Thanks to a strong and diversified local economy, plus new technologies that help secure and streamline financial transactions, business banking is booming in Westchester. We take a closer look at the trends and the players driving this key sector.
By Rich Mintzerâ€‹â€‹
Photography by Paul Aresuâ€‹ • Shot on location at ArtsWestchester, White Plains
When describing the banking industry in Westchester County right now, the word “robust” comes to mind. The growth of diverse Westchester businesses, large and small, has brought to our borders not only major finance players like Bank of America, JPMorgan Chase, and TD Bank, but strong regional and community banks, as well. Many are seeking additional branches, while all are expanding their technology applications.
“Banks come to Westchester County because they see a strong and vibrant economy, with growing sectors in biotech, healthcare, and professional services,” says Marsha Gordon, president and CEO of the Business Council of Westchester. “Banks don’t expand into new territories without thinking through the decision; they obviously see some positive development, a strengthening economy, and want to get a foothold in that market,” adds Nir E. Gozal, counsel to the Westchester County Banking Association and a member of its board of governors.
Many of the newer banks in the county, including community and regional banks, have found technology to be key to their ability to compete against the larger banks and level the playing field. “Community banks now have the same technology as the largest banking institutions in the world and are able to deliver it in a highly personalized manner, which is a key differentiator for local community banks like ours,” says John Tolomer, president and CEO of The Westchester Bank.
It’s also important, he notes, to have a strong local presence. “Our lending officers and branch managers are out in the marketplace, attending industry-wide programs or volunteering at nonprofit events,” adds Tolomer, noting that the bank has donated more than $1.5 million to charities, the vast majority to local organizations, during its 10 years in the county.
Likewise, the TD Bank regional team takes a philanthropic approach to the Westchester market, working with many nonprofit companies and organizations. “We’re a large bank, but we work within the community-bank mindset, along with the local powers, and local decision-makers,” explains Jennifer Bonhomme, vice president, commercial lending, at TD Bank.
The Appeal of Westchester
Those of us who call Westchester home, and run (or work for) businesses in the area, are not surprised that banks are expanding their footprints in our communities. The county’s proximity to Manhattan, strong housing market, and plentiful high-net-worth individuals are among the reasons Westchester is ripe for banking opportunities.
Then there’s the diversity in business and industries. From PepsiCo, Mastercard, and IBM to our thriving small-business sector, there are plenty of clients with growing needs. This vibrant mix “allows for expanding opportunities on the corporate side, from service businesses to manufacturers, importers, exporters, and others,” says Frank Micalizzi, regional president at M&T Bank. “So, as a bank, you are going to find whatever type of banking clients you are looking for, from places like White Plains and Mount Vernon, where you’ll find service and industrial businesses, to the more residential communities, where there are retail and residential-focused businesses.” Like many of the area banks, M&T, a regional bank, has both size and a community feel. “That mix resonates very well with the community at large,” Micalizzi notes.
Joseph F. Markey, commercial banking sales leader and market president of KeyBank, agrees that you can play to your strength in the Westchester market. “If you’re after private-wealth management or in the residential-mortgage business,” he notes, “this is a great market to be part of.”
“Being in Westchester is an integral component of the overall New York-metro area,” adds Joseph J. DePaolo, Signature Bank cofounder, president, and CEO, who led Signature into the county, first in New Rochelle, in 2001, and later in White Plains, in 2005. “However, Signature isn’t focused on the physical locations but rather on the relationships the private-client banking teams forge.”
Business Opportunities, Sectors, and Competitive Programs
Business opportunities are flourishing in many Westchester business sectors, such as healthcare, commercial real estate, and construction-related industries. This is good news for banks.
“A lot of the growth in our business-banking group is coming from the real estate end of financing, whether we are funding new development or acquisitions,” notes Joseph McCoy, regional manager, commercial lending for People’s United Bank, which has strong reach locally in the retail, and wholesale gas and propane sectors, among others.
“There is a demand for leases and rentals in commercial buildings, which means an opportunity for building owners to increase their tenancy,” adds Michael Gilfeather, president and CEO of Orange Bank & Trust Company, which moved into Westchester and Rockland just four years ago, largely because of commercial business opportunities. Gilfeather points to the strong construction sector, which has also led to an increase in contractors, as well as the growing healthcare sector and the legal-services industry, as particularly strong areas. “Because the number of transactions are increasing with the growth of business, our attorney customers are as busy as ever,” he adds.
In banking, like most industries, success boils down to customer satisfaction. Banking products, platforms, and services must be ready to meet the expectations of the business customer.
“Banks are getting a better understanding of what types of business platforms people are looking for,” says Joseph D. Roberto, chairman, president, and CEO of PCSB Bank (formerly Putnam County Savings Bank). “There’s no one-size-fits-all anymore. Businesses have different banking needs. Today we have to understand those needs and be able to provide the right services and technology for each business.”
But technology alone isn’t the holy grail. “It has certainly made things more efficient, but it hasn’t replaced the hard work of going out into the market or knocking on doors and asking for someone’s business,” says McCoy of People’s United Bank.
With that in mind, both smaller and larger banks in Westchester continue to create new competitive products and services. Sterling Bank, for example, now has a single-point-of-contact model with their commercial clients. This means everything a client needs is done through one contact and coordinated through a single team. “The big advantage to this is that it builds a lot of loyalty, and clients know they’re not going to be tossed around from department to department, trying to figure out the silos in our bank. Every commercial client has a dedicated account officer on the team, so they know who to call,” explains Lynn Bagliebter, Sterling’s executive vice president and market president of Westchester and the Hudson Valley regions.
Tompkins Mahopac Bank, meanwhile, has found success with a unique lending program geared primarily toward medical practitioners, including dentists and veterinarians. “One of our newer and more successful programs is the healthcare-practitioner lending program, for people starting a practice or expanding their current practice,” explains David DeMilia, senior vice president at Tompkins Mahopac Bank.
KeyBank has also stepped up its healthcare offerings, with the late-2017 acquisition of Cain Brothers, a healthcare advisory firm. “Bringing this established advisory team in-house gives us instant creditability with hospitals and larger healthcare providers,” says Markey.
The Latest on Lending
Underscoring the strength of the local banking industry are positive numbers from the Small Business Administration. In 2017, 213 SBA-guaranteed loans were transacted in Westchester County, amounting to just under $75 million given to business owners. This figure is up 20 percent from the previous year, according to SBA officials. Meanwhile, in the entire seven-county Lower Hudson Valley region, the SBA guaranteed 500 loans, worth $191 million.
Short-term interest rates have gone up slightly, while longer-term rates have not gone up as much. Right now, this is simply a flattening of the bell curve, where there’s not much of a difference between the short- and long-term rates.
“Slightly higher rates are not necessarily bad for the economy or for lending. Rates have been low for so long — young people have never experienced 10 percent prime rates,” explains Markey of KeyBank, who says the higher rates have not had a negative impact on his bank’s commercial-lending activities.
“Rates are going up, but we’ve seen no slowdown. In fact, we’re seeing a lot of activity,” notes Anthony Pili, senior vice president at Greater Hudson Bank. Pili points to the bank’s many calls for construction loans. “Whenever you have a growing market, as we do in this county, you have a need for construction lending, so we’re seeing a lot of that right now.” [Editor’s Note: As we were going to press, Greater Hudson Bank announced that it will be be bought by New Jersey-based ConnectOne Bancorp Inc. in a $76.3 million stock deal. It remains to be seen how this will impact Greater Hudson Bank’s Westchester operations.]
Joe Murphy Jr., president and CEO of the family-owned Country Bank, now celebrating its 30th anniversary, also reports that “lending has been very robust.” Murphy specifically points to the bank offering more commercial real estate lending and occupied lending products. “Quite frankly, we’re seeing more demand,” says Murphy.
When it comes to banking, one of the most common concerns of millions of business owners and residential customers is data safety. Cyberthreats, hacking, and phishing are ongoing concerns for banks, which need to stay one step ahead of the attackers. It’s a full-time effort, especially when you consider that in 2017, the US banking industry experienced 134 data breaches with 3.1 million records compromised, according to CreditDonkey.com.
Cybersecurity is a real challenge, says DeMilia of Tompkins Mahopac. “We have an entire team dedicated to cybersecurity, and they work long hours, trying to stay ahead of the curve while keeping up with traditional virus-security expansion,” he explains.
Lynn Bagliebter from Sterling National also points out an unwelcome return of old-school check fraud as a trend — everything from wire fraud to people stealing checks out of mailboxes and trying to cash them. “We have systems that will kick out checks that look suspicious,” says Bagliebter, who notes that Sterling uses Positive Pay, an automated fraud-detection-tool service that has become part of the cash-management department at many banks.
While some of the larger institutions have in-house security systems and other banks are using dedicated IT and cybersecurity companies, all banks are devoting time and resources to these ongoing safety concerns.
Overall, despite a competitive environment, the Westchester banking community continues to grow and is showing no sign of a slowdown. While the physical footprint of forthcoming branches may be smaller — as banking today is largely an off-premise activity — the presence of these banks throughout the county is strong, and even expanding, as they reach out to meet the specific needs of businesses and residential clients across Westchester.
Rich Mintzer is a business and finance author, ghostwriter, and journalist living in Mount Kisco.