Bank of America, the country’s second largest bank, plans to move into the New Orleans market by the end of 2025, according to an American Banker report.
Aron Levine, Bank of America’s president of preferred banking, made the comments earlier this week at an industry conference, according to the report. New Orleans was one of five cities he identified for expansion; the others were Birmingham, Alabama; Milwaukee; Madison, Wisconsin; and Boise, Idaho.
Bank of America has $2.39 trillion in assets and more than 3,800 branches in the U.S., according to Federal Reserve data from March. Only JPMorgan Chase, with $2.51 trillion in assets and nearly 4,800 branches, is larger.
But despite the massive size of the Charlotte, North Carolina-based bank, it doesn’t have a presence in Louisiana. The closest branches to New Orleans are in Pensacola, Florida.
While the shift toward online and app-based banking has caused Bank of America to whittle down the number of branches it operates over the past few years — like every other major bank — the institution has been moving aggressively into new markets. Levine said the bank has opened operations in 15 cities over the past eight years, including Denver, Pittsburgh and Indianapolis.
Because customers do so much banking online, it’s now easier to move into a new market, said Mara Baumgarten Force, a professor of practice in finance at Tulane University’s Freeman School of Business. “You don’t have to make so much of a physical commitment in terms of opening branches on the ground,” she said.
Several national and local factors make the time right for Bank of America to eye a move into New Orleans, Baumgarten Force said.
The recent high-profile collapses of Silicon Valley Bank and Signature Bank have caused customers to shift their deposits toward national banks that are “too big to fail” such as Bank of America and Chase, Baumgarten Force said.
And some longstanding banks with a significant share of the New Orleans market have been gobbled up by out-of-state businesses, such as IberiaBank (which merged with Tennessee-based First Horizon), First Bank and Trust (which was acquired by Mississippi-based BankPlus) and Whitney Bank (which merged with Mississippi-based Hancock Bank). “The sense of loyalty is not as strong now that those banks are not headquartered in New Orleans,” she said.
New Orleans' status as a tourist destination also makes it ripe for an expanding national bank. Bank of America customers want ATMs where they don’t get charged additional fees, Baumgarten Force said.
Anytime a large bank wants to enter a market, it’s a good sign about the state of the local economy. It shows the bank sees there is money to be made in the area, Baumgarten Force said.
“More competition is good for customers too,” she said. “It offers them more choice, more diversity.”