|
|
|
The Telegram
  • Withdrawal of banks from region 'nothing to panic over'

  • With the transition of local Bank of America branches into Berkshire Banks taking place this week, the region is left without any major national banking presence.
    What does that say about a region that is bracing for a potential economic boon of nanotechnology, cybersecurity and drone testing?
    • email print
    • Chart of area banks
      ONEIDA COUNTY

      Bank name and number of branches
      Adirondack Bank: 8
      Berkshire Bank: 15
      Community Bank: 2
      First Niagara Bank: 7
      Key Bank:...
      » Read more
      X
      Chart of area banks
      ONEIDA COUNTY
      Bank name and number of branches

      Adirondack Bank: 8

      Berkshire Bank: 15

      Community Bank: 2

      First Niagara Bank: 7

      Key Bank: 2

      Manufacturers and Traders Trust Co.(M&T): 7

      NBT Bank: 7

      RBS Citizens: 4

      Oneida Savings Bank: 5

      Woodforest National Bank: 2

      Credit unions and Number of Branches

      Access Federal Credit Union: 3

      AmeriCU Credit Union: 3

      First Source Federal Credit Union: 2

      GPO Federal Credit Union: 2

      Mohawk Valley Federal Credit Union: 2

      Oneida County Federal Credit Union: 1

      Rome Federal Credit Union: 1

      Rome Teachers Federal Credit Union: 1

      Special Metals Federal Credit Union: 1

      UMICO Federal Credit Union: 1

      Utica District Telephone Employees Federal Credit Union: 1

      Utica Gas and Electric Employees Federal Credit Union: 1

      HERKIMER COUNTY

      Bank and Number of Branches

      Adirondack Bank: 5

      Community Bank: 1

      Manufacturers and Traders Trust Co.(M&T): 5

      NBT Bank: 2

      RBS Citizens: 1

      Woodforest National Bank: 1

      Credit union and Number of Branches

      AmeriCu Credit Union: 1

      First Source Federal Credit Union: 1

      GPO Federal Credit Union: 1

      Remington Federal Credit Union: 1
      Sources: Federal Deposit Insurance Corp. and Credit Union Association of New York
  • Where have all of the big banks gone?
    With the transition of local Bank of America branches into Berkshire Banks taking place this week, the region is left without any major national banking presence.
    So, what exactly does that say about a region that is bracing for a potential economic boon of nanotechnology, cybersecurity and drone testing?
    Not too much, said Zhaodan Huang, associate professor of finance at Utica College.
    "Just like when HSBC left, it's nothing to panic over," Huang said. "I don't see it having a huge impact. ... We don't have the large-sized businesses that they make their money off of, and what we do have can be handled better by local banks."
    Huang said any major business coming into the area simply would carry over whatever banking relationship it already had.
    He also noted a trend has been emerging since the financial crisis of 2008 in which major financial institutions such as Bank of America are pulling out of smaller areas that usually are more personal savings and loans-oriented, and focusing on mid- and major metropolitan areas where greater profits can be made.
    Judith Cowden, vice president of member relations and marketing for AmeriCU Credit Union, said the departure of national banks is not only a benefit to her organization, which has seen an 11 percent growth in membership over the past 24 months, but is good for consumers as well.
    "If you go on the web and look at Chase or Bank of America and look at their rates, they're not competitive," Cowden said. "The financial institutions like us who remain, understand the local market and are dedicated to the area."
    Cowden said AmeriCU's membership, which stands at more than 100,000 across 18 Upstate New York branches, has increased even more since the Bank of America sale was announced in July, and that loan rates could be driven even lower as the local institutions battle for customers.
    Tom Sinnott, president and CEO of Bank of Utica, which has more than 13,000 customers, welcomes the departure.
    He said that systemic banks are bad for the area.
    "They aren't focused on the area … and I believe we are stronger than they are," said Sinnott, whose family has owned and operated Bank of Utica since 1927.
    Sinnott said local banks have advantages over large corporate institutions, including being able to make quick decisions without being bogged down by red tape, and having the flexibility to be sensitive to customer issues.
    But not everyone feels that way.
    Vincent Cattat is worried that aside from the one Chase Bank branch on Main Street in Oneida and a handful of the British-owned Citizens Bank scattered throughout the area — which might soon be sold — regional and community banks and credit unions are all that remain.
    Page 2 of 3 - Cattat has been a Bank of America customer for decades and declined to switch his account to Berkshire when the Whitesboro location he banks at was sold.
    While he also maintains a personal account with First Source Federal Credit Union, he uses his Bank of America account for business purposes and to transfer money to his children in Florida.
    "Our local banks are good, but they are not known throughout the country," said the 67-year-old retiree who now will maintain his Bank of America account online. "What am I supposed to do when I'm traveling across the country and looking to access my bank? It's costing me money."
    The reach of local banks and credit unions might be a non-issue for some, however. AmeriCU, for example, is part of a 5,000-branch shared network that allows members to access accounts across the country and overseas. Bank of Utica is working on a similar international network that would allow for free ATM withdrawals later this year.
    Bank of Utica also has offered online banking for more than 15 years, and introduced a mobile banking application last year. AmeriCU is planning to overhaul its online and mobile platforms this year, and recently introduced high-tech self-banking kiosks at select locations.
    Huang said he expects to see the migration of large banks from small towns to big cities continue, and that the mutually beneficial trend will end up transforming the banking landscape of the country.
    "Maybe it's a smart move on their part," Huang said. "They put themselves in a better situation where they can make more money ... and the local and regional banks continue to expand and get healthy in areas like ours and become major players."
    Transition to Berkshire frustrates former Bank of America customers
    While the departure of Bank of America might not have a major impact on the economic viability of the area, it has caused some headaches for its former customers.
    Berkshire Bank announced in July that it purchased the 11 local Bank of America branches and set a deadline of Jan. 17 to switch everything over - including closing the Bank of America branches at 200 W. Dominick St. and 1714 Black River Blvd. in Rome because Berkshire already had some nearby locations.
    While some local banking experts believe Bank of America's departure signals an abandonment of smaller markets for higher commercial profits in larger metropolitan areas, spokesman T.J. Crawford attributes the move to meeting customers needs.
    "It's a reflection of the changing habits of our customers," said Crawford, who pointed out that the sale to Berkshire does not include things such as mortgages, corporate accounts and credit cards. "We constantly adjust our branch networks to fit our customers' needs … whether that be consolidating, opening new locations, or in this case, selling to ensure jobs are retained."
    Page 3 of 3 - The transition has required traditional banking customers who had checking and savings accounts, and IRAs and CDs with Bank of America to receive new account and routing numbers if they decide to switch to Berkshire, and has left some customers frustrated.
    Lou Papale had been a customer of the Bank of America branch on Mohawk Street in Utica since it was a Fleet Bank decades ago, and has somewhat begrudgingly decided to switch to Berkshire since the location is so close to his home.
    "I didn't have much of a choice in the matter," said Papale, who was filling out paperwork and notifying everyone to whom he makes automatic payments. "It's been an unnecessary burden on the customer. I think they should have gotten together and figured out a better way to transition all of this."
    Berkshire Marketing Officer Ray Smith said that the Massachusetts-based bank that maintains 74 branches throughout its home state, New York, Vermont, Connecticut and Tennessee, is doing all that it can to make the transition process "as seamless as possible."
    "Unfortunately that's a part of the conversion process," Smith said of the changing of account information. "But we are very pleased to be in the position to expand our footprint … and feel we have what it takes to provide a full-service experience to these customers."
    Follow @OD_Vanno on Twitter or call him at 792-5074.
        • »  EVENTS CALENDAR