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Evans’ new branch signals changes in Niagara County banking

LOCKPORT – Niagara County banking is on the verge of a shake-up.

Evans Bancorp planted its flag on Monday, when the bank opened its first-ever branch in the county, in Lockport.

More changes are coming.

The county’s leader in deposit market share, First Niagara Financial Group, is on track to be absorbed by KeyCorp. Once that deal goes through, Key will assume the No. 1 spot.

To satisfy the Justice Department’s anti-competitive concerns about the deal, five First Niagara branches in the county will be sold, to Northwest Bancshares. With those purchases, Northwest will go from just one branch in the county to six. and take over the No. 2 spot in market share.

Hamburg-based Evans had its eye on opening a Niagara County location for some time. But the bank sped up its plans in light of the Key-First Niagara deal, spotting a chance to capitalize on “market disruption,” said David J. Nasca, Evans’ president and CEO.

Now Evans’ challenge is to build brand recognition in a market in flux. Just having the physical presence of a branch in the county should help the bank with its customer outreach, Nasca said.

“We emanate out from this office,” he said of the Lockport branch. “We don’t expect people to just fall in here.”

Evans added a bank branch to an office that its insurance subsidiary, the Evans Agency, already operated on a heavily traveled stretch of South Transit Road. Evans also brought in staff members with established banking connections the county. The building itself was once a Key branch. After acquiring a number of HSBC Bank USA branches, Key moved out two years ago, to combine operations at a location down the street.

The Evans branch – referred to as a “financial center” – is a new-style format that does not have a traditional teller line, but does have a “universal banker,” an employee who can handle multiple tasks for customers. Just inside the front door is an “interactive ATM,” where customers can talk to an off-site Evans employee via a video screen, even after traditional business hours.

First Niagara’s planned sale will usher in a symbolic change in Niagara County’s banking scene. First Niagara traces its roots to Niagara County, where it was formerly called Lockport Savings Bank. One of the branches Northwest will buy, on East Avenue, was Lockport Savings Bank’s onetime headquarters. Lockport Savings Bank later moved its headquarters to neighboring Pendleton, and had changed its name to First Niagara by the time it moved its headquarters again, to Larkinville.

The Federal Deposit Insurance Corp. listed seven banks with locations in Niagara County, with a combined $2.5 billion in deposits. That is a sliver of the roughly $37 billion in deposits divided among banks in neighboring Erie County, but competition for the deposits is changing nonetheless.

An analysis of the branches Northwest will buy illustrates how the Justice Department sought to maintain competitive balance in Niagara County, as Key awaits approval of its deal for First Niagara.

Right now, Key and First Niagara control a combined 64 percent of the county’s deposit market share. First Niagara leads with 43 percent, followed by Key’s 21 percent, according to Federal Deposit Insurance Corp. data.

After separating the deposits at the five branches that will be sold to Northwest, a combined Key-First Niagara would have 44 percent deposit market share in Niagara County, nearly the same percentage First Niagara now controls on its own.

Northwest’s share would leap to No. 2 with 21 percent, basically the same share that Key has now. Northwest currently ranks No. 6 in the county, with just 0.76 percent.

The percentages are based on a snapshot of data from June 30, 2015, the most recently available figures from the Federal Deposit Insurance Corp. The numbers could have changed since then, and might change more as the Key-First Niagara deal moves toward completion.

Lockport Town Supervisor Mark Crocker said increased banking competition will benefit the county’s business and tax base. He noted his predecessor, Marc Smith, supported an initiative aimed at encouraging Niagara County residents to spend more of their money within the county’s boundaries.

“As people like Evans Bank come into our community, commercial loans become more available for local businesspeople to set up operations in the Town of Lockport, and that of course creates opportunity for jobs, and it helps our sales tax program in Niagara County,” Crocker said.