In an oft-heard refrain, Westchester Bank president/CEO John Tolomer says he is “cautiously optimistic” about 2019. “Hopefully, we’ll continue to see growth in Westchester. We’ve grown very nicely with the support of the Westchester business community,” he adds.
Looking a bit deeper: “The business climate in the county has been healthy, and we’re seeing a lot of money available to be invested in businesses,” Tolomer observes. “It’s hard to say how much of that is related to the corporate tax cut and how much is generated by businesses themselves. In Westchester, we’ve definitely seen an uptick in the performance of our small and medium-size customers.”
“There are a lot of great clients in Westchester who are going to demand competitive rates on both deposits and loans, so I would expect margins to compress.”
—Tom Cornelius, former CFO, Greater Hudson Bank
While the banking business can be seen as a proxy for the Westchester economy as a whole, several factors unique to the industry affect bank bottom lines.
“For the longest time, rates were so low, customers didn’t much care where they kept their money,” points out Tom Cornelius, who was the CFO of Greater Hudson Bank before its recent merger with with New Jersey’s ConnectOne Bank. “Now, though, with higher rates, they’re waking up and shopping around to get the best deals. There are a lot of great clients in Westchester who are going to demand competitive rates on both deposits and loans, so I would expect margins to compress.”
Photo courtesy of Greater Hudson Bank
Cornelius says higher rates and changes in the tax laws may impact the local economy in other ways, too. “We do a lot of construction lending, both residential and commercial, so we are watching to see how the increase in rates and the limit on property-tax deductions will impact the market. It will be interesting to see how builders go forward in the one-to-four-family residential market. On the multifamily side, the properties are usually held in LLCs, so they’re not really affected.”
Consolidation in the banking sector continues this year in Westchester as evident by Greater Hudson Bank’s merger with ConnectOne Bank in a $76.3 million deal that promises to heat up competition in the market. And People’s United, which has 15 locations in Westchester, is purchasing Belmont Savings Bank to expand its presence in the Boston market.