If it seems like the Buffalo Niagara region lost a lot of bank branches over the past decade, you're correct.
In fact, only one other metro area in the country lost more bank branches during that period, according to a new study.
The bank branch total for Erie and Niagara counties dropped 19.8 percent from 2007 to 2017, according to a MagnifyMoney.com study of the nation's 100 largest metro areas. Lakeland, Fla., led the list, with a 22.8 percent decline in branches.
It's no secret banks nationwide have reduced their branch networks, as customers conduct an increasing amount of their business digitally. Across all 100 metro areas in the study, the number of branches dropped 7 percent from 2007 to 2017.
So why was the Buffalo Niagara region's rate so much higher?
Mergers were a big factor. During the period covered by the study, First Niagara Bank acquired HSBC Bank USA's upstate branch network, and then KeyBank acquired First Niagara. Those mergers created some overlap, which in turn led to closings. For instance, Key in late 2016 closed 18 First Niagara and Key branches in Erie and Niagara counties after buying First Niagara. In some cases, one branch of the combined network was next door to or across a parking lot from another one.
The total number of branches in the Buffalo Niagara region dropped to 260 last year from 324 in 2007, according to Federal Deposit Insurance Corp. data.
The dropoff reflects how the region's banking competitive landscape has changed over the years, too. In 2007, three of the seven banks that had the most locations in the region — HSBC, First Niagara and Greater Buffalo Savings Bank — had a combined 104 locations. None of the three has a retail presence in the region anymore. Most of their branches were absorbed by competitors, but their departures contributed to the decline in branch count.
Brian Karimzad, co-founder of MagnifyMoney, said mergers are a driving force behind the smaller number of branches, but so is the rise of more-sophisticated mobile apps that banks have rolled out and improved.
"They've become a real viable alternative for the branch for a lot of people," he said.
Changing consumer sentiments toward branches — and increased comfort with digital banking — came through in two surveys by Accenture, Karimzad said. In a 2013 survey, 48 percent of the consumers responding said they would switch banks if their bank closed its primary branch. But in 2015, only 19 percent said they would take that step.
"The need for maximizing convenience with a branch just isn't there the way it used to be," he said.
Even as branch numbers fall across the country, banks see a value in having some physical locations to meet with customers face-to-face, particularly to talk to them about brokerage accounts or private wealth services, Karimzad said.
Elsewhere in upstate New York, Syracuse had the sixth-highest branch closing rate, Albany's was No. 27, and Rochester's was No. 42.
Meanwhile, some metro areas in other parts of the country actually increased their branch counts. El Paso, Texas, had 11 percent more branches than it did a decade earlier, but MagnifyMoney said that could be because the area was "so underserved to begin with."
Taking into account changes in population from 2006 to 2016 different metro areas gave the metro rankings a different look. For instance, if a region gained population but lost branches, its per capita rate of branch decline was even more pronounced, since there were fewer branches to serve more people. The Buffalo Niagara region's population was stagnant, so its rate of branch decline wasn't altered on a per capita basis. But because so many other areas on the list were growing, the Buffalo Niagara region's per capita branch decline ranked only No. 34.
All of the branch closings in the Buffalo Niagara region have generated a slew of vacant properties. But that has spawned another trend: banks new to the region have snapped some prime locations for their own branches.
Since the start of last year, three banks that weren't previously in the market have either opened or declared plans for a total of six new branches. And other banks already in the market are adding branches in spots.