of the new Chase branch last year.
JP Morgan has an advantage that other banks expanding into Charlotte don’t: its massive credit card business.
It’s hoping that it can take the hundreds of thousands of credit card customers it has in Charlotte, and sell more products to them. That pre-existing relationship makes expansion easier, according to Dan Deegan, who leads JP Morgan’s expansion.
“When we show up, we don’t have to explain who we are,” he said in an interview. Over the next three years, the bank plans to open up to 20 branches in the Charlotte area, and 40 ATMs. In total, it plans to hire as many as 200 people in the expansion.
JP Morgan already had 150 employees in the Charlotte area, working mostly in its commercial and private bank.
Six of the branch locations have been disclosed with federal regulators. In addition to the Trade and Tryon site, JPMorgan has filed applications to open branches in Cornelius, the Arboretum and Blakeney shopping centers, Huntersville and near Myers Park.
It’s a different strategy than the way bank expansion used to run.
If you wanted to compete with a bank that had 100 branches in a market, you built 100 branches in that market, Deegan said. Now, JP Morgan believes that with consumers going into the bank less often, tons of branches aren’t necessary.
“Twenty years ago, the teller line probably was the first thing you saw as you walked in the door,” said Deegan. “We probably had, gosh, 20 to 30 teller windows in some of those older locations”
In the new branch, it takes effort to find the teller windows, hidden in the back. It’s a smaller branch, focused more on helping the bank’s wealthy clientele.
While the inside of the branch features modern lighting and lots of glass, the building itself is relic of 1920’s opulence, built by the First National Bank of Charlotte in 1927. It features a carved masonry archway over the entrance, with classical symbols of industry and wisdom.
The symbols didn’t work: the bank would face a run and fail three years later.
JP Morgan, though, is more optimistic about its expansion. “It’s a very competitive market and it’s no surprise who’s there,” said John McGinley, the bank’s head of real estate for consumer banking.
“We compete with Bank of America and Wells Fargo in many states,” Deegan said. “We’re comfortable competing with them and we think we have a great story to tell. None of this is easy. Competition is fierce.”