By Maureen Werther
Local and regional banks are reporting record growth and increased attention being paid to expansion–physically and technologically–as they continue to court the growing number of businesses that are expanding throughout upstate New York.
While some local banks, like Adirondack Trust Co. are building upon their already strong relationships with customers in the immediate area, other banks, like Ballston Spa National Bank and Saratoga National, have seen significant growth as a result of expanding into other regional markets.
Still other banks, like NBT, which has branch offices throughout the state, are continuing to be viable competitors by offering high-caliber services to meet the needs of a diverse customer base.
Stephan Von Schenk, president of Adirondack Trust, said last year saw record growth across all three of their lending portfolios, with residential and consumer lending up by 15 percent.
“Anything over 10 percent is very fast and is not sustainable without expansion and increasing infrastructure,” he said.
But expansion doesn’t necessarily have to mean adding more brick-and-mortar locations in new areas or in already established markets. Growth in technological infrastructure, expansion of services, products and processes, as well as making significant investments in employees, are all integral components of growth and enhanced customer experiences.
Von Schenk referred to the expansion and growth strategy as a “three-legged stool,” which includes enhancing both the customer and the employee experience, along with an increase in sales.
Adirondack Trust has been a leader in SBA loan servicing over the last several years and the company has won the distinction of Commercial Lender of the Year, in either the small or large bank categories, for the past 14 years.
In 2016, the bank saw an increase of 47 percent over the preceding year in SBA lending.
“Once you get over $1 billion in lending, you get bumped to the larger bank category and you are competing against much larger banks,” said Von Schenk. Adirondack Trust has continued to hold its own as one of the smaller fish swimming in that bigger pond, and Von Schenk doesn’t see any signs of that success abating any time soon.
He said Adirondack Trust is off to a great start in 2017 and the bank is committed to servicing customers in the Saratoga and Warren counties.
“We would be diluting the strength of our services if we went beyond this area,” he said.
Other banks are enjoying significant growth in large part due to expansion efforts into other markets. Ballston Spa National Bank, which has been serving customers since 1838, recently announced plans to open two new locations in Voorheesville and Guilderland, bringing its number of branches to 13. Ten new staff members will be hired.
The question of whether growth drives expansion or vice versa, seems to be easily answered. The popular movie line, “If you build it, they will come,” looks like it is holding true for BSNB, as well as for Saratoga National and Glens Falls National Banks, which are owned by Arrow Financial Corp.
According to Saratoga National Bank’s Director of Marketing Tim Badger, commercial loan growth of loans has been strong at both Glens Falls and Saratoga National. In 2016, commercial lending increased by $49.3 million, up 10.1 percent over the previous year.
Badger also noted that Saratoga National and Glens Falls National were named as a Five-Star institution by the independent rating agency, Bauer Financial. They were also recognized in 2016 as the number-one small commercial lender by the SBA for the third year running.
As with BSNB, Saratoga and Glens Falls National are always looking for new opportunities to expand their footprint into new areas.
“Over the past few years, we’ve added locations in Latham, Troy and Clifton Park,” said Badger. He added that they are “very optimistic about growing our opportunities going forward and we are always looking for further expansion.”
NBT Bank, which has a much broader reach across the state, has nevertheless positioned itself as a viable competitor alongside the other “community-focused” institutions. Based out of Norwich, N.Y., NBT has steadily gained market share through its exceptional service, both in the brick and mortar environment and in the online, virtual sphere, officials said.
Dan Burke, who is the North Country/Saratoga regional president, said while no two commercial loans are alike, customer relationships flourish because of the staff’s ability to understand and respond to the needs of the small business person.
“While credit may still be a bit tight, NBT continues to be very competitive in pricing for commercial lending and we are seeing people borrowing money for all the right reasons,” he said, noting that more and more businesses are using dollars for expansion of facilities, innovation, upgrading and automating technology and processes and investing in new equipment.
While in the past, obtaining lending from a bank seemed to be an interminable process, Burke noted that in many instances the bank can have an answer for a small business customer within a short period of time, rivaling the turn-around times of the capital investment companies that cropped up nationwide during the 2008 economic downturn, as a response to the banks’ tightened restrictions on lending.
Burke sees NBT as being highly competitive in the areas of both rate structures and response time, something that small businesses need when planning strategies for growth.
In 2015, NBT made a total of $1.2 million in SBA loans, and 15 loans totaling $2.2 million in 2016.
“In our North Country/Saratoga Region, we’ve seen a 20 percent increase in commercial loans since 2014,” he said.
The bank recently reported that its total volume of lending increased by more than 30 percent between 2014 and 2015. Burke added that NBT is already off to a great start in 2017.
“Businesses have not been as adversely affected by the deep cold winters in the past two years,” he said, which means that new construction and expansion can begin earlier, with shovels ready to go into the ground sooner in the year.
NBT’s recent hiring of Sarah Halliday to the position of executive vice president and president of commercial banking is another indicator that NBT is expecting to become an increasingly stronger presence in and around the region.