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Banks continue to bet on bricks and mortar

Chris Oddleifson
Chris Oddleifson

The banking industry has long wondered when branches would start dying off in a big way.

Not anytime soon, it turns out.

While more people than ever are banking with their phones, banks still believe in bricks and mortar. The number of local, state-chartered bank branches in Massachusetts has actually increased by 20 percent during the past four years. The state Division of Banks reported 1,142 as of the end of December, compared to 953 in 2014, with steady growth each year.

The picture changes somewhat when you throw federally chartered banks into the mix — the big guns such as Bank of America, Citizens, Santander, and TD. Total branches in the state, as tracked by the Federal Deposit Insurance Corp., fell 3 percent over the same time. A drop? For sure. But no sign of a pending demise: The branch total — which includes all retail banks, big and small — has bounced around 2,200 for the past decade.

What’s going on? Massachusetts Bankers Association chief executive Daniel Forte says some midsized banks are trying to fill geographic holes as they expand by acquisition, and many community banks are looking to enhance their brand and strengthen their position as the local alternative to the giants.

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Not every big bank is cutting back. Chase just arrived on the scene, with aggressive plans to open nearly 20 branches in Greater Boston by the end of the year. The first opened in Dedham last month, and Chase’s high-profile spot at Winter and Washington streets in Downtown Crossing is due to open on Feb. 12.

That’s essentially around the corner from Rockland Trust’s first downtown branch on Franklin Street, which also opened in December. Chris Oddleifson, the South Shore bank’s chief executive, for years has wanted a downtown storefront — an important venue to connect with Rockland’s roughly 25,000 customers who work in the city. Plus, maybe Rockland can attract new customers from nearby condo towers. Rockland already has a business and wealth management office downtown, but the branch represents a major new investment.

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HarborOne’s story is similar. Executives there long eyed a Boston beachhead. But they were hemmed in by geographic restrictions when HarborOne was a credit union, limiting the Brockton-based institution to four counties south of the city. Its conversion, from credit union to bank, opened doors — and brought in capital. HarborOne unveiled plans last week to finally open a Boston branch, on Broad Street near its loan production office, by the fall. Another new one, in Stoughton, is under construction.

The trend doesn’t thrill everyone. Newton Centre collectively groaned when Peet’s Coffee closed its shop there last year: Not another bank. (It will be a Chase branch.) Similar sighs were heard along Charles Street in Beacon Hill about seven years ago, when Capital One tried to open there. (Capital One eventually gave up – and a Peet’s moved in.)

Rosemarie Sansone, chief executive of the Downtown Boston business improvement district, welcomes the growth. She says the banks are getting more engaged in the community, and the trend downtown makes sense as more people live there.

Of course, most customers visit branches less often these days. But they still apparently want the comfort of knowing they can talk face-to-face with someone if they have a problem with their account. The storefronts also represent an important — if expensive — form of marketing, a way of saying “we’re here for the long haul.”

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Looking ahead over the next decade, many in the industry expect the branch numbers to decline, perhaps significantly, as consumers do more online and on their phones.

But then we’ve heard that before.


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.