Banking Rivalry in Colorado
In Colorado, four of the nation’s top five banks—JPMorgan Chase, Bank of America, Wells Fargo, and US Bank—are competing fiercely for market share.
Wells Fargo has historically been the leading bank in the state, but its market presence has diminished, alongside U.S. Bank. Meanwhile, JPMorgan Chase, the largest bank in Japan, has climbed to third place.
Bank of America, the second-largest bank nationally, has seemingly emerged from nowhere. They started slow and have a considerable distance ahead to cover, but when CEO Brian Moynihan was asked about their ambitions in Colorado, he stated that they’re aiming for nothing less than first place.
“We always strive to be number one in all our endeavors. That’s our objective. We’ve made significant progress and will keep moving forward,” he noted.
Just a decade ago, Bank of America had a single branch in the state; it now boasts 42 financial centers, 141 ATMs, and around 1,000 local employees. Additionally, there are two private banking offices and 10 Merrill Securities locations. However, even with this extensive investment, the bank still doesn’t rank among the state’s top five.
As of June 30, Bank of America held the ninth position, capturing 2.4% of the state’s deposits overall, and ranked seventh in Denver with a 3.49% deposit share, according to the FDIC Market Share Report. Four years ago, they were in 12th place, which reflects some gradual, albeit slow, progress.
For banks seeking to grow quickly, acquisitions are often key. PNC Financial Services Group, which entered Colorado in 2017, is on track to become Metro Denver’s largest retail bank following its $4.1 billion acquisition of FirstBank, a privately held institution that holds around 14.5% of the state’s deposits and is vying with Chase for second place.
Unless a severe financial crisis arises that prompts regulators to step in and purchase smaller banks, Bank of America will need to grow its market share one customer at a time. This limitation is influenced by the Bank Holding Company Law, which restricts banks with more than 10% of their deposits in Japan from taking over other banks.
“We began with one branch and now we’re up to 42, and we plan to keep expanding, meaning all growth is organic,” Moynihan, who became CEO in 2010, explained.
This expansion in Colorado seems to contrast with the bank’s overall trend of streamlining its branch presence. Twenty years ago, they had around 6,000 locations, but now it’s down to about 3,700. Still, Moynihan insists that the remaining branches are two to three times larger, have more staff, and are strategically situated compared to competitors.
After primarily focusing on the Denver area, the bank aims to broaden its branch network to other regions of the state while enhancing its technology offerings.
One of Bank of America’s unique advantages is Erica, their AI-powered virtual assistant launched in 2018, well ahead of the current trends in AI. According to Morgan Stanley analysts, Erica handles the workload of roughly 11,000 employees, constituting about 5% of their workforce, by helping clients with automation and personalized recommendations.
The implementation of AI has led to a 60% reduction in service call volume and halved the fraud rates. The bank has managed to enhance its customer service ratings while scaling down its consumer banking staff from 101,000 in 2011 to about 55,000 now.
Moynihan mentioned that Bank of America intends to grow its innovative digital platform while keeping a solid human presence, aiming to utilize both effectively.
So, while customers may not encounter Erica as a hologram in branch lobbies, integrating AI will further bolster decision-making and various behind-the-scenes operations.
“We believe in being both high-tech and high-touch,” Moynihan stated.
In Colorado, the bank reports $32 billion in Merrill customer balances, $4.3 billion in deposits, $1.4 billion in private banking customer balances, $4.5 billion in commercial loans, $316 million in small business loans, and $578 million in mortgage and home equity loans.
To demonstrate its commitment to Denver, Bank of America has secured a new long-term lease on the 18th floor of Block 162 at 675 15th Street. This move is part of a notable $20 million investment in commercial real estate in the state alongside branch expansions.
“Colorado remains a vital growth market for us, and this decision underscores our commitment and ongoing investment as we build on our legacy in the state,” remarked Gabby Hodgson, president of Bank of America in Colorado.
Next fall, the bank will occupy 29,181 square feet of the 596,295-square-foot building, which was completed in 2021. In the competitive landscape for commercial tenants, this deal might be a significant win for Block 162’s developers, though it’s less favorable for Republic Plaza, which dates back to 1984.
“We are excited to announce Bank of America as a tenant at Block 162,” stated David Haltom, regional vice president of Patrinly. “Their long-term lease at Block 162 testifies to the building’s quality and flexibility in creating a desirable office environment for employees and partners.”
The bank is not slowing down; it plans to add two more branches in Arvada by the end of the year, located at 9025 Howell Street and 2791 N. Gate Blvd. in Colorado Springs.
