I was both shocked and dismayed Tuesday morning when a short article in my local Sacramento newspaper informed me about Chase’s latest plans to open about 175 new branches nationwide – 80 of which are planned for California.

According to the article, “the bank hopes plain-vanilla lending will fuel its future growth.”  While the term “plain-vanilla lending” wasn’t clarified, I assume it means making mortgage, auto, equity, and credit card loans to millions of the state’s residents.

But who really needs 80 new Chase Bank branches in California?

It’s not as if the state’s population is growing that rapidly.

During the past decade, California’s population increased by 10%, the slowest in the state’s history.  In 2008, the state’s population growth slowed to a 1.1% increase.

So where will Chase get the loan customers needed to make these new branches viable?

Most likely they’ll attempt to take them from the community banks and credit unions already serving the state’s residents.

Or will they?

What if these folks refuse to switch banks?

I simply can’t see many Wells Fargo, Citibank, and Bank of America customers switching to Chase.  If these folks decide to switch banks you’d think they’d make the move to a community bank or credit union where the prices are lower and the service better.

As far as I can tell, we don’t need another bank branch in this state.  In fact, most likely we could get by just fine with fewer branches cluttering the landscape.

As more consumers embrace online and mobile banking, the need for visiting a brick and mortar branch goes away.

As for “plain-vanilla lending,” the loan products in question are readily available from any number of non-bank lenders.  And local community banks and credit unions are excellent options as well.

After reading the article it hit me…perhaps senior management at Chase is more interested in besting its biggest competitors than serving more Californians.

How did I reach this conclusion?

The short article goes on to tell readers that Chase currently has about 5,510 branches in the U.S., up from about 5,270 a year ago.

Meanwhile, Bank of America, while closing branches, still has about 5,700 branches.  This number was roughly 5,860 at the beginning of 2011.

San Francisco-based Wells Fargo is currently the mega-bank leader with 6,240 branches – helped along by its acquisition of Wachovia in 2008.

Could this be about branch supremacy?

Here’s the data for the California market as of the end of 2011:

Visiting the iBanknet.com website I was able to determine that as of the end of 2011 there were right at 7,244 bank branches in California which means the four mega-banks have 45% of the branches and 57.50% of the deposits.  It reminds me of an oligopoly.

Perhaps Chase’s senior management has its eye on the branch count?

After all, Chase is not that far behind BofA and Wells.

It just seems like a reckless decision to be spending hundreds of millions of dollars opening new branches in a state that is suffering a slowdown in population growth while duking it out with Illinois as the country’s most mismanaged, poorly-run state.

What am I missing here?

Oh yeah, being one of the nation’s four “too big to fail” mega-banks means senior management can make decisions like this without worrying about the consequences down the road.

This puts Chase on a totally different playing field than that occupied by the nation’s thousands of community banks and credit unions.