Do banks not like us anymore?

Bank of America, Bank of Albuquerque, First Financial, and U.S. Eagle have all moved or closed Downtown branches in recent years.

They say it's part of a larger digitization trend, which COVID is accelerating.
Bank of Albuquerque once had a large branch in the Albuquerque Plaza Building - the tallest of the Downtown core's towers. Then it moved to a small branch across Tijeras from Civic Plaza. Now, all that's left is an ATM.
Before the pandemic, the exodus was at least harder to notice.

Bank of America closed its branch at 3rd and Roma in 2015, but made it known that the drive-through branch at 6th and Lomas would stay. Soon enough, however, that too was closed. Bank of Albuquerque, meanwhile, moved from expansive digs in the Albuquerque Plaza Building - a spot that came with it the most prominent sign in town - to a relative hole-in-the-wall at 4th and Tijeras.

That didn't last too long either. Six months into the pandemic, they announced that the branch would close altogether. First Financial Credit Union, which had a branch and its corporate headquarters at 6th and Tijeras for 38 years, announced a move to Renaissance in 2019, then completed it last December. U.S. Eagle, which had taken Bank of Albuquerque's place and put up a prominent sign of its own in 2015, announced recently it would decamp to a new building going up at Avanyu Plaza, the development southeast of the 12th and Menaul roundabout.

In total, at least five bank branches have closed or moved in the last six years, leaving only ten in greater Downtown (our count is detailed below). That's still a decent complement of banks, to be sure, but the trend is clear enough: More and more, we're left with only ATMs.

So what gives?

It's nothing personal, say the banks. The way we all manage our cash has just changed pretty dramatically in the last couple of decades - more still in the last year - and not in ways that are likely to bring cheer to fans of nearby in-person banking.

The origin story
For many decades banks played an especially prominent role in downtown areas everywhere. You could still find branches in outlying neighborhoods and suburbs, but the city center was where the real action was. Thousands of workers streamed in every day, and they all needed to cash paychecks, make withdrawals, and conduct other routine transactions. All those businesses they worked for had their own frequent banking needs - some even paid a daily visit, particularly if they had cash deposits to make or wire transfers to arrange.

Demand for routine banking services, in short, was huge and conveniently concentrated in downtown areas like ours. So for entirely rational reasons, banks opened sprawling branches at the bases of office towers and made sure to put their names up at the top of them. You can still see this model at work Downtown with BBVA Compass, New Mexico Bank and Trust, and Wells Fargo.

Those who lived in city centers or in surrounding neighborhoods, meanwhile, were spoiled for choice. Every bank worth its salt wanted to locate nearby, even if the banking business of those nearby residents wasn't the main prize.

"We're not serving rooftops in a Downtown area," said Linda Cooper, the director of consumer delivery for Bank of Albuquerque's parent company. "You're serving businesses or people who work in that building, in that area."

That model started to break apart with the rise of digital banking, a trend that started a lot sooner than you might guess. Long before mobile deposits and online transfers became the norm for everyday consumers, banks rolled them out to their business clients, many of which were supporting those big downtown branches with all their routine in-person transactions.

Those businesses, in turn, adopted the changes with gusto. Cooper remembers commercial clients that used desktop scanners to deposit checks in the middle 2000s, a couple of years before the iPhone even came out. They generally loved it for a very simple reason: "It saved them time and money," she said.

Regular consumers were next, and while "adoption hasn't followed as strongly," Cooper said, plenty of us civilians are now banking on our phones and laptops and getting what cash we need - less and less all the time, in fact - from ATMs.

"People can do an awful lot of things that they used to do in a branch," said Ron Moorehead, the CEO of First Financial Credit Union.

Some people prefer the face-to-face method or just don't like the digital options, but increasingly, customers are using in-person banking mostly for non-routine transactions, he added. They'll cash checks with their phone at home, but if they need to talk about a loan, work through some complex paperwork, or get some advice, they'll show up in person.

Those factors have all conspired to lower the number of physical branches across the United States, and not just in downtown areas. The Saint Louis arm of the Federal Reserve reports that the country peaked in 2009 with 36 branches per 100,000 people, but as of 2017 it was down to 31, and the trend looks set to continue.

Then, 2020 happened
The Downtown banking equation was changing plenty fast before last spring, and the pandemic has only served to accelerate the larger trend. But at the same time, the particular contours of COVID have also opened a new line of attack on the viability of city center branches.

"U.S. Eagle has seen our members migrate from in-branch transactions to drive-through and to digital/self-serve transactions, which is a logical shift during a pandemic," said Nadine Buerger, the U.S. Eagle spokeswoman.

That reality creates several problems for city center locations. Fewer in-person transactions of course mean even less demand for all that space. Moving to drive-through business spells trouble because many downtown branches don't have a drive-through. (Bank of Albuquerque even cited the lack of one as a factor behind its closure of the 4th and Tijeras branch in this DAN from last August). But even if a drive-through exists, there's still the problem that there are fewer commuters these days, a trend that may continue even after the pandemic. And for most Albuquerque residents, Downtown is not a terribly convenient place to drive to compared with, say, the exact spot where U.S. Eagle moved its Downtown branch.

"Many of our members have started interacting with the credit union closer to their homes, and this new location is more convenient for many people living in northwest Albuquerque, especially since it is right off I-40 at Menaul and 12th," Buerger said. "I don't think we should ever count Downtown Albuquerque out, but at this time, with the unique conditions of both our Downtown location and general pandemic and projected post-pandemic behaviors, this move is best for our credit union."

The road ahead
The trend toward fewer branches seems set to continue, though it's not guaranteed to be a fast one. Particularly in New Mexico, "there's some that will go to their grave wanting to do their banking in a certain way," Moorehead said.

And the more complicated business that people still prefer to do in person has held steady, meaning some physical branches at least are likely to stick around come what may.

"What we have not seen is a decrease in our in-branch interactions for things like new accounts, loans, and issues like fraud mitigation," Buerger said. "We believe this will persist beyond the pandemic."

Some banking might move toward smaller centers that blur the line between automated and in-person service. That could mean some kind of supercharged ATM where customers take care of routine matters themselves or alternately start a video conference with a far-off representative - an idea that is also being tried out with car rentals.

And then there are banks that will locate in greater Downtown because there's demand. Maybe not the same demand they saw in 1995, but demand nonetheless.

Moorehead, for one, hasn't given up. Shifting the First Financial headquarters to Renaissance meant some much-needed extra space, and he no longer has to spend $100,000 per year on employee parking, as was the case at 6th and Tijeras. But he'd still like to have a branch here.

"We do want to be back Downtown - I just don't know exactly when," he said. The old Bank of America at 6th and Lomas was out of their price range, he added, but they're still looking.

"I'd give up on the drive-through if I can have decent parking, but I'd like to have a drive-through," Moorehead concluded. "That's just how Albuquerque is at this point."
Help us track the decline of in-person banking
Above is a map of every single physical bank branch in greater Downtown (to the best of our knowledge), as defined by I-40, the river, Huerta/Chávez, and I-25. The goal is to set a baseline that we can use to track branch comings and goings over time, so if you know of a branch we missed, please tell us.
Downtown Albuquerque News covers greater Downtown, which we generally define as the area created by I-40, the Rio Grande, and the railroad tracks. We publish weekdays except for federal holidays. If someone forwarded DAN to you, please consider subscribing. To subscribe, contact us, submit a letter to the editor, or learn more about what we do, click here. If you ever run into technical trouble receiving DAN, click here.
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