Banks, credit unions revisit in-person banking strategies

A former Village Bank branch in Chesterfield County is now a Dunkin’ doughnuts and coffee shop, complete with a drive-thru. Roanoke’s former First National Bank building has found new life as a 54-room boutique hotel. In Hampton, the former Bank of Hampton Roads building is a doggy day care.

It’s true that bank customers do a lot of their business digitally these days, so there’s less need for branches and in-person banking. According to American Banker, the country’s top five banks closed 492 branches nationally between July 2023 and June 30, 2024, continuing a trend from the past several years.

Wells Fargo closed multiple branches in Virginia in 2023 and 2024 as part of a national shutdown of 85 branch offices, and Bank of America’s total number of branches in Virginia has declined from 130 a decade ago to 100 as of December 2024.

But that’s not the whole story.

For some banks and credit unions, it makes sense to maintain branch offices — or even open more. Bruce Whitehurst, president and CEO of the Virginia Bankers Association and the Mid-Atlantic Bankers Association, has been hearing “the branch is dead” since the 1990s.

Virginia was “on the front end of nationwide, interstate banking and branching, and also e-commerce, [with] the first couple of internet-only banks,” he says. “There were some who were saying, ‘The branch is dead. We’re not going to have branches in the future.’” And yet, even as the total number of branches has declined, “you have other banks that are very proactively increasing the branch footprint. It really boils down to each bank’s strategy.”

Sometimes financial institutions move or renovate branches, responding to changes in customer needs. Bank of America has invested $76 million over the past five years in relocating and renovating branches in the commonwealth.

“There’s a low, medium and high scope,” explains Nick Koumentakos, consumer banking regional executive for Bank of America. His territory includes Virginia, where all 100 branches have received renovations in the past three years. “Some of them we’ve completely … gutted the entire place and built it back out to have enclosed offices, to reposition where the service line is, to create more space for our clients.”

And in some cases, Bank of America has removed drive-thrus from its branches. “We were less able to help people effectively inside, and most people are handling the transactions that they could do through the drive-thrus digitally,” Koumentakos says. “We’ve scaled it down over the last few years.”

Different blueprints

Executives at Richmond-based Atlantic Union Bank also have given the subject of branch locations a lot of thought, especially after its $507 million purchase of Danville-based American National Bank and Trust in April 2024 and the bank’s expected closing this year on Maryland’s Sandy Spring Bank.

As of December 2024, Atlantic Union has 129 branch locations across Virginia and North Carolina, and its pending $1.6 billion purchase of Sandy Spring will greatly expand Atlantic Union’s reach into Northern Virginia, Washington, D.C., and Maryland. That calls for different strategies.

After completing its buy of American National, Atlantic Union consolidated six American National branches and closed one of its own branches in Virginia and North Carolina because the two banks had overlapping offices in those localities, sometimes within sight of each other. But for Sandy Spring’s territory, the plan is to open three new branches, including one in Prince William County, and keep existing locations open, at least for now.

“American National Bank … had a backlog of branches that they had intended to close, and that’s mostly what we closed,” explains Shawn O’Brien, Atlantic Union’s consumer and business banking group executive. “But we try and take a pretty conservative approach when we acquire a bank because we don’t know their markets all that well. So, we don’t want to be in a position where we make a mistake, close a branch and then can’t serve a bunch of customers for one reason or another.”

Regarding Sandy Spring, O’Brien notes that Atlantic Union already has some branches in Northern Virginia, but no real presence in D.C. or Maryland, which make up the bulk of Sandy Spring’s territory. “To us, these are all new markets, and we’ll want to really learn the market. There’s different traffic patterns, there’s different customer types,” he says. “We’ll want to sit with that for a year at least to kind of understand what that looks like.”

Atlantic Union CEO John Asbury adds that there will be no branch-based Sandy Spring employees laid off after the acquisition closes by the third quarter of 2025.

“It’s very little overlap, and we can absorb them in the normal course through the broader network,” he says. “We’re super-excited, by the way, because we’re pretty thin in Northern Virginia, and they deliver a very good branch network in Northern Virginia, and then they’re expansive throughout Maryland. They’re kind of the Maryland version of us.”

In Atlantic Union’s home base of Richmond, the bank opened two branch offices in 2021, responding to market changes.

The bank’s Three Chopt Road branch in Richmond’s West End replaced a semi-hidden location on the back side of a nearby shopping center and now is a more prominent stand-alone structure. In the city’s hot Scott’s Addition neighborhood, Atlantic Union has a small branch amid the restaurants and breweries.

Matt Joyce, senior branch manager at the Three Chopt location, says there’s much more foot traffic at the new freestanding branch. Especially following the COVID-19 pandemic, customers appreciate its drive-thru capacity, which the old Three Chopt location lacked. Unlike older branches, the new one has fewer tellers and more individual offices for longer conversations, although they’re built with glass walls, creating a sense of openness.

Newer Atlantic Union branches are adapted toward modern banking needs, as more people use mobile apps or online banking to transfer funds, deposit checks or accomplish other financial tasks. When people come to the bank in person, they are more likely to have an appointment to discuss a loan or apply for a mortgage. Retail businesses that deposit cash daily or need coins also come to Joyce’s branch, he says.

“This is my opinion, but I don’t believe the branch is going to go away,” Joyce says. “The digital platforms are great until something goes wrong, or you need to build a relationship with somebody.”

And those conversations may start at the branch office and continue via Zoom, Microsoft Teams or phone, adds Joyce, who started his banking career 15 years ago. Also, there are still people — generally older customers — who come to the bank to cash and deposit personal checks, as well as workers at Joyce’s branch who field calls about potential fraud or phishing scams after customers receive suspicious emails or texts. And plenty of people stop by to have hot tea or coffee in the bank’s waiting area before doing their banking business.

“I think we’re also in a day and age where, even though things have become easier doing them online or digitally, people still miss the human interaction,” Joyce says.

Credit unions’ priorities

Credit unions also have reasons behind opening new branches and keeping others open. Virginia Beach-headquartered Chartway Credit Union is one of the state’s largest credit unions, with more than 230,000 members in Texas, Utah and Virginia and $2.7 billion in total assets. In December 2024, Chartway opened a new branch office in Norfolk, and was set to open another location in Virginia Beach in January.

“We have data that suggests that about 50% of individuals want branches within 10 minutes of where they live,” says Chartway President and CEO Brian Schools. “So, we look at the geographic growth areas. We also look at our current membership. There are some consolidations, even within our growth. Sometimes we relocate a branch because maybe the traffic patterns have shifted.”

In certain parts of the commonwealth, property costs can enter into the equation of where to locate branches, especially in pricey Northern Virginia and Richmond neighborhoods.

However, Bank of America’s Koumentakos says land values are never his bank’s top priority when choosing whether to close, keep open or build a branch office. “It’s not done from the position of, ‘Hey, let’s make a quick dollar on the real estate.’ It’s, rather, what’s going to serve our clients and make sense for us.”

Property costs are one of several factors that Chartway takes into consideration with branch locations, Schools says, given that the credit union answers to its members. “We have to be very, very diligent,” he notes. “We look at the growth and the expected growth in those areas to ensure that the return [on investment] is there.”

In Norfolk’s East Beach community, Chartway’s new branch fulfills a need in “a very vibrant and growing area not far from the airport,” Schools explains. “It is about 15 minutes from our closest branch, and we felt there was an area that maybe we were not serving as adequately as we could.”

As a new branch, it functions a bit differently than an older one, he points out, with “some self-service capabilities,” but also offering staffers to assist as needed. The credit union also has introduced interactive teller machines, or ITMs, at some drive-thru branches. “Technology and branches aren’t mutually exclusive,” Schools says.

Chartway’s branch philosophy is pretty similar to other credit unions’, says Samantha Beeler, president of the League of Southeastern Credit Unions, which the Virginia Credit Union League joined in November 2024. West Coast credit unions sometimes close branches, but that trend has not taken off on the East Coast, she says.

“How we use our profits might mean instead of us giving a greater return to shareholders,” as commercial banks would do, “our motivation is to give [profits] back to the members,” Beeler says. “It might mean the members say, ‘Hey, we need new technology, or we need more access on XYZ corridor,’ and we’re finding a pretty big trend of abandoned bank branches that we can buy up.”

Self-service kiosks are popular with members, but so are ATMs and in-person conversations, Beeler says, requiring an expansive approach. “There’s still demand for all of it. We’re still adding branches.”