Five Star Bank is seizing the moment.
The Warsaw-based bank will speed up its plans to open its first-ever branch in the city of Buffalo, at a time when the banking market is in flux with KeyCorp’s acquisition of First Niagara Financial Group.
Five Star has signed a lease and plans to open its location by year’s end in a former Key branch at 40-50 Fountain Plaza, the office complex formerly known as Key Center. Key moved the branch and regional offices out of the complex to 250 Delaware Ave.
“We have pivoted our branch development activities and accelerated our plan in Buffalo,” said Martin K. Birmingham, president and CEO of Financial Institutions Inc., Five Star’s parent company. “We have been concentrating on Rochester over the past several years and intended to get to Buffalo. But given what’s happened with this combination, we think the time is perfect to move into Buffalo, and, in this case, the city of Buffalo.”
Birmingham said he viewed the Fountain Plaza as “the heart of the financial commercial district,” with a mix of small businesses, hotels, retail space and professional service providers.
Five Star already has three branches in Erie County, with deposit market share of just 0.34 percent, according to Federal Deposit Insurance Corp. statistics from last year. But Financial Institutions sees the new branch as a way to bolster that total, and has taken other steps to make inroads. The bank acquired an Amherst-based insurance agency, Scott Danahy Naylon, and Courier Capital Management, which has offices in Buffalo and Jamestown.
Five Star needs regulators’ approval before the branch can open. But once the bank gets the green light, Five Star plans to use a “bank of the future” concept it has rolled out in Rochester. The bank refers to it as a “financial solution center.” The location won’t have a teller line, but will have a staff of “certified personal bankers” able to help customers with a variety of needs, as well as tech pods and mobile banking demonstrations.
About 10 to 12 people will work at the new branch. Some of the people working from there could be commercial lenders, residential mortgage lenders or other product specialists, but the bank is still making those decisions.
Other banks are also jockeying to attract new customers amid the “market disruption” expected to result from Key acquiring First Niagara. First Niagara was No. 2 in market share in the region, and Key was No. 3.
“This is, we think, probably a once-in-a-generation opportunity with the consolidation of the two banks with what will be KeyBank going forward,” Birmingham said.