The news: In the next five years, BMO will open more than 130 new branches in California and about 15 in Arizona. This year, it will open three in Greater Los Angeles, two in the San Francisco Bay Area, and two in San Diego.

Zoom out: BMO’s new branches are part of the changes to its branch network announced last October. At the time, the bank said it would sell 138 branches, mostly in the Mountain West and Midwest, to First Citizens Bank. The changes to its network concentrates BMO’s exposure in California even further: In 2023, BMO acquired more than 500 branches with its purchase of California-based Bank of the West.

Trendspotting: Banks are redesigning physical branches around customer habits and preferences. Some are selectively opening or renovating branches while closing others as they adapt branch footprints to their target markets. Some are growing their footprints overall, while others are cutting.

• PNC is spending $2 billion on more than 300 new or renovated branches through 2030 and hiring 2,000 people to support them.
• JPMorgan Chase plans to open 500 new branches through 2030, and Bank of America plans to open 150 by the end of 2027.
• Wells Fargo planned to renovate more than half of its branch network by the end of 2025 and more in 2026.
• TD Bank will close 15 branches across 13 states where it already has a dense branch network as its customers continue to shift to digital banking.

Implications for banks: Branches should raise a bank’s brand awareness in a community. To maximize their value, financial institutions must focus less on transactional banking services and tailor their footprint density to the community’s actual branch use. Overall, banks need to focus more on services that digital channels execute poorly, like financial advice—particularly wealth management—or the origination of complex banking products.