Some Midwest banks are lengthening branch hours to counter tepid sales, an effective but costly way to draw customers and one that could spread to other regions.

Keeping branches open longer is a good way to pressure or outflank a rival. But it pays off only until the bank across the street extends its hours, experts said.

"It absolutely forces the direct competitor to think very hard about matching you," said Kevin Travis, a director with Novantas LLC, which advises large banks on customer acquisition. "If you want to be the first mover, it's great. The downside is if you're not careful, you can create an arms race: 'I can stay open longer than you can.' "

Branch hours have swelled through the years in dense, fast-growing markets like New York and California. They're becoming a competitive weapon in the Midwest thanks in part to Huntington Bancshares Inc. of Columbus, Ohio. It extended hours in Cleveland six months ago, driving sales of checking accounts higher. Most Huntington branches are open 67 hours a week now instead of 41. Fifth Third Bancorp and FirstMerit Corp. also have extended their branch hours in Cleveland, though not as much as Huntington has.

The middle of the country is ripe for a market-share tussle, experts said. Top players like Fifth Third have been humbled. Others, like National City Corp., disappeared. The area has some of the worst growth prospects in the country, so survival hinges on finding more customers who can buy multiple products.

Huntington, Fifth Third and FirstMerit are hoping that longer hours can help accomplish that. All three are pursuing former customers of National City, which had the top deposit share in Cleveland when it was bought by PNC Financial Services Group Inc. in 2008.

"How do you grow revenues if people aren't borrowing money? You have to grow customers," said Anthony Davis, managing director with Stifel, Nicolaus & Co. "They're throwing down the gauntlet here and saying, 'We're going to use this' " to take share.

PNC hasn't changed its hours despite the onslaught. It sets them according to customer needs, not competition, a spokesman for the Pittsburgh-based company said.

Huntington has 600 branches in Ohio, Kentucky and four other states. It is considering extended service in other places after trying it out in Cleveland.

Fifth Third, of Cincinnati, has lengthened hours at most of its 1,300 branches in 12 states. It began extending hours in February in places like Cleveland and Chicago and finished this summer.

Davis said other institutions have to consider extra branch hours. Longer hours can increase deposit share, but it is not cheap. Employees are among a company's biggest expense. More hours means higher salary costs.

Huntington hired 120 new people as it extended hours at 53 branches in Cleveland. Its salary expenses rose 4% in the third quarter compared with the second quarter, according to regulatory filings. It also spent $500,000 marketing the added hours.

"It is fairly expensive. We do think it is a profitable proposition," said Mary W. Navarro, Huntington's retail and business banking director. "We don't have population growth in any of our markets. We're really growing from taking share from other banks."

Sales of checking accounts at Cleveland branches have been 28% higher than sales at branches with unchanged hours, she said. The new hours are 8 a.m. to 7 p.m. during the week, with longer Saturday hours and new Sunday service. Hours varied before the change, though a number of branches closed by 4 p.m. most days.

Salary expenses also rose at Fifth Third and FirstMerit last quarter, according to regulatory filings. Fifth Third lengthened hours at 80 of 84 Cleveland branches, some by much as three and a half hours a week, a spokeswoman said. Some that were closing at 5:30 p.m. during the week are open till 6 p.m. now. They close at 2 p.m. instead of 1 p.m. on Saturday.

FirstMerit, of Akron, extended hours in December at more than half its 206 branches, a company spokesman said. Some, like a location in Streetsboro, Ohio, added more than 10 hours a week. Closing went from 4 p.m. to 6 p.m. during the week at that branch. It opens a half hour earlier on Saturday.

Jamie Eads, a senior project manager with the consultant Bancography, said checking accounts are a bank's most important link with customers. Someone is more likely to take out a loan or buy an investment product from the place that cashes his checks, she said.

Research shows that customers value convenience above all else when choosing a bank, Eads said. Longer hours are convenient. But a branch loses its competitive edge as soon as its neighbor starts staying open later, she said. Then both incur higher costs while new sales taper off. But branch hours are relatively easy to change without jarring employees or customers. Employee turnover at branches is high, so banks can wind them back gradually. Eads said hours may expand for a while before contracting. "It is very easily replicated," she said. "It'll come back around full circle if the economy gets better. They can change branch hours anytime they want, really."

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