Magazine article American Banker

Charter One Plans to Triple In-Store Branch Network

Magazine article American Banker

Charter One Plans to Triple In-Store Branch Network

Article excerpt

Stepping up its effort to assert itself as a retail banking power, Charter One Financial Inc. on Friday unveiled plans to add 139 branches over the next two years, most of them in grocery stores.

The announcement, made as the $40 billion-asset company reported a 7.8% increase in fourth-quarter earnings from a year earlier, to $146 million, came on the heels of a November deal it signed with Tops Markets LLC to open 34 supermarket branches in northern Ohio and western New York.

Friday's move also followed, by one day, the announcement of a $72 million stock deal to acquire Advance Bancorp Inc. of Chicago.

Charter One expects its in-store network, which now includes 50 branches, to reach approximately 153 and move it to No. 10 in in-store banking. Overall, its branches would increase roughly 20% this year, to close to 561 branches.

In addition to Advance's 14 branches, the expansion plan includes 22 traditional de novo branches and 103 supermarket ones.

Executives said the plan should drive revenues as the bank picks up market share and retail customers, all the while increasing its cross-selling opportunities. The branches "should help tee us up for our growth expectations in '04 and beyond," Charles John Koch, Charter One's chairman and chief executive officer, said Friday during a conference call with investors to announce its earnings.

In an interview on Friday, Mark Grossi, an executive vice president and the chief retail officer, says the bank strongly "believes" in in-store branching. "We're good at it, and it's a great way to acquire households and drive revenues."

Many banks have opened supermarket branches. Some, like National Commerce Financial Corp. of Memphis (which had 181 in-store branches at the end of November) and TCF Financial Corp. of Minneapolis (which had 241), have been successful. (Both of them plan to expand. …

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