Since Northwest Bank bought 18 First Niagara Bank branches last year, William Wagner, the bank's chairman, president and CEO, and other Northwest officials have walked Buffalo's neighborhoods to better understand the region where the bank was growing.
Northwest is based in the small city of Warren, Pa., and has some branches in places like Pittsburgh and Erie, Pa.. But it doesn't have a large urban presence with its branch network. In his walks, Wagner came to appreciate Buffalo's diversity and learned about the challenges some residents face connecting with banks. The experiences helped shape a community benefits agreement Northwest unveiled Friday.
"I think the major takeaways were the refugee population, the immigrant population. We didn't know any of that prior to this," Wagner said. The banks' officials also heard about poor residents being forced out of their homes because they couldn't afford rent hikes imposed by out-of-town landlords.
Wagner found residents of some city neighborhoods he visited had never been in a bank branch. "They don't think they're welcome in a bank," Wagner said. "They don't think they could open an account in the bank. Somehow we have to change that perception, too, and get them in the front door, because I think once they walk in, the people we have in the offices do a really good job of welcoming customers and taking care of them."
Northwest and the Buffalo Niagara Community Reinvestment Coalition on Friday announced a five-year community benefits agreement that calls for the bank to loan or invest about $102 million to low- and moderate-income borrowers and communities in the Buffalo Niagara region. It's similar to a larger agreement the coalition reached last year with KeyBank, ahead of Key's acquisition of First Niagara.
Northwest officials plan to meet quarterly with the coalition to track the plan's progress. The contents include $8 million in mortgage lending, $75.5 million in small business lending to businesses with less than $1 million in gross annual revenue, and $18.3 million in community development lending and investment.
The bank will also make $200,000 in grants, and will hire two community development officers who will focus on low- to moderate-income customers and businesses.
"That person's not going to Amherst, that person's not going to Orchard Park," said Ronald Andzelik, the bank's chief compliance officer. "That person's going to areas of the city that we want to benefit through this agreement." Northwest also pledged to open a branch in a low- to moderate-income census tract, but hasn't determined exactly where yet.
Northwest also plans to reach out to the city's refugee community, through services to customers and helping to train refugees to work in financial services jobs. Its Connecticut Street branch has introduced over-the-phone access to language interpretation services for customers, reflecting the large number of languages spoken in that neighborhood.
Wagner said the community benefits plan will help Northwest make greater inroads in a market where it had only a small presence prior to acquiring the 18 branches. "I think it's a great opportunity for us to get customers and serve the community," he said.
Three of the 18 branches Northwest acquired are in the city of Buffalo.
John Golding, Northwest's New York regional president, said the plan ties into other steps Northwest is taking locally. "This isn't the one singular thing we're doing," he said. "We met with the mayor and are working with the mayor on how to become more a part of the fabric of Buffalo."
Northwest officials shared their plans with community members at the Delavan Grider Community Center on Friday. Joseph Kelemen, executive director of the Western New York Law Center, called it a "precedent-setting agreement."
Kelemen praised Wagner and his leadership team for getting out to the neighborhoods and talking to residents. "I think it really demonstrates Northwest's commitment to this agreement and to the community," he said.
Rev. JoAnne Scott, president of the Niagara Organizing Alliance for Hope, described Northwest's plan as a "significant path forward" for community development. "We are very appreciative that they have taken on an action plan to work with our community, which is so greatly needed."