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Banks are on a branch-building rebound in Philadelphia suburbs

If you live or work in the fast-growing area of Delaware County where Routes 322, 1, and 202 come together, banks want your business.

If you live or work in the fast-growing area of Delaware County where Routes 322, 1, and 202 come together, banks want your business.

Since July 21, Bank of America, Malvern Federal Savings Bank, and WSFS Bank have each opened a branch there, and Citizens Bank is scheduled to open one Thursday.

The openings are part of a rebound in Philadelphia-area branch-building this year, as banks pursue their lifeblood - deposits - despite the stubbornly slow economy and continued troubles with borrowers behind on payments.

"They are a little bit flush in deposits now, but they might not be in three years," said Richard M. Wright, executive vice president for retail banking at WSFS, of Wilmington, which plans to open six to nine branches in Delaware and Chester Counties by the end of 2012.

Bankers said the widespread shift to online bill payment and other electronic transactions has not eliminated the need for a physical presence in high-traffic areas, though one local bank is experimenting with a model that eliminates the teller line.

Overall, banks have opened 19 branches in the eight-county Philadelphia region so far this year, while closing nine, for a net gain of 10.

During the same period last year, banks opened seven branches and closed 28, for a net loss of 21, according to an Inquirer review of federal and state regulatory filings.

More are on the way: Banks have received regulatory approvals for an additional six branches and filed applications for four more.

Most of the openings have been in Philadelphia's Pennsylvania suburbs. Five branches opened in South Jersey, and two opened in Philadelphia, including one by TruMark Financial Credit Union.

Bucks County had the largest number of openings, with six, spread from Langhorne and Yardley to Telford and Doylestown.

In Delaware County, by contrast, activity has been concentrated in the Concordville-Glen Mills area, where the Brinton Lake and Concordville Town Center shopping areas are drawing heavy traffic.

"The population is growing there. You've got a lot of commercial building that's going on there," said Ron Anderson, president and chief executive officer of Malvern Federal Savings Bank, which on Sept. 15 opened its eighth branch, next to a Wawa on Route 1.

Three townships in western Delaware County - Bethel, Concord, and Thornbury - were among the dozen fastest-growing in Philadelphia's Pennsylvania suburbs from 2000 to 2009, adding 11,874 people, according to U.S. Census Bureau estimates.

Banks have noticed. The number of branches in the area has increased to 13, counting the Citizens branch opening this week, from six in 2000. The difference is even bigger, considering that WSFS last month moved from a small branch in a now-closed Genuardi's to a full-size branch nearby.

WSFS, which has $3.8 billion in assets, hopes to open a branch in West Chester next month and in December plans to start building a branch in Edgmont on a site Eagle National Bank was going to use for a branch, but decided was too expensive.

WSFS's accelerated move into Delaware and Chester Counties is designed to take advantage of disruption at larger regional and national competitors, said Wright, the company's head of retail banking. "We think there is just great opportunity for a bank of our size and service model," he said.

The largest holder of deposits in the region, Wachovia Bank, has no changes in the works for its local branch network, a spokeswoman said.

TD Bank, with the second-largest share, expects to open branches in the Roxborough section of Philadelphia and in Medford by the end of next year, a spokeswoman said.

On Thursday in Concordville, Citizens Bank of Pennsylvania expects to open its first new branch in the region since 2008. Last year, the subsidiary of Citizens Financial Group Inc., of Providence, R.I., closed eight branches in the region and combined three with other branches.

John Zugschwert, a Citizens senior vice president who analyzes where to build branches, said he considered an area's growth, how other banks are doing there, and Citizens' presence nearby.

It is important to be convenient and highly visible, which is why Citizens keeps building traditional, full-size branches, said Zugschwert. "You do achieve top-of-mind presence."

The First Savings Bank of Perkasie is trying a different approach. The Bucks County bank opened a branch Sept. 23 that measure 1,500 square feet - less than half the new Citizens branch - and has no teller windows.

Instead, the desks typically on the periphery of traditional branches are center-stage and supplemented by private offices. Frederick E. Schea, the bank's chief executive, said the branch, the bank's ninth, was designed for a world in which customers do transactions over the Internet.

"When they walk in, they have something they want to go over," he said.