At a time when share buybacks are hitting record levels, J.P. Morgan Chase CEO Jamie Dimon said he'd rather put the money to work in other ways.

In an interview Monday with CNBC's on "Squawk Alley," the head of the largest U.S. bank by deposits said the institution's latest foray into Philadelphia is an example of a better way to deploy cash.

"I would prefer to spend that money not buying back stock but doing this," he said during the live talk in the City of Brotherly Love. "Growing our business is far better for the economy. Right now we don't have a lot of choices. But over time I really would prefer not to buy back stock."

The bank has announced it will open 50 new branches around Philadelphia, Delaware and southern New Jersey over the next five years. That's part of a broader agenda aimed at opening 400 new branches across the country, a move made as the total number of branches has declined about 9 percent since the financial crisis.

Bank officials said the program is a way to put to use the windfall from last year's tax cuts that slashed the corporate rate from 35 percent to 21 percent.

A good chunk of that money has been returned to shareholders this year, with S&P 500 companies on track to execute more than $1 trillion in share repurchases by the end of the year.

While Dimon said that's not his main focus, he also said it's wrong to demonize buybacks.

"Companies should do what makes sense," he said. "I also don't buy this argument that it's bad. Buying back stocks is simply giving it back to you as an investor who redeploys it to a better use. It's redeployment of capital that should be redeployed if a company can't use it. My druthers is always to grow our business."

WATCH: CNBC's full interview with JP Morgan's Jamie Dimon