U.S. Bank will expand to Charlotte, opening 10 branches as test for more growth

U.S. Bank will open bank branches in Charlotte, N.C., this fall, the first step in a long-anticipated expansion in the southern U.S.

The Minneapolis-based bank, the nation's fifth-largest, said Monday it plans to build 10 or so branches in Charlotte over the next year and a half.

With the move, North Carolina will become the 26th state where U.S. Bank has branch operations. The company will build the branches with a new design that puts a greater emphasis on technology and digital banking.

"This is a huge learning opportunity for us," said Tim Welsh, vice chairman for consumer and business banking at U.S. Bancorp. "We haven't done this kind of expansion before. What we want to do is learn how to do it and make sure we do it well and then consider if or when we may pursue other similar kinds of opportunities."

U.S. Bank is in the midst of a major overhaul to its 3,000-unit branch system as both consumers and business customers use branches less and rely more heavily on digital access to their money and financial products.

The company will close or merge some branches, remodel others and open new locations. As a result, the company two years from now will have 10% to 15% fewer branch locations, executives told investors last week.

Along with the restructuring, the company aims to expand to several other states, chiefly in the faster-growing southern U.S. beyond its base in the Midwest and West.

"We tend to have a concentration of employees and customers in specific cities," he said. "That's what's got us so excited about Charlotte. We have both those things there."

The city is also home to the headquarters of Bank of America, the nation's No. 2 bank and about five times the size of U.S. Bancorp. Bank of America entered the Twin Cities market with a retail presence in 2015. It has built 21 branches since then and recently announced a plan for seven more.

Bank of America and other banks for several years have moved into new markets with branches that had fewer tellers and more emphasis on technology. U.S. Bank was constrained from making such moves while it was under a regulatory review over its anti-money laundering practices. A consent order associated with that issue was lifted in December, freeing the firm to begin its branch restructuring.

U.S. Bank said its Charlotte branches will be designed similarly to one that it opened in San Diego recently. At that location, digital tablets and smart speakers are at the center of the bank for customers to test. Bankers sit in offices around the digital devices and there is also a community room for civic groups to use.

"As we go into Charlotte, we'll have a similar footprint with a place for technology, a place for personal discussions and a place for the community to be involved," Welsh said.