PNC Bank is dropping $1B on new branches, adding to the slew of major banks ramping up location count.

The bank said Wednesday it plans to open 100 new locations and renovate 1,200 others from now to 2028. It identified key metros as Austin, Houston, San Antonio, Dallas, Miami and Denver. PNC operates 2,300 locations nationwide.

As e-commerce and online banking options have become the norm over the past decade, banks have been closing branches. JPMorgan Chase and Bank of America have fewer locations than they did six years ago. PNC closed more than 200 locations in 2023, about 10% of its branches, citing falling foot traffic and a decrease in lending.

But now it appears big bank execs have increasing faith in the value of a robust brick-and-mortar portfolio.

JPMorgan announced a plan last Wednesday to add more than 500 branches over the next three years and renovate another 1,700. Bank of America is renovating stores and entering nine new markets and four states in the coming years.

It is a different story for smaller regional banks, which are turning to sale-leasebacks to stay afloat.

Bank sale-leaseback activity amounted to over $43M in January, and 2024 is set to surpass 2023's total of $125.3M, according to CoStar.

Regional banks went all-in on CRE lending after the Global Financial Crisis and through the early days of the pandemic, holding 70% of total bank CRE loans. Now, property values are declining, $331B in commercial and multifamily debt is coming due, and interest rates are still elevated.

Capital from sale-leasebacks allows smaller banks to take care of nonperforming loans and write-offs. Other regional banks in a slightly better position can use the funds to clean up their balance sheets and invest in other opportunities.