As KeyCorp pursues its $4.1 billion purchase of First Niagara Financial Group, a much smaller bank hopes to cash in on the deal.
Hamburg-based Evans Bancorp has rolled out billboards at three locations playing off the planned sale. A newspaper-style headline blares, “Local Bank Sold.” The word “Bank” is crossed out and replaced with “Customers.” The ad also states, “Better or bigger – you choose.”
The billboard doesn’t mention Key or First Niagara by name. But the implication is clear: Evans hopes to scoop up First Niagara customers who prefer a smaller bank as Key prepares to grow larger.
“Our feeling is, we need to be recognized as a viable alternative, so we needed to get some advertising out there,” said Kevin C. Brady, vice president of marketing for Evans.
Evans is also launching a radio spot on about 10 stations, featuring President and CEO David J. Nasca talking about the trend of bank mergers and Evans’ local connections. Evans spent under $100,000 on the billboards and radio spots, Brady said.
While Evans is making a push now, Key and First Niagara do not expect their deal to close until the third quarter of 2016. Until shareholders and regulators approve it, the two banks will operate independently.
Banks are eager to capitalize on moments such as this, when customers of a bank being sold might be open to moving their accounts elsewhere. Plus, it’s expected that Cleveland-based Key, which already has a large local presence, will have to sell some area branches to satisfy anti-trust concerns.
Customers probably won’t make decisions about moving accounts from one bank to another at this time of year, but Evans wanted to build awareness amid the attention on the Key-First Niagara deal, Brady said.
Evans plans follow-up ads next year and doesn’t expect to be alone in trying to lure customers impacted by the deal.
And for good reason: In the Buffalo Niagara region, First Niagara had deposit market share of 26 percent, equal to $10.3 billion, according to June figures from the Federal Deposit Insurance Corp. Evans had market share of less than 2 percent, while M&T had 51 percent, and Key had about 9 percent.
Evans launched a similar ad campaign when HSBC Bank announced that it was selling its upstate branch network. Evans’ message was slightly different then, since it wasn’t yet known who would acquire the HSBC branches.
First Niagara, KeyBank, Community Bank and Five Star Bank each bought pieces of HSBC’s upstate branch network. But other bank said they picked up additional business stemming from the sale, even without buying branches.