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Banking landscape changes

Rochester Business Journal
October 5, 2012

Roughly a decade ago, M&T Bank Corp. ranked No. 4 in the region with a 10.5 percent market share and roughly $1.8 billion in deposits. This week it emerged as the leader-by a wide margin.
The departure of HSBC Bank USA N.A. from Upstate New York has changed the local deposit landscape, leaving M&T Bank with twice the market share of its nearest competitor.
M&T has more than $3.6 billion in local deposits and a 23.6 percent share of the $15.3 billion total in the Rochester market, data released this week by the Federal Deposit Insurance Corp. show.
The local market includes Monroe, Genesee, Livingston, Ontario, Orleans and Wayne counties.
Total deposits in the region are down 2.7 percent from $15.8 billion last year. The number of branches also declined, to 291 from 298.
JPMorgan Chase Bank N.A. has moved into second place with deposits of $1.7 billion and an 11.3 percent share. Canandaigua National Bank & Trust Co. is third at $1.6 billion and a share of 10.7 percent.
The data are as of June 30, six weeks after First Niagara Bank N.A. closed in mid-May on its acquisition of 195 HSBC branches upstate and in Connecticut.
First Niagara added 12 branches in the Rochester market as a result of the deal, giving it 29 here. Five First Niagara branches and four HSBC branches in the area were consolidated into nearby branches.
The FDIC numbers do not include the subsequent sale of 27 First Niagara and HSBC branches in the Rochester market to KeyBank N.A., Community Bank N.A. and Five Star Bank from June through September.
Because of that, HSBC is listed sixth in Rochester with local deposits of nearly $883.7 million and a market share of 5.8 percent. With those moves factored in, First Niagara's deposits likely would decrease and deposits at KeyBank, Community Bank and Five Star would increase.
The HSBC purchase lifts First Niagara to fifth in the market with deposits of $1.5 billion and a 9.8 percent share. The Buffalo-based bank was 10th a year ago with $540 million in deposits and a share of 3.4 percent.
"We have always believed that the Rochester market has significant potential for First Niagara and is a great fit with our relationship-based business model," spokesman Oliver Hays said.
"We are pleased to have expanded our presence in the Rochester market and are positioned to become an even more prominent player."
RBS Citizens N.A. is fourth on the FDIC list this year with deposits of nearly $1.52 billion.
M&T, after competing neck-and-neck in recent years with HSBC for Rochester market leadership, increased its deposits by 19 percent.
"We're a strong bank with a strong branch network with a commitment to Rochester," said Daniel Burns, M&T's regional president here. "The hard work of our people, and working as closely as we can with the customers that maybe wanted to look for another institution, really helped to drive the numbers for us."
M&T was second last year to HSBC, with a market share of 19.24 percent versus HSBC's 19.32 percent. The M&T figures for both years exclude mail-order certificates of deposits at its branch in Oakfield, Genesee County.
"As bankers, we love numbers," Burns said. "It's an interesting analysis, especially if you compare the FDIC data year over year.
"It is really a snapshot of the deposit market here, and just one day, but there's been four or five banks changing hands in the last year or so here. It's reflective in the numbers here. We feel like we've been able to take advantage of the disruption."
M&T attributes much of its $584 million increase in local deposits to First Niagara's acquisition of HSBC branches. It implemented an extensive marketing campaign to draw potentially disgruntled customers away from First Niagara and HSBC.
"I think a dramatic amount was related to HSBC," Burns said. "The other thing that's important to note is we're still a bank that offers free checking, and our product set is very competitive.
"Our average tenure of employees is 11 years. With that stability and that product set, we were able to take advantage of the disruption. It did account for the significant increase in deposits."
For JPMorgan, the No. 2 ranking was its highest in the market since a four-year stretch in that spot ended in 2005. Its local deposits are down 2.4 percent from $1.78 billion last year.
"We're not going to outdo some of the banks that have a plethora of branches around here," said Malcolm Wolcott Jr., JPMorgan's upstate regional president. "But we're seeing growth organically, across our commercial banking business and our business banking business and our consumer bank business."
Wolcott declined to comment specifically on the impact of the First Niagara deal.
"Anytime there's a change in banking locally, customers are going to be looking for other banks to work with," JPMorgan spokesman Michael Fusco said.
"On the consumer side, even though we only have 28 branches in Rochester, they have made a significant change in culture," Wolcott said. "If you were to poll our customers over the last year, we've been able to change that culture to ensure that our customers are getting the right products and services to meet all their financial needs."
Deposits at CNB are up 8.9 percent from $1.5 billion in 2011 as it continues its expansion into Monroe County.
In Monroe, M&T has deposits of nearly $3.4 billion, a 31 percent market share, up from $2.8 billion and 25 percent. JPMorgan ranks second in the county at $1.6 billion and a share of nearly 15 percent. RBS Citizens is third at $1.3 billion and 12 percent.
First Niagara is fourth at $1.2 billion, and CNB is fifth at $823.7 million.

10/5/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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