Sunday, December 8, 2002

Tristate banks look to expand in north suburbs



By Jeff McKinney
The Cincinnati Enquirer

After expanding briskly in Butler and Warren counties during much of the 1990s, most of the Tristate's largest banks virtually halted efforts on opening brick-and-mortar branches in recent years.

[photo] Peoples president and CEO Jerry Williams (right) and branch manager Shane Lowe at the Maineville location.
(Gary Landers photo)
| ZOOM |
But now, tempted by a burgeoning population, the need to boost deposits and an acceleration of new business development, Greater Cincinnati's largest banks are descending on two of Ohio's fastest growing counties.

Ten of the Tristate's largest banks, which control more than 70 percent of deposits in Butler and Warren counties, plan to build at least 12 to 15 branches in those areas in the next two years. That's three times what they built in those northern Cincinnati suburbs in the past two to three years.

Banks are aggressively adding branches to target that area's affluence: consumers who generally have rising incomes, changing lifestyles and more diverse financial needs. The banks want to sell them everything from mortgages and checking accounts to stocks and certificates of deposit to boost profits and market share.

"There is a constant pool of potential new customers coming into Butler and Warren counties, and that's why you're seeing aggressive growth by banks in those areas,'' Tom Noe, executive vice president at Peoples Community Bank in West Chester, said this week.

The latest assault includes plans for more branches by banks ranging from Cincinnati financial powerhouse Fifth Third to folksy niche players such as Peoples Community Bank and hometown mainstays such as First Financial Bank.

EXPANSION PLANS
Several of the 10 largest banks in Butler and Warren counties have ambitious plans to expand there during the next two years, after being relatively quiet in that area in recent years. Here's a look at planned branch expansion:
Fifth Third:
Now: 26 (includes in-store)
2003: 32
Peoples Community Bank
Now: 4
2003: 6
Huntington Bank
Now: 3
2003: 6
U.S. Bank (includes in-store)
Now: 21
2003: 19
First Financial Bank
Now: 27
2003: More, but undetermined number.
Bank One
Now: 5
2003: More, but unspecified number
PNC Bank
Now: 3
2003: More, but unspecified number
Key Bank
Now: 4
2003: 6, preliminary plans
Provident
Now: 6
2003: Unspecified number, but expansion possible
Lebanon Citizens National Bank
Now: 15
2003: More, but unspecified number
It's an effort to capture a bigger share of the lucrative consumer deposits, growing business relationships and diverse demographics in those deposit-rich counties.

"Because southeastern Butler and Warren counties are experiencing such high growth in residential and commercial development, we see this as an opportunity to add banking centers in these areas,'' said Cheryl Lipp, First Financial Bank's spokeswoman in Hamilton.

A look how the banking landscape in Butler and Warren counties will change dramatically by late next year:

Fifth Third: The Cincinnati banking giant plans to open four branches in Butler County next year, including a new free-standing branch off Tylersville Road near the new Voice of America retail development in West Chester and a stand-alone branch on Bypass Four in Indian Springs. Two in-store branches at a new Kroger and Jungle Jim's, both in Fairfield, are planned as well.

The Cincinnati-based bank also plans a new branch on Loveland-Maderia Road in Loveland and an in-store branch at a new Kroger store in Deerfield Township by next fall.

Peoples Community Bank: The West Chester-based community bank will expand with two new branches in Warren County, including one on Mason-Montgomery Road in Deerfield Township and a second at the new Voice of America site at Tylersville and Cox roads. It's looking for more potential branch sites in both counties.

Huntington, for years a quiet player on branch expansion in those northern suburbs, now plans to open two branches in West Chester by next summer and a third branch in Springboro by late next year, doubling its size in Butler and Warren counties.

First Financial Bank, formerly the First National Bank of Southwestern Ohio, plans to add branches in both areas, but has not determined how many and where .

U.S. Bank, which has not opened any new free-standing branches in the area since 1997, plans to add one as well as an in-store branch in Warren County in the next two years.

Key Bank, with only one branch in Warren County and three in Butler, plans to add a branch in each of those counties during next year.

PNC, with only three branches in both counties, is looking for sites to expand in both counties next year, but did not specify how many new branches it will open or where they'll be located.

Bank One, which has only one branch in Butler County and four in Warren, is aggressively looking for land to build new sites in both counties by 2004.

Provident, Greater Cincinnati's largest bank based on deposits, has plans to double its entire branch network in the next three to five years company wide. It declined to say how many branches that would include in Butler and Warren counties, but did say any expansion would likely include that area.

Lebanon Citizens National Bank, Warren County's largest bank based on branches, plans to continue opening more branches in both counties, but does not have any specific plans now.

It's very easy to see why Butler and Warren counties keep attracting bank branches, experts say.

Both counties have been among among the fastest growing -- and lucrative for banks - Ohio's 88 counties in recent years.

The number of households in Butler County is projected to reach 127,690 in 2007, up from 124,079 currently, while households in Warren County is expected to grow to 67,747 five years from now, up from 59,182 currently, according to Map Info Data, a software and demographics firm.

Those counties could offer banks attractive economic benefits. The household income in Butler County is projected to reach $60,468 in 2007, up from $45,333 now, while incomes in Warren County are expected to come in at $65,397 per household in five years, up from $49,255 currently.

Economic development leaders are not daunted by the banks' invasion.

Jenea Norris Allen, executive director of the Certified Development Co. of Butler County Inc. in Hamilton, part of the county's economic development division, said Butler County is one of Ohio's fastest growing markets for small businesses - something very attractive to banks trying to boost business-lending efforts.

Through Certified Development Co.'s partnership with the Butler County commissioners, banks and small companies, $7.1 million was invested in new business expansion in that county in 2002, up from $910,000 in 2001.

"It's not surprising at all, particularly with the way the overall economy has been in recent years, that banks want to expand their presence in these markets,'' Ms. Allen said.

In next door Warren County, the story is the same.

Steven Jacobs, economic development specialist at the Warren County Office of Economic Development in Lebanon, said there has been significant gains for new businesses and residential growth in the area, particularly in Deerfield Township, Springboro, Mason and Lebanon.

He said the skyrocketing growth makes Warren County very appetizing to service-related businesses such as restaurants, dry cleaners and banks trying to expand.

"Someone is going to have to finance all of that growth (both business and residential), and the banks are jumping on that because they see the enormous growth and the great potential for even more business,'' he said.

E-mail jmckinney@enquirer.com.



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