Joseph Bower Jr. is glad his bank decided to expand to Buffalo after all.
Bower is president and CEO of CNB Financial Corp., which first explored entering the Buffalo market several years ago. With the state of the economy then, the timing didn't seem right, so the Pennsylvania-based bank put the idea on hold.
In late 2016, CNB followed through, creating its Bank on Buffalo division. Today, Bank on Buffalo has four branches and just finished renovating the seventh floor of the Electric Tower for its regional headquarters. Plans for a fifth branch, in Amherst, are on hold.
Bank on Buffalo is a strong contributor to CNB Financial, whose headquarters is about a three-hour drive from Buffalo, in Clearfield, Pa. CNB reported record-high profits of $33.7 million in 2018. Its Buffalo division accounted for nearly half of CNB's loan growth last year, and 64 percent of CNB's total deposit growth, driven in part by savings accounts that pay 2 percent interest, far more than most conventional savings accounts. It also offers checking accounts that pay 1.5 percent interest if certain conditions are met.
Bower talked about how Bank on Buffalo has grown and what its future might hold.
Q: How has Bank on Buffalo performed compared to your expectations?
A: When we came in, we had expectations that we thought were fairly high. … It's been about 27 months. Our expectation for 27 months was to eclipse about the $200 million range in assets, and to have maybe three facilities up and running and operating. We're well over ($300 million) in assets, and we have four locations up and running.
From a staffing standpoint, we thought we would be somewhere in the 24, 27, 28 people range. We are over 40 now here in the Buffalo market.
It's been exceptional. The reception from the community has been amazing. I think it just did point to the fact that there was a need for bank like ours that's focused on small, medium-sized businesses that are locally owned and operated.
Q: How were you able to exceed projections in such a competitive banking environment?
A: Let's be honest, a fair amount of that was the disruption with First Niagara being taken out [through acquisition by KeyBank]. First Niagara was a very-well-thought-of community bank in this market. When you were unhappy or dissatisfied, or not taken by M&T, First Niagara was a great option. When they were purchased by Key, Key was already in the market, so it wasn't a new player coming in, it was a transition into an existing bank.
I feel like we were right here, perfect timing for some of the customers who were dissatisfied at that moment. I also feel like, we're a commercial and industrial bank. We focus on the people that make things and do things. That's not something that's overbanked in this market at this time.
Q: How important is Bank on Buffalo to CNB's overall operations?
A: Very important. This economy of about 1.5 million people, with a large number of manufacturing based companies, it doubles the size of our entire market, when you think about where we were, in manufacturing-based communities. We are in Columbus [Ohio]. Columbus is not a heavy manufacturing base. It's a fair amount of services, with the government and a large university that are there.
So Buffalo has become, in a very fast-paced time, very important to us from an overall manufacturing entity and ability to grow.
Q: How has Bank on Buffalo made inroads in deposits and loans?
A: I think from a deposit base, a big piece of that is the locations that we selected. All of the locations that we had were at one time very successful branches for First Niagara, and predecessor to that, HSBC, in some cases. [Its temporary branch in Wheatfield was formerly home to Fleet Bank and Bank of America.] I think that's a fair amount.
The seasoned staff that we've hired that are well known to the local area has also made a huge difference from the deposit side, and an even bigger difference on the loan side, when you talk about people like Maria Barth, Mike Noah, Greg Emminger, very well known, always worked and performed here in the Buffalo market.
Q: Where have you found opportunities for loan growth?
A: I think a fair amount of them are First Niagara transitions to either Key and/or Northwest, and maybe disruption in their business model and they wanted another option to consider. And we've given them that option.
I think also there's been a large number of people expanding their businesses and taking the opportunity to feel us out and see what we can and cannot provide.
Q: Where do you see Bank on Buffalo going from here?
A: I think we'll continue doing a lot of the same things we are doing. We're going to refocus – it's hard to say you're going to refocus when you've only been here 27 months, but sometimes you get to moving along so fast that, maybe you need to step back and think about, "Why did we come here in the first place?"
And we really came here because we felt like the small business world really needed a bank like ours. We didn't lose that. We didn't go away from that. But we stopped a little bit of that focus, went a little bit more toward the retail side than maybe we'd like.
Not that we don't want to be a retail bank. We do. But we want to go back to focusing on the small to medium-sized, locally owned businesses that really need a bank like ours, to give them options in this community.