R.I. bucks the national bank branch-closure trend

RIGHT MOVES: Bob Ricci, president and regional manager of Bank Rhode Island, speaks with customer Denise DiPippo, owner of Denise’s School of Dance. “We’ve noticed lots of new faces coming in,” Ricci said. / PBN PHOTO/TRACY JENKINS
RIGHT MOVES: Bob Ricci, president and regional manager of Bank Rhode Island, speaks with customer Denise DiPippo, owner of Denise’s School of Dance. “We’ve noticed lots of new faces coming in,” Ricci said. / PBN PHOTO/TRACY JENKINS

Some Rhode Island banks are defying what’s reported to be a national trend of a decreasing number of branches.
“U.S. banks continued to shutter more branches than they opened in the third quarter, extending a multiquarter trend, as customers do more routine banking business online and reduce the relevance of traditional branches,” according to a report released in November by SNL Financial, which provides financial data and analysis for several business sectors, including banking and financial services.
Across the United States, banks had a net reduction of 390 branches in the third quarter of 2013, according to the SNL Financial analysis.
“That was roughly on par with the second quarter and marked a greater level of net closures than in the two previous quarters, when branch counts also declined,” the report said.
“Mergers and acquisitions, too, are playing a role, bankers and analysts have told SNL, as banks consolidate branches to save costs after closing deals,” the report said.
“It should be noted that the majority of branch closings nationwide can be attributed to moves by a few large banks,” BankNewport Executive Vice President of Community Banking Robert E. Maddock said. “Having said that, BankNewport closed a small branch in Newport in 2012 that was not meeting our growth objectives.”
Still, SNL Financial findings of a decline in branches nationwide doesn’t hold true for BankNewport.
With a dozen branches, BankNewport is growing that number to 15, with three new branches in North Kingstown, Cranston and Coventry expected to be completed by the end of first quarter of 2014, said Maddock.
“The acquisition of branches in Coventry and Cranston presents a real opportunity to grow the BankNewport franchise into towns that are contiguous to our current branch footprint, can be supported by our current marketing efforts and offer the ability to acquire and grow an existing customer base from day one,” said Maddock.
The smaller square footage covers all the required customer services and makes use of technology such as iPads. North Kingstown will be the first BankNewport branch without a traditional teller line, and instead offer “concierge-like” banking with a one-on-one focus. Over the past four quarters, from the fourth quarter of 2012 through the third quarter of 2013, Rhode Island had a net zero opening and closing of branches, according to SNL data, with five closures and corresponding openings balancing them out.
Technology is driving evolving customer behavior, with an increasing number of banking services online or on mobile phones.
“This has resulted in less foot traffic in many branches, providing banks a reason to close them,” the SNL Financial report said.
That holds true for Bank of America, said spokesman T.J. Crawford.
“The dramatic increase in the number of customers using online and mobile banking certainly plays a significant role in our decision-making process,” said Crawford.
Bank of America closed two branches in Rhode Island in 2012. The bank closed a branch in Warwick in March 2013 and one in Providence in October 2013, leaving 34 Bank of America branches in the state.
“Our goal is to find the right mix of options for customers to do their banking, and that changes based on their habits,” said Crawford.
Technology is about ease of transactions, but a successful bank is still built on customer service with human interaction, said Senior Vice President and Director of Retail Banking for Bank Rhode Island Steven Parente.
“Technology is built to transact business. However, the physical location and the people at that location are the relationship piece,” said Parente.
“At the end of the day, if you have financial business, if you want to invest money or borrow money, you really want to look at the person across the desk from you who is going to handle your money,” Parent said.
Bank Rhode Island’s 18th branch opened in Coventry in December 2012 and its 19th will open in Wakefield next spring.
BankRI’s recently opened branch in Johnston is a relocation of an older branch nearby, so it’s not a net addition. Although there’s no data yet on any increase in foot traffic or customers since the branch opened on Oct. 28, the highly visible new building at a renovated shopping plaza with easy access is attracting attention and walk-in traffic, said BankRI Vice President and Regional Manager Bob Ricci, who manages nine branches in the northern region of the state, which includes Johnston. “We’ve noticed lots of new faces coming in,” said Ricci. “There’s probably been a slight increase in foot traffic and some of that may be the curiosity factor, but that’s OK – we want people to come in and sit down and establish a relationship with us.
The new branch also represents the bank’s investment in the community, said Ricci.
In addition to investing in the branch itself, BankRI provided $12 million in financing to 1450 TC LLC, the developer of the Johnston Town Centre project where the branch is located.
Some Rhode Island banks are holding steady, such as Coastway Community Bank, which went from credit union to community-bank status in 2009.
Coastway has nine branches and no immediate plans to increase the number of locations, said Coastway President and CEO Bill White.
For Westerly-based The Washington Trust Co., expanding the number of branches in Rhode Island is a key strategic initiative, said Senior Vice President of Marketing & Investor Relations Elizabeth B. Eckel.
Washington Trust has 17 branches in Rhode Island and one in Connecticut. The bank has been increasing its statewide presence over the years with new branches, including one in Warwick in 2009, one in East Providence in 2011 and one in Cranston in 2012.
The bank is in the process of renovating a former restaurant on Atwood Avenue in Johnston targeted to open as Washington Trust’s 18th branch Rhode Island in the first quarter of 2014.
“As far as Washington Trust is concerned, we believe there are still advantages to having a physical presence in key cities and towns and are committed to expanding in Rhode Island where we do not have a location,” said Eckel. •

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