Of the country’s five largest banks in assets, four are battling hard for dominance in Colorado — JPMorgan Chase, Bank of America, Wells Fargo and U.S. Bank.
Wells Fargo, long the dominant bank in the state, has seen its market share slip, and so has U.S. Bank. That has allowed the nation’s largest bank, JPMorgan Chase, to move into the third spot.
Bank of America, the country’s second biggest bank in assets, has seemingly come out of nowhere. As it moves up fast from the outside, it remains a long shot to win, due largely to a late start. Yet, ask CEO Brian Moynihan where he wants to finish in Colorado, and he said the bank isn’t ready to settle for anything less than a win.
“We always want to be No. 1 in every one of our businesses. That’s our goal. We have moved up a lot, and we will continue to do so,” he said.
From one location a decade ago, the bank now has 42 financial centers, 141 ATMs and 1,000 employees in Colorado. It also has two private banking offices and 10 Merrill brokerage offices. But even with such a heavy investment, the Charlotte-based holding company has yet to rank as a top-five bank in the state.
As of June 30, Bank of America ranked ninth for its share of deposits at 2.4% of the total, and in Denver, it ranked seventh, with a 3.49% share of deposits, according to the FDIC Market Share Reports. Four years ago, the bank ranked 12th in Denver, so it is making progress, but it has been gradual.
Acquisitions are the chief way banks can quickly boost their presence in new markets. PNC Financial Services Group, which entered the state in 2017, is set to become metro Denver’s largest retail bank once it completes the $4.1 billion purchase of FirstBank. The Lakewood-based bank, which is privately held, controls about 14.5% of the deposits in the state, putting it neck and neck for the No. 2 spot with Chase.
Barring a big financial crisis where regulators request it acquire a smaller regional rival, Bank of America will have to grow its market share in the state one new customer at a time. That’s because it falls under a Bank Holding Company Act rule that limits banks with a tenth or more of deposits in the country from acquiring other banks.
“We started with branch number one, and we’re at 42, and we’ll keep going. So it’s all organic,” said Moynihan, who took over as CEO in 2010.
The expansion in Colorado runs counter to the bank’s wider consolidation of brick-and-mortar locations. Two decades ago, the bank had 6,000 locations. Now it is closer to 3,700, but Moynihan notes that the remaining branches are two to three times bigger than those of rivals, with more employees staffing them, and they are more centrally located.
After an initial focus on metro Denver, the bank plans to build out its branch network in other parts of the state and to integrate more of its technological offerings, including a star player.
Bank of America has a not-so-secret weapon, Erica, an AI-powered virtual assistant it deployed in 2018 — long before artificial intelligence became such a big target of investment and topic of conversation.
“Erica is currently doing the work of 11,000 employees, 5% of headcount, by supporting clients and teams with automation and personalized recommendations,” noted Betsy Grascek and her team at Morgan Stanley in a research report.
Through its AI models, the bank has cut its service call volume by 60% and cut its fraud rate in half. And it has managed to improve the bank’s customer service ratings while cutting its consumer banking staff from 101,000 in 2011 to 55,000 recently, according to the report.
Bank of America wants to expand its cutting-edge digital platform, but it also wants to maintain a strong human presence, using both to provide a broad mix of products, Moynihan said.
That’s why a hologram of Erica probably won’t be greeting customers arriving in a branch lobby in the future. But AI technology should work its way deeper into all areas, including helping employees make better decisions and other behind-the-scenes tasks.
“We believe you have to be high tech and high touch,” Moynihan said.
In Colorado, the bank has $32 billion in Merrill client balances, $4.3 billion in deposits, $1.4 billion in private bank client balances, $4.5 billion in commercial loans, $316 million in small-business loans, and $578 million in mortgages and home equity loans.
In a sign of its commitment to staying in Denver, Bank of America has signed a new long-term lease for the 18th floor of Block 162, 675 15th St. The lease is part of a larger $20 million investment in commercial real estate in the state the bank has made, above and beyond its branch expansion.
“Colorado remains an important growth market for our company, and this move underscores our commitment and continued investments as we build on our history in the state,” said Gabby Hodgson, president of Bank of America, Colorado.
Next fall, the bank plans to occupy 29,181 square feet of the 596,295-square-foot building, which was built in 2021. In the tug of war for commercial tenants, the relocation represents a big win for the Patrinely Group, the developer of Block 162, but a loss for Republic Plaza, which was built in 1984.
“We are proud to announce Bank of America’s tenancy at Block 162,” David Haltom, a regional vice president at Patrinely, said in a statement. “Bank of America’s decision to sign a long-term lease at Block 162 is a testament to the premium they put on the quality and flexibility the building offers to create the type of office culture they want for their employees and partners.”
The bank continues to expand its branch network and by the end of the year expects to add two new locations — 9025 Howell St. in Arvada and at 2791 N. Gate Blvd. in Colorado Springs.
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