Midwest Banks Race to Expand Footprints in Southeast

Midwest banks are migrating as fast as they can in the same direction that people have been moving in the past year, to the Southeast.

According to a report released last month by the U.S. Census Bureau, the South accounted for 87% of the population growth in the United States in 2023, with the region adding 1.4M residents last year. That includes Texas, which added another 470K residents, but nearly 1M people moved to the Southeast.

Florida, with almost 23M people, is now the third-largest state by population. Georgia (11M) and North Carolina (10.8M) have joined the top 10, surpassing Michigan and New Jersey. Virginia (8.7M) and Tennessee (7.1M) are now in the top 15.

Florida and South Carolina are two of the fastest-growing states in the U.S. Ten of the 15 fastest-growing large cities in the U.S. by population are in the Southeast.

Several Midwest banks are pursuing aggressive growth strategies in the Southeast. Cincinnati-based Fifth Third Bank disclosed in a call with financial analysts last week that it is planning to open 31 new Southeast branches this year, including 25 branches in South Carolina.

Fifth Third is pursuing a strategy that will divide its portfolio 50/50 between the Midwest and Southeast within the next five years. The Ohio bank has opened 110 branches in the Southeast in the past four years, including 37 last year.

The Southeast portfolio of Fifth Third, a regional bank with about $215B in assets, now includes a total of 330 branches in North Carolina, South Carolina, Georgia, Florida and Tennessee. The bank is planning to increase its Southeast workforce, now totaling 3,200, by 15%.

In November, Indiana-based First Financial announced it was buying Tennessee-based SimplyBank in a $73M cash transaction. SimplyBank, with $702M in assets, has 10 Tennessee branches and three Georgia.

The acquisition expands First Financial’s footprint into Georgia for the first time and doubled its footprint in Tennessee, where it has nine branches.

The Indiana bank, which has nearly $5.5B in assets, first entered the Volunteer State in 2019 when it acquired HopFed Bancorp, headquartered in neighboring Kentucky.

Bank of America is expanding in Louisville, KY, Birmingham, AL and Huntsville, AL, with five new branches expected to open in Louisville and one in Birmingham in 2024. BOA also plans to open four additional branches in Birmingham by 2026.

TD Bank announced last year it would target South Florida, North Carolina and Atlanta in an expansion of its branch network planned through 2027.