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Small Rochester bank sees opportunities in market disruption

Canandaigua National Bank and Trust’s president and CEO sees a chance for his bank to grab more market share, based on two developments involving three other banks serving upstate New York.

Frank H. Hamlin III, president and CEO said in a letter to shareholders that the developments “could disrupt our local economy, yet could be another opportunity for our institution.”

The first was KeyCorp’s planned acquisition of First Niagara Financial Group.

“This, if allowed to go through by regulators, is likely to result in the loss of decent-paying jobs in our market,” he wrote. “However, this provides us with the opportunity to obtain an influx of deposit and lending relationships resulting from the market disruption, similar to what occurred with the departure of HSBC several years ago.”

The second development involved “recent public sabre-rattling by activist shareholders of Financial Institutions Inc.,” the Warsaw-based parent company of Five Star Bank.

Last December, a Texas-based shareholder urged Financial Institutions’ board to stop making acquisitions and sell itself to a larger bank. Following on those comments, Peter Humphrey – formerly the CEO and still a shareholder – advocated for exploring a sale.

“This creates disruption within our market, which we will take advantage of in order to increase our market share from a deposit and lending standpoint,” Hamlin wrote in reference to the shareholders’ remarks.

“That being said, a greater number of responsible lending institutions in our region will provide greater opportunity for access to credit,” he added. “This produces more economic activity, more jobs, an expanded tax base, and overall expanded opportunities for those who live in our community.”

Canandaigua National Bank is centered in the Rochester area, with branches in Ontario and Monroe counties.

In his letter to shareholders last year, Hamlin made news when he criticized government legal action against two community banks. While he didn’t name the banks, he seemed to be talking about Hamburg-based Evans Bank and Five Star.

In this year’s letter, Hamlin said his bank was “committed to educating our legislative and agency representatives to the unintended consequences of their actions in both their legislative and regulatory capacities.”