Store-Based Branch Banks Remain Popular

Josh Carlson sees good reasons for putting bank branches in grocery stores.

"You're getting a touch point with a customer that might not visit a brick-and-mortar location," said Carlson, senior vice president of retail banking for Peoples Bank, an Ohio-based holding company that has 14 locations in West Virginia.

Bank branches in grocery stores have been around since at least the 1900s in West Virginia. Peoples Bank has three such branches in the state. The New Martinsville and Vienna offices opened in 1990, and the South Parkersburg branch opened in 2000. All three are in Walmart stores.

According to data from the FDIC, West Virginia has at least 23 bank branches located in grocery stores. All but a few are in Walmart and Kroger stores. Nearly half are in the Charleston-Huntington corridor.

Sun Trust Bank and Wood-forest National Bank have the most store branches in West Virginia.

Woodforest has 10 offices in West Virginia. Its branches have about $11 million in deposits in the state. Sun Trust's six West Virginia branches have $107.1 million in deposits, or more than half of deposits in store bank branches in West Virginia.

Neither would respond to request for comment for this article.

Other banks with store-based branches, according to the FDIC database of branch bank deposits, include Clear Mountain Bank, United National Bank, Poca Valley Bank, Huntington National Bank, City National Bank and Ohio Valley Bank.

Altogether, store-based branch banks in West Virginia have about $190 million in customer deposits. One of the largest branches in terms of deposits, if not the largest, is the Sun Trust branch in the South Charleston Kroger store, with about $23.6 million in deposits as of June 30, according to the FDIC.

The advantages for banks are twofold. Leasing space in a grocery store is less expensive than building a free-standing branch. And large, popular stores such as Walmart and Kroger offer a significant amount of foot traffic that can bring exposure for a banks brand.

Nationally, the judgment on store-based branches has been mixed. Some banks are exiting the market, while other large banks are moving in.

Store-based branches offer the same services that freestanding locations do, Carlson said.

People who work at the store-based branches offer insurance, investment, mortgage, loan, business banking and commercial banking services, he said.

"The strategy that we have is convenience for customers," Carlson said. "We run them as full-service banking centers."