When Webster Financial Corp. opens a commercial loan office next month in White Plains, N.Y., it will be looking to capitalize on steady deposit growth in Westchester County ”“ even as Hudson River-region banks build on their own successful incursions into Webster”™s home turf of Connecticut.
Webster Bank will initially employ between 10 and 15 people at its new commercial loan office, following a fiscal year in which it collected an additional $19 million in Westchester County deposits, a 7 percent gain that gave it $272 million.
“We continue to see opportunity for us to gain market share in both small business (lending) and the middle market,” said Jerry Plush, chief financial officer of Webster, in the company”™s third-quarter conference call with investment analysts. “Soon you”™ll start to see ”¦ (those) numbers rising.”
Two counties are different worlds
If Webster Bank”™s 17th-ranked deposit market share in Westchester pales next to the No. 2 position in Connecticut it enjoys after Bank of America Corp., Webster”™ regional president Brendan Sachtjen expects the commercial loan office to help boost his company”™s overall Westchester presence. Sachtjen, who lives in Westchester and works in Fairfield County, says despite the counties”™ similar demographics, they have very different profiles on the commercial lending front.
“They are border to border, but they are separate and distinct ”“ really different worlds,” Sachtjen said.
Even as Webster builds its franchise in Westchester, the Waterbury-based company lost ground in Fairfield County, where Paramus, N.J.-based Hudson City Savings Bank and Yonkers, N.Y.-based Hudson Valley Bank embarked on successful forays, ranking tops respectively in Fairfield County for market share gain and percentage gain in deposits.
Hudson Valley Bank CEO Jim Landy said the company”™s growth there is consistent with its goal of being known as “Connecticut”™s local bank” in his words ”“ even if the company”™s very name gives it a distinctly New York accent.
“We”™re a local community bank in everything that we do,” Landy said. “Even though we”™re a good size, we are not the Citibanks, the Chases or the Websters of the world. The mega-banks like (Bank of America) and such, they are in and out of the market on those kinds of things. The pendulum swings back and forth on whether they want to be in the small business arena, and in six months they might change their mind.”
In their combined franchises in Westchester and Fairfield counties, both Hudson Valley and Webster have a ways to go, ranking ninth and 10th respectively. JPMorgan Chase & Co. remains the market leader with some $12.3 billion in deposits; of banks based in either county, Bridgeport-based People”™s United Financial Inc. is tops with $5.7 billion in deposits, good for fourth.
People”™s United pushes into Long Island
Even as People”™s United has broken into the Westchester market the past few years with new branches, the company elected to buy its way onto Long Island via the pending acquisition of Smithtown Bancorp Inc. Smithtown Bank originally drew interest from three banks last spring after approaching 14 companies in New York and New England, according to merger documents filed with the U.S. Securities and Exchange Commission. One bank pulled out of the bidding over concerns over Smithtown Bank”™s loan portfolio; another did as well citing a change in strategic thinking, leaving People”™s United with the winning bid.
FDIC does not publish market share for loans, producing only aggregate loan data for individual banks across all geographies, and for varying groups of banks at the state level. Even as Connecticut and New York banks eye each other”™s territory in the borderlands of Fairfield and Westchester counties, The biggest question for all may be the degree to which demand for commercial lending bounces back ”“ with Sachtjen admitting that equation has been impacted by the balance sheets of prospective borrowers.
“If you are doing well, or better than well, 10 banks will come to your office tomorrow to talk about a loan,” Sachtjen said. “If you are on the other side of that curve where you are losing money, ”¦ people aren”™t going to beat a path to your door.”
