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M&T, meet S&T: Pennsylvania bank takes greater interest in Buffalo market

A Pennsylvania-based bank is taking a stronger interest in Buffalo, but hasn't committed to opening branches in the region.

S&T Bank is close to choosing a location for a downtown loan production office.

"We've got a short list and we're very close to a place that we kind of like the most," said Pat Tobin, S&T's market president for the upstate New York region.

Tobin said the bank is looking at a location in the city's central business district and hopes to move toward regulatory approval soon.

The bank hopes to open the loan office in the second quarter, with two employees at first, Tobin said. S&T is based in Indiana, Pa., about 60 miles east of Pittsburgh. The bank has branches in Pennsylvania and Ohio, and $7.1 billion in assets.

S&T has served the Buffalo market from a Rochester loan production office that opened in June 2015. Since then, S&T has generated about $120 million worth of commercial real estate loans in the Buffalo market, and the bank felt the timing was right to establish a Buffalo office, Tobin said.

"We've had very great success in Buffalo on the commercial real estate side," Tobin said. "Clearly, there's great growth potential in the Buffalo market. I think that's evidenced by the amount of banks that have come into town. But we're really bullish on Buffalo and the Western New York market."

Whether the loan production office is the first step toward adding full-service branches here remains to be seen. Steuben Trust opened a commercial loan office in Elma in 2015, and then added its first branch in the region, in Clarence, last August.

If S&T adds branches in the Buffalo area, it would join two other Pennsylvania-based banks in taking that step. Northwest Bank is headquartered in Warren, Pa. And CNB Financial, based in Clearfield, Pa., is the parent of fast-growing Bank on Buffalo.

S&T is preparing to add a Buffalo office at a time when banking competition has diversified in a region still dominated by M&T Bank and KeyBank.

Pat Tobin is S&T Bank's market president for its upstate New York region. (Provided photo)

Bank on Buffalo opened its first full-service branch in early 2017, and will soon open its fifth area branch. Tompkins Bank of Castile, based in Batavia, recently opened its first local branch, in Amherst, and expects to add more locations in the future. And Steuben Trust joined the mix last year.

Meanwhile, established competitors like Five Star Bank and Evans Bank have opened downtown branches to increase their visibility in the market. Northwest bought 18 branches from First Niagara in 2016 and has opened a regional office in Amherst, growing its presence.

Banks have pointed to the shakeout that followed KeyBank's 2016 purchase of First Niagara Bank as creating opportunities for other competitors to make inroads.

S&T's stock price closed at $41.55 per share on Friday; the market was closed for trading on Monday. The bank will report its fourth-quarter and year-end results on Jan. 31. S&T reported $73 million in profits for 2017.

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