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Banking and Financial Services

Doubling Down

Community Bank’s branch inside Tower Square

Community Bank’s branch inside Tower Square will be complemented later this year by a second Springfield location on Boston Road.

 

 

 

When Community Bank expanded in 2017 with the acquisition of Merchants Bank, it gained a large network of branches in Vermont … and one in Massachusetts.

That office is located in Tower Square in downtown Springfield and had been NUVO Bank before hanging the Merchants banner. Located far from any other Community location — the organization has a strong presence in Pennsylvania and New York as well as its newer footprint in Vermont — it wouldn’t have been surprising had Community shed it altogether. But the bank saw value in a Springfield presence.

And now, seven years later, it’s doubling down, planning to open a second Springfield location on Boston Road later this year.

“It’s a market that’s not too far from Albany, but far enough where it’s a very distinct market by itself. And because it’s one branch, it’s been a little bit under the radar,” President and CEO Dimitar Karaivanov said. “But it’s a good market with good opportunities, and we have a really good team in the market, and the level of energy and activity in Springfield has been very hot.

“So almost a year ago, we decided we hadn’t given Springfield its rightful chance to succeed,” he went on. “We’re just one branch and have a good team, but we’re somewhat limited by the fact that it’s only one branch downtown. So we decided to kind of invest in the team and the opportunities that we have in the market, and we’re going to double our presence.”

The bank is doing so, he said, in locations that make strategic sense, and also, in some cases, investing in lower-income areas. “We’re looking at communities that offer opportunity from an economic perspective, but we also consider it our responsibility to invest in communities and bring them along in terms of growth. That’s how we’ve been selecting some areas that we’re going into.”

While Greater Springfield has been called overbanked, Karaivanov said Community Bank sees plenty of potential in expanding.

“We’re just one branch and have a good team, but we’re somewhat limited by the fact that it’s only one branch downtown. So we decided to kind of invest in the team and the opportunities that we have in the market, and we’re going to double our presence.”

“There’s no lack of competition in Springfield — there are a lot of banks, a lot of mutuals, a lot of credit unions,” he said. “But the reason that we feel like we can be successful is our team. So we’re really investing in our team. That’s how we look at expansion; it’s really people-based. Obviously, the market needs to be sizable enough for another entrant, but we feel like we’ve got a team that we have basically under-leveraged over the past several years. And now we’re trying to give them more runway and opportunity to be successful.”

 

Branching Out

As Community Bank expands in Springfield and other markets, it’s doing so, the organization explains, by reimagining the in-branch experience with clean, modern designs that encourage customer and banker collaboration, local community tie-ins, and staff that can handle a wide array of financial needs.

“Branches are still pretty important, and I think they will continue to be important,” Karaivanov said. “If you look at where most accounts, especially new accounts, are opened, it is still predominantly in the branch. People still get their mortgages predominantly in the branch. That initial contact with a financial institution is mostly in the branch.

“Now, when you open your second account, or if you are already a customer of a bank, you might go online to apply for a mortgage and other things. But to get into the ecosystem, usually the average person still starts in the branch.”

He cited the example of JPMorgan Chase launching an online-only bank six years ago, “and no one’s heard of it since,” he noted. “Instead, you’re seeing JPMorgan open branches all over the place. It’s hard to be just online. You need both parts.”

To that end, modern branch designs are different than the old, traditional model of counters and lines, he added.

“Today, the branch is really more advisory and consultative than transaction-based because transactions are easy to do on your phone, and you don’t need to go into the branch for a specific transaction anymore. But people do go to the branch for advice and for questions and when they have a problem. So spaces in the branch are designed in a much different way.”

Dimitar Karaivanov

Dimitar Karaivanov

“Transactions are easy to do on your phone, and you don’t need to go into the branch for a specific transaction anymore. But people do go to the branch for advice and for questions and when they have a problem.”

Community Bank currently boasts 28 branches in New England, all but one of them in Vermont, and its current expansion plans include the first New Hampshire branch in addition to the second Springfield location.

“Community Bank is not just expanding, but deepening our roots in New England,” said Matthew Durkee, regional president for New England. “Our branches are the cornerstone of our retail business, and each one allows us to support the community and deepen our relationships with our customers as we partner together throughout their financial journey.”

Those community relationships involve philanthropy and volunteerism in communities where the bank has a presence, Karaivanov added.

“We do a lot of that, led by our branch staff most of the time,” he told BusinessWest. “It’s in our name, right? So we live by it. Our people are involved, they’re on boards, they’re in the Rotary Clubs, they know their neighbors, they’re supporting the local schools, teams, and everything else. It’s how we distinguish ourselves. Those are our neighbors, they’re our friends, and being part of the community is just as important as being a financial institution.”

With its commitment to Springfield affirmed, he added that Community Bank could look to expand further in Massachusetts where it makes sense.

“Hopefully, as we are successful in this expansion, we would like to do more. I’m a big believer in getting behind your success. So if we continue to be successful in Springfield, we’re going to continue to grow.

“Again, this has been a little bit of an outpost for us. Meanwhile, the team’s been doing a great job. And now is the time for us to empower them to do even more.”

 

One-stop Shop

Earlier this month, Community Bank System Inc. — which encompasses four key businesses: banking, benefits administration, insurance, and wealth management — changed its name to Community Financial System Inc. to better reflect the company’s reach.

“The new name allows us to emphasize the evolution of our capabilities, solutions, and focus,” Karaivanov said. “In aggregate, over 39% of our revenue is comprised of diversified fee-income businesses, well over twice that of industry peers. Bringing all of that under the new name, Community Financial System, underscores our mission and drives our inclusiveness as one company.”

It’s a different model, he said, than financial-services organizations in which banking is 90% of the pie.

“We’re a bit of a unicorn because we have four different businesses, and the way we run the company, the bank is our largest business, but it’s not the whole business. With our benefits business, we help people with their 401(k) plans; we administer those all over the country. Or, if you’re an individual and you’re coming for a mortgage from us, we can directly give you a quote for the homeowners’ insurance as well.”

Meanwhile “if you have amounts in your banking accounts that clearly can be invested in better outcomes for you, we’ve got the wealth-management side of the house, or the trust capability. And on the commercial side, especially for small to mid-sized businesses, we can provide everything from capital to insurance to managing their benefit plans, actually helping them with HR consulting.

“It gives us a real leg up when we talk to customers because we’re not just a one-widget shop,” Karaivanov added. “We can provide comprehensive solutions.”

Daily News

Gilbert Nieves

SPRINGFIELD — Community Bank announced that Gilbert Nieves has been promoted to district manager. In his new role, Nieves will oversee strategy and operations for branches in Vermont and Massachusetts, ensuring administration of the bank’s financial goals and objectives, including business development. He will also be responsible for staff training, coaching, and professional development for continued excellence in customer service and operations.

With more than two decades of experience in the financial industry, Nieves first joined Community Bank in 2019 as branch manager of the Springfield location. In that role, he oversaw daily office operations, including sales and customer-service activities, to ensure operational efficiency, integrity, and adherence to policies and procedures. Prior to that, he served the Springfield community in other banking and financial roles, including vice president and branch manager at Webster Bank and assistant city treasurer for the city of Springfield.

“Gilbert has been a true asset to our team since day one, and I’m looking forward to all that he’ll accomplish as he steps into this new role,” New England District Manager Matt Villemaire said. “His financial experience and commitment to the communities we serve, both in and outside of day-to-day operations, have positioned our branches across New England for continued success.”

Outside of the office, Nieves is an active member of the community, serving his congregation as a Bible instructor and volunteering at Springfield Public Schools. In addition, he facilitates financial-literacy workshops at the Gándara Center, as well as first-time homebuying seminars at Way Finders. He is also a member of the Springfield Chamber of Commerce and Business Network International’s Springfield chapter. He holds a bachelor’s degree in accounting from Universidad Metropolitana in San Juan, Puerto Rico.

Daily News

DEWITT, N.Y. — Community Bank announced a strategic plan to expand its branch presence in select markets throughout 2024 and 2025, including two new branch locations in the New England region. The new branches will include an additional location in Springfield, as well as the bank’s first physical branch in New Hampshire, having broken into that market with a commercial banking presence in 2023.

The bank’s current presence in New England includes 28 branches throughout Vermont and Springfield. This announcement comes as newly appointed President and CEO Dimitar Karaivanov officially steps into his role this year and begins to execute his strategic vision for the bank.

As Community Bank expands into promising markets with strong potential for growth, it is reimagining the customer in-branch experience with clean, modern designs that encourage customer and banker collaboration, local community tie-ins, and staff that can handle a wide array of financial needs. The bank will bring a full suite of consumer, business, and municipal banking products and services, including no-closing-cost mortgage options, business loans and lines of credit, and competitive CD offerings.

“Community Bank is not just expanding, but deepening our roots in New England,” said Matthew Durkee, regional president of New England. “Our branches are the cornerstone of our retail business, and each one allows us to support the community and deepen our relationships with our customers as we partner together throughout their financial journey.”

The move to establish additional branch locations in New England is a substantial investment that will allow the bank to better serve clients and aid in local economic development by creating new jobs, contributing to community efforts, and fostering financial stability.

“We are pleased to officially announce our plans to expand our branch presence throughout New England,” Karaivanov said. “We’ve served the New England market through various lines of business and are happy to further support new and existing customers with additional branch services. We are poised to execute on our growth strategy with the goal of bringing our service offerings to more communities in Springfield, Massachusetts, and in New Hampshire. We look forward to expanding our presence in the New England region through community outreach, supporting our neighbors, and building relationships with our new customers.”

In addition to expanding in New England, Community Bank will continue to grow its branch presence throughout New York’s Western, Central, and Capital regions, as well as throughout Lehigh Valley in Pennsylvania.

Daily News

SPRINGFIELD — Community Bank recently donated $6,500 to support Open Pantry Community Services.

Open Pantry aims to increase food security for families in the surrounding community through its Emergency Food Bank, Loaves and Fishes Community Kitchen, and holiday meal programs. It further supports those in need by providing Teen Parent and Open Door Social Services programs, as well as permanent housing for homeless single women recovering from substance abuse.

“We’re honored to donate to Open Pantry Community Services,” Community Bank Branch Manager Gilbert Nieves said. “The programs and services they provide have a tremendous impact on our community, and we’re happy to support them in any way we can.”

Open Pantry welcomes individuals and groups willing to help the community through volunteering at the Emergency Food Pantry, Loaves and Fishes Community Kitchen, the People’s Center, Open Door Social Services, and the holiday meal program.

Banking and Financial Services

What’s in a Name? Plenty

Mike Buckmaster

Mike Buckmaster, vice president of Commercial Lending for Community Bank, N.A.

Since entering the market in 2017 through the acquisition of Merchants Bank and its branch in Springfield’s Tower Square, Community Bank, N.A. has been working to build on its foundation in this region. It brings to the highly competitive local banking landscape both considerable size and an operating mindset commensurate with the name on the letterhead.

Mark Tryniski acknowledges that it sounds illogical that a financial-services institution with $12 billion in assets and more than 230 branches could call itself a community bank — let alone call itself Community Bank, N.A.

But Tryniski, president and CEO of the Syracuse, N.Y.-based institution, said ‘Community Bank’ represents more than a name — and one that fits. Indeed, it’s more like an attitude.

“As our name suggests, we’re a community bank — that’s how we’ve always operated,” he explained. “And when you put the name ‘Community’ on your bank, you’d better function as a community bank — and we do.

“There is such a thing as a community-bank model,” he continued. “You push authority down to people in the branches, as opposed to the big-bank model, where you walk in the door looking for a home-equity loan and they put you on the phone with a 1-800 number and someone working in another country. Community banks don’t do that.”

Mark Tryniski

Mark Tryniski

 “When you put the name ‘Community’ on your bank, you’d better function as a community bank — and we do.”

This operating mindset has enabled the institution to grow considerably over the past several years and into a number of different markets, including Springfield, accomplished through the acquisition in 2017 of Merchants Bank, which had previously acquired NUVO Bank, which operated a single branch within the 413 within a large footprint in Tower Square.

Since putting its name over the door on Main Street, Community Bank, N.A. has downsized that space considerably, while simultaneously working to establish itself and broaden its horizons within this market.

It has done so by essentially living up to the name over the door, said both Tryniski and Mike Buckmaster, vice president of Commercial Lending. They both said the institution possesses the formula that’s required to succeed today — a community-bank feel, but a large size that is necessary in a changing, quite challenging financial-services marketplace today.

“I think that, over a period of time, the market has accepted the fact, to a degree, that this is a consolidating industry,” said Buckmaster, who has logged more than 30 years in the banking industry, locally and in the U.K., and has carried business cards bearing the logos of NUVO and Merchants Bank, among others. “The differentiating factor tends to be the commercial banker, and if the commercial banker can continue to deliver in terms of service and business development, there tends to be a good degree of customer loyalty toward the banker, even through various acquisitions.”

That lengthy explanation helps explain why the Springfield facility has been able to enjoy steady growth in its portfolio even as the name on the wall of Tower Square has changed several times this decade.

Tryniski agreed, but said the combination of size and small-bank attitude is becoming ever more important as the consolidation movement continues without any signs of slowing down.

“I’ve been around the banking industry for a little more than 30 years, and there’s been a dramatic change in the banking landscape, mostly centered around consolidation,” he explained. “When I started, in the ’80s, there were 16,000 or 18,000 banks; now, there are roughly 6,000 banks.

“And I think the trend toward consolidation will continue because of efficiencies that can be garnered by scale and technology,” he went on. “The bigger you get, the more you can justify investments in technology to give you more efficiency. It’s hard for the smaller banks — you have to really be efficient and disciplined.”

Overall, Community Bank will look to get bigger still, and is looking at opportunities to expand within the Western Mass. and Connecticut markets, said Tryniski, but “haven’t found what the right opportunity is yet,” as he put it. Elaborating, he said growth for this institution will continue to come as it has historically, through a mix of organic growth and acquisition, with more of the latter than the former, especially in areas with slow or no growth but more than enough competition, and Western Mass. certainly fits that category.

In such markets, growth can come only by taking market share from other institutions, he went on, adding that this is generally difficult to do. Community Bank has had a good amount of success doing just that, however, because of that aforementioned enviable combination of large size and smaller-bank feel.

Community Bank, N.A.

Mark Tryniski says Community Bank, N.A. will look for opportunities to expand locally beyond its location in Tower Square.

For this issue and its focus on banking and financial services, BusinessWest talked at length with Tryniski and Buckmaster about how Community Bank, N.A. has firmly established its presence in the local market and how it intends to secure additional market share and perhaps expand its footprint in the 413.

By All Accounts

Since acquiring Merchants, and therefore all its branches, Tryniski has visited Springfield on several occasions as part of his efforts to fully understand the broad geographic area served by the institution — one that stretches from the Northern Kingdom in Vermont to the Southwest corner of New York to the Lehigh Valley in Pennsylvania — and meet both team members and customers.

“We spend a lot of time on the road,” he said of the management team at the bank, adding that, when he does visit Springfield, or any other community served by the bank, he makes a point of learning as much about the region as he can.

In the City of Homes, he’s become familiar with some of the players within the business community, has found a few restaurants he likes, and is both impressed with and encouraged by the high level of energy he’s seeing in the central business district.

He said there are a great many similarities between Springfield and Syracuse, and in some ways, that has helped him understand the dynamics of not only the communities themselves, but the banking environment here.

“They’re remarkably similar, actually,” he said. “They have the same population, they have an industrial history, they have a stable-but-not-growing population, there’s a lot of education, the downtowns look very similar … they’re very much alike. Springfield feels to me like Syracuse.”

From a banking perspective, that means a community that, as he said, is experiencing comparatively little growth, population-wise and new-business-wise, and has a crowded field of competitors for financial-services products — banks and non-banks alike.

In this environment, operating with that community-bank model — but with roughly $3 billion in assets behind the institution — is what amounts to a competitive advantage — a large competitive advantage, said Tryniski.

“We tell our branch managers that we want them to be the president of the bank in their town,” he explained. “And we give them the authority to do that; we give them lending authority and authority around charitable contributions, fee waivers, fee adjustments, things like that. We try to vest as much authority in our branch managers locally as we can, and let them make decisions about their customers and their market.

“We probably have more of a community-bank business model than most community banks,” he went on, “because most don’t operate like that.”

However, in this market, there are still a large number of community banks — more than in many other markets — and this simple math requires that small-bank mindset. Meanwhile, the field of competitors continues to change and grow, thanks to technology, which has brought many non-bank players into the mix, said Tryniski.

“We compete now with all sorts of non-bank competitors on the lending side — for everything,” he told BusinessWest. “Whether it’s personal loans, business loans, car loans … it doesn’t matter what kind of loan you’re making, you’re competing against a multitude of other, non-banking enterprises. And the same is true on the deposit side as well.”

Buckmaster agreed, noting that, on the commercial-lending side, with all that competition, as well as all that consolidation, having a local address is not the same thing as having people who know the local market and have worked within it for years, if not decades.

“All that competition puts the emphasis very much on the banker and being able to provide the service and support growth going forward as clients need,” he said, adding that Community Bank is large and stable, and thus able to provide commercial-banking products of all sizes, including dollar amounts beyond the scope of many of the smaller community banks that populate the region.

The sweet spot for the bank, though, is loans between $1 million and $3.5 million, he said, adding that the bank is able and willing to continue writing loans for small-business owners, something the very large banks seem less interested in doing so.

This flexibility has enabled the institution now known as Community Bank, N.A. to continue to serve the customers added to its portfolio when it was NUVO, he went on, adding that loans have been written for businesses across virtually all sectors and for a number of commercial real-estate acquisitions as well.

“We’ve have some customers who were initially small back eight or nine years ago who have grown into significant customers that require a significant increase in loan support going forward,” he told BusinessWest. “We’ve seen some good growth in commercial and industrial customers over that period of time, and in addition, we’ve also seen significant new dollars in different types of commercial-investment real estate, whether it be locally in Western Mass. or further afield.”

Worthy of Interest

Returning to some of those numbers mentioned earlier — the 230 branches and current status as the 125th-largest bank in the country — Tryniski said they certainly make Community Bank, N.A. sound big. And it is.

“But we’re a lot close to the smallest bank in the country than we are to the biggest, even though the numbers say we’re one of the biggest,” he noted, adding that, in today’s banking climate, it’s not how big a bank looks on paper that matters, but how big it acts in the markets it serves.

And with that as the benchmark, this institution does indeed live up to the words on its stationary and over those 230-odd doors.

George O’Brien can be reached at [email protected]