Car loan jamestown new york

Branches in play when banks look at position, potential

M&T Bank slapped its

name on 29 new

branches in its network

inupstate New York

recently, buying the

branches and their

depositors and

loan portfolios

from Chase. It

is the latest in a

string of transactions in the

Upstate market over the last two years that has seen one bank moving to pull out of a brick-and-mortar presence in some markets while others are eager to move in.

That is a trend that is likely to continue, says Jack Webb, Chase's retail-banking officer for the Central New York market. The trend is being fueled by pressure to define more clearly their strengths and weaknesses, their opportunities and risks, in terms of both geographic mix and business segments.

For Chase, both geographic and business strategies had an influence on the bank's decision to sell the 29 branchesseven in Buffalo, 11 in Binghamton,

eight in Jamestown, two in Coming, and one in Schenectady.

According to Webb, Chase looked at its Upstate presence on a market-by-market basis. "It's not an 'X+Y--the answer' situation. We looked at each of those markets individually to assess where we were and what the potential was," he explains.

In Buffalo, where Chase bad seven branches, bank officials looked around and saw that Buffalo is the corporate headquarters for M&T and for HSBC's New York operations; Fleet also has a strong presence there.

"When you are looking at a market like that, where you are not one of the top three banks- in the market, you are faced with either doing something along the lines of an acquisition or essentially exiting the market. Obviously, none of those three players [Marine, M&T, or Fleet] were likely to sell, so we pretty much had to sell," Webb says.

Fortunately for Chase, what they were selling was what M&T was looking to buy, according to Gary Paul, senior vice president of corporate finance.

About half the $600 million in retail-and business-banking deposits involved in the deal were from the Binghamton market "where we already have a meaningful market," Paul says. "Enlarging that presence in the Southern Tier was very attractive to us," he adds.

For Chase, the Southern Tier was a key reason for making the deal with M&T in the first place, Webb reports. "If it had just been the seven branches in Buffalo, it probably wouldn't have been worth the effort and expense for us to work out the agreement with M&T. And it probably would not have been of very much interest to them anyway because they already have the dominant presence in that market," he adds.

For M&T, the 29 branches with their deposits and $100 million in municipal balances and $40 million in loans give the bank a strong foundation for building its business further in the Southern Tier, Paul says. It also allows Chase to concentrate on its consumer and small-business banking in the markets where it is already in a strong position.

Paul sees that local deposit base as a strong asset in building its presence.

"People in this day and age want to use more than branches to do their banking, but the key is 'more.' They won't want to lose the branches, but they want to have other services too. The fact is, though, that those branches and those deposits remain a very good way for us to initiate those valuable customer relationships. Even if people later decide that they want to do more of their banking through ATMs or via their computers and the Web, the relationship most often initially began with a branch," Paul reports.

under Chase's business model. Chase has a strong presence in each of those markets, and "if you can't be in the first, second, or third position in most of your key areas of business in a given market, you

might as well not be there," he says.

"If you look at our core business in the retail-branch sector-small-business loans and services, mortgage services, car loans, and consumer credit-we are in the top three in those services in most of the markets we are pursuing."

But Chase looks beyond its current prominence in a given geographic area in its key product and service segments. The bank's management is also looking for growth potential.

"We had a good presence and market in Jamestown, but the area surrounding it didn't have the kind of growth potential that we are looking for," Webb says.

But it does offer the potential that M&T is looking for, and that is primarily a function of serving somewhat different market segments, according to M&T's Paul. He notes that M&T's commercial banking focuses on somewhat smaller businesses than Chase's does; thus, there are more potential companies with which to work. And he adds, "We are especially good at using our branch network to demonstrate our community involvement and then leveraging that to grow our business in those communities."

For Chase, the larger commercial markets are the most attractive, according to Chase spokesman Ken Herz. "Certainly, the commercial business was uppermost in our minds. Of course, commercial

banking is our bread and butter."