Big cities such as Chicago, New York, and Dallas are getting hundreds of new branches every year, but smaller markets - Greeley, Colo., and Bowling Green, Ky., for example - are adding them even faster.
And though big banks are driv-ing the growth in the major markets, community banks are leading the way in the smaller ones, according to data recently released by the Federal Deposit Insurance Corp.
The number of banks is still shrinking, but branch building is accelerating. There were 92,449 branches in the United States at midyear, 2.7% more than a year earlier. The total had grown only 2.1% in the 12 months through mid-2004 and 1.1% in the year before that.
Much of this growth, of course, occurred in well-established metropolitan markets, such as Chicago, where out-of-town banks are trying to get footholds and local banks are building to protect their turf.
Roughly 11% of the more than 2,000 branches added nationwide since mid-2004 were in the 14-county Chicago metro area. Leading the way was Royal Bank of Scotland Group's Charter One Bank, which opened 17 branches. No. 2 was Bank of Montreal's Harris Bank, which opened 12.
It was a similar story in the Dallas-Fort Worth area, which had 7.3% of all new branches since mid-2004. Leading in that 12-county market was Wells Fargo & Co. of San Francisco, which added 27 branches.
But in percentage growth, Dallas ranked fifth in the nation and Chicago was not even among the top 20. Because Chicago, for example, already had so many branches, 243 more was just 8.8% growth.
On a percentage basis, Greeley, about 60 miles north of Denver, added branches faster than any other metro area. On June 30 it had 72 of them, 22% more than a year earlier.
Bowling Green ranked No. 2 by this measure, with 16.3% growth, followed by the Texarkana metro area, which straddles the Texas-Arkansas border, with 12.5%.
That was actually consistent with previous trends. Bend, Ore., was the fastest-growing branch market in the 12 months through mid-2004; Dubuque, Iowa ranked first in the year before that.
Though not major population centers, Greeley, Bend, Dubuque and the like are growing fast, partly because living is cheaper there. And where people go, banks follow.
Greeley is in Weld County, whose population jumped 21.2%, to 219,257, in the four years through 2004. That was the second-highest rate in Colorado and among the highest in the country.
As of 2000, Greeley's average household income was $42,300, lower than the Colorado average. But Don A. Childears, the CEO of the Colorado Bankers Association, expects a substantial change when census figures are updated.
"Developers have found this area fairly attractive and have built a significant amount of housing around here," he said. "Banks like to decide where they will go next by counting the number of rooftops," he added.
The $372 million-asset Bank of Choice in Evans, Colo., has opened two branches in the Greeley area in the last year. Darrell McAllister, its president and chief executive officer, said that Greeley is overbanked but that he needed to add branches there before larger banks do.
"There has been a lot of growth on the Front Range of Colorado, and we were not covering the town as well as we should have been," Mr. McAllister said.
Thirteen new branches have been opened in greater Greeley since mid-2004 - 10 of them by banks with less than $1 billion of assets.
In Bowling Green, banks with less than $500 million opened all seven of the new branches. Though its population has grown less than Greeley's, Bowling Green is a more attractive market for bank expansion than Kentucky in general. The population of its home county, Warren, grew 5% in the four years through mid-2004, more than twice as fast as the state population, and its average household income was $36,000, well above the state average, in 2000. It is also home to a large General Motors' plant that makes Corvettes and Cadillacs and to Western Kentucky University, which has about 20,000 students.
The $475 million-asset Independence Bank of Kentucky, which is based in Owensboro, wanted a piece of Warren County's growth. It hired Bob Fitch as county president 18 months ago to lead its expansion there.
Independence opened its first Bowling Green branch last year; it now has three there and plans to open two more next year, he said.
Though other banks are also adding branches, there is more than enough business to go around, Mr. Fitch said. "The competition is excellent, because it creates a better economy with lower rates and more opportunities for loans," he said.
However, when it comes to Texarkana, there is no obvious explanation for the branch explosion. The market seems overbranched - there are 1,047 residents per branch, versus a national average of 3,218.
Furthermore, the population of Bowie County, the Texas side of this metro area, grew just 1.1% in the four years through June 2004.
Still, the $1.9 billion-asset Bank of the Ozarks Inc., which is based in Little Rock, opened a branch on the Texas side a year ago and is slated to open two in this market in mid-2006.
Susan Blair, an executive vice president, said that though Texarkana is not growing fast, it is more attractive than most markets in Arkansas.
