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How Commercial Banking Looks in Westchester Amid the Pandemic

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Area banks continue to assist their clients with PPP loan applications and look toward an increase in business activity commensurate with vaccine rollout.

The COVID-19 pandemic has undoubtedly taken a toll on business activity in Westchester. According to Marsha Gordon, president and CEO of the Business Council of Westchester (BCW), industries such as hospitality, food service, and retail were greatly affected, although other industries, such as finance and legal, were able to adapt to remote work.

“Westchester stayed as strong as any [region] because we’re a technologically savvy county, and many of our businesses were able to pivot to the remote way of doing business,” Gordon says. “Now that people are being vaccinated, and there appears to be some light at the end of the tunnel; hopefully, those in hospitality, food service, and other industries will be able to resume business soon.”

Area banks are optimistic about commercial banking in 2021 as they help their clients navigate the latest round of Paycheck Protection Program (PPP) loans from the Small Business Administration (SBA). Bankers also express confidence that business activity in the county will pick up as businesses adapt to the new normal and vaccine rollout continues.

The latest round of PPP loans, which began on January 11, 2021, has provided Westchester banks with steady business, largely from clients who have previously applied for funding.

“Our demand has been strong. More than half of my clients who applied for loans in the first round are applying for the second round, as well,” says Joe McCoy, region manager and commercial lending senior vice president at People’s United Bank.

People’s United Bank (which, at press time, was being acquired by M&T Bank) has focused on providing its clients with a personalized experience to assist them in the loan application process, according to McCoy.

“We have a hotline in place where clients have been able to speak to somebody directly about any issues they’ve been having. We’ve been able to walk them through the unperceived problems that popped up,” he says.

Other banks have taken a similar approach with their clients. For KeyBank, the vast majority of the demand it is seeing in this round of PPP loans is from repeat clients, according to Joe McPheter, sales leader for commercial banking — North team at KeyBank. He says that KeyBank has taken a proactive approach in reaching out to its clients.

“We identified those who went through our first round [of PPP loans], and we asked bankers to reach out to our customers and make them aware that there would be an opportunity for them to evaluate if they would want to apply for a second round. It’s gone well so far,” he says.

PCSB Bank, which is also seeing mainly repeat clients in this round of PPP loans, has chosen to focus exclusively on its current customers throughout the application process.

Joe McCoy

Photo courtesy of People’s United Bank

“Our demand has been strong. More than half of my clients who applied for loans in the first round [of PPP] are applying for the second round, as well.”

—Joe McCoy, Region Manager & Commercial Lending SVP, People’s United Bank

“Because of concerns about getting the program and the system up and running, we concentrated on making sure that there was enough access for our customers only,” says Mike Goldrick, executive vice president and chief lending officer at PCSB Bank. “For this current round, we said the same thing, that we should [accept PPP applications] based on knowing our customers and what we’re attesting to in the application requirements.”

The First Bank of Greenwich, which has a location in Port Chester, saw a mix of current customers and first-time clients in the PPP loan application process. The bank assisted approximately 50% of existing customers and 50% non-customers in the first round of PPP loans, and approximately 75% of customers and 25% non-customers in the second round. The bank handled the entire PPP loan application process in-house, and many of the first-time clients became ongoing customers, according to president and CEO Frank Gaudio.

“A lot of those people who [came to us for] PPP became customers because they liked the way we handled [the process] and how they were treated, as opposed to at the larger banks, where they were treated like a number,” he says.

The Westchester Bank has been able to guide its clients through this round of PPP loans with the help of a third-party provider, Pursuit, which is a lending organization.

“There have been some issues throughout the entire industry related to the SBA and the need for every provider to update their portals to comply with the SBA,” says John Tolomer, president and CEO of The Westchester Bank. “We’re fortunate that our partner is very strong and has worked through those issues.”

Photo courtesy of People’s United Bank

Photo courtesy of People’s United Bank

For Saw Mill Club, a Mount Kisco-based health-and-fitness club and client of The Westchester Bank, this connection with Pursuit was crucial in the PPP loan application process, which took about 10 days, according to Saw Mill Club president Rick Beusman.

“Typically, you have to go through what they call a lending partner to get to the SBA. In that sense, it’s really important to have a bank that has a close working relationship with an SBA lending partner, and in this case, it was Pursuit,” Beusman, says. “The Westchester Bank was really important for us because they were able to usher us through and do it quickly because of their relationship.”

Saw Mill Club, which has been in business for 48 years, worked with Tolomer prior to his founding of The Westchester Bank. Beusman praises The Westchester Bank’s personal attention to its clients.

“Way back when, banking institutions struggled with how to lend to fitness [companies]. They’d lend against the value of the land of the building, not the business. John was the first person who said no; these are good businesses; we’ll lend to you on the basis of that,” Beusman says. “When he started The Westchester Bank, the first thing we talked about was how do we get back together again.”

The Vaccination Factor

Bankers say that commercial banking activity in 2021 will be largely dependent upon continued vaccine rollout.

“As there are more vaccinations, things will begin to return to normal, and we may well see an increase in business activity,” Tolomer says. “The overall perspective is that as people are vaccinated, there will be more activity across the board.”

Gaudio says that people’s comfort level in being around others will also be a factor in how quickly industries, such as hospitality and food service, recover.

“It’s too early to tell right now when that’s going to come back — how fast they get these vaccines out and how comfortable people are to get back into society again,” he says, adding that business activity will likely pick up sometime this summer.

McCoy predicts a similar timeline for an increase in economic activity.

Frank Gaudio

Photo courtesy of The First Bank of Greenwich

“A lot of those people who [came to us for] PPP became customers because they liked the way we handled [the process] and how they were treated.”

—Frank Gaudio, CEO, The First Bank of Greenwich

“The economy is going to be ripe for a surge or a comeback in the second half of this year, as this vaccine is rolled out even more, and I think that banks are ready to take that opportunity by the horns,” he says.

Bankers are already seeing some industries generating business activity. One such area is commercial real estate, according to Goldrick of PCSB, who says that there is increased demand for industrial space.

“For 2021, we are definitely looking at commercial real estate,” he says, adding that although there is a reduced need for office and retail space, “the upward trend is definitely in the industrial space.”

According to McPheter, e-commerce is another area that has experienced growth during the pandemic.

Photo courtesy of The First Bank of Greenwich

Photo courtesy of The First Bank of Greenwich

“If you’re in the e-commerce space, whether you’re a fulfiller or [a company selling its products] online, the rapid shift of people buying online has been a huge driver for you,” he says. “Most of these companies are seeing 10 percent to 20 percent growth year over year, in a pandemic, and I don’t think that’s going to go away.”

He also sees movement in mergers and acquisitions, as well as an appetite among companies to grow their business in the new year.

“We are seeing a lot of activity in the M&A market, where people are selling their companies or buying others and looking for financing,” McPheter says. While 2020 was a difficult year for many companies, those that have come through the pandemic fairly well so far, he adds, “are now focused on growth and executing on plans they may have mothballed in 2020. They’re working really hard to get those [plans] off the ground in 2021, to make it a better year. We’re definitely seeing companies going for the brass ring.”