Yadkin Bank to pilot smaller branch

Yadkin Bank could become the latest lender to cut costs through smaller branches.

The Raleigh-based lender, which has operations in Charlotte, plans to open a 1,000-square-foot branch in Raleigh some time next year, Yadkin CEO Scott Custer told me Friday. The branch will be opened as part of a pilot project, and it's unclear whether Yadkin will open more of the small branches.

It's not unusual for banks to be experimenting with smaller branches these days. That's being driven by two key factors:

First, banks are trying to reduce costs as they struggle with weak revenue growth. Second, banks see less need for the large, expensive-to-run branches of the past at a time when consumers can do many basic banking activities on their phones and computers.

Bank of America and Wells Fargo are among big banks that have rolled out smaller branches in the past year and a half.

Yadkin represents a smaller bank taking a hard look at how it might reduce its branch costs as consumer habits change.

The bank's test branch will about one-third the average size of a Yadkin branch, which is 3,500 square feet. Custer said it will be staffed by two full-time employees and one part-time employee.

Smaller branches could allow the bank to operate less-expensive branches while also ensuring it has enough locations to provide convenience for its customers, he said.

Yadkin bank is part of Yadkin Financial Corp.

In July, Elkin-based Yadkin Financial Corp. merged with Raleigh-based VantageSouth Bancshares, forming North Carolina's largest community bank.

The merged bank holding company kept the Yadkin Financial Corp. name.

Custer, who was VantageSouth's president, became CEO of the combined company.