for bank's future. (H. Johnson)
Washington Trust, the bank that for two centuries has been defined by its dominance in Rhode Island’s South County, is branching out to the Providence metropolitan area, with plans to open an office in Warwick within the year.
“I would hope that by the end of next year we are up and running and very actively so in Warwick,” said John Warren, the bank’s chairman and chief executive officer.
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And the expansion is likely to go beyond that. Washington Trust has actually had a presence in Providence since it acquired Phoenix Investment Management, which operates out of a trust facility that Washington Trust has on South Main Street in Providence. It is a relationship that Warren says has been very successful.
“We really like being in Providence,” Warren said. “It could be at some point in our strategic plan it makes sense for us to put a banking facility in Providence so some of the commercial customers who like to do business with us have the ability to do it and don’t feel they have to come to North Kingstown, which is our northern-most branch at this time.”
Aggressive thinking? Not really. Washington Trust, Warren said, has done some research, confirming that it has strong name recognition from Westerly, where it was founded, to Providence, where it recently arrived.
But it may be reflective of a changing banking scene in the Ocean State, where expansion comes from banks like Washington Trust and Bank Rhode Island, as much as it does from major players, like Citizens Bank.
“I think the big banks have their focus elsewhere,” Warren said. “Citizens is not concerned about expanding in Rhode Island. They’re maxed out. They’re more concerned about doubling their franchise going to New Jersey and Pennsylvania. Fleet’s got much larger issues that they are dealing with. Strategically, it’s hard to see them as an aggressive mover in the market.”
And Sovereign, he said, struggled some when it arrived, established its New England headquarters in Boston, and while it is rebounding well, it too has recently said it would acquire Main Street Bancorp in Pennsylvania. That turns its attentions away from Rhode Island, he suggested. Sovereign is also scaling back its Rhode Island presence, by the elimination of its branches in Stop and Shop Supermarkets.
“I think you’re going to see the core community banks taking advantage of a couple of opportunities that are out there and opening some locations,” he said.
Merrill Sherman, president of Bank Rhode Island said that Citizens and Fleet should not be counted out, but agrees that banks like hers certainly expect to expand.
“From our standpoint, yes, we’re planning to grow,” she said. “We think there are a number of significant opportunities.”
Sherman said Bank Rhode Island has carved out its niche in small to medium sized business communities, while growing deposits by $145 million over the last 18 months.
Asked about branches, she replied that was the “$64,000 question” because of the abundance of opportunities, “both in the northern part of the state as well as moving a bit south from Warwick.” She said developers approach the bank regularly with opportunities, and rattled off a number of potential locations, including Cumberland, Lincoln, Pawtucket, other areas of Woonsocket, and North Kingstown.
“There are a lot of places we’d like to be,” she said. “All of which are under consideration.”
Mark Formica, Citizens’ vice chairman, sees Citizens as very attentive to its home state.
“I think you’ve got to let the facts speak for themselves,” said Formica, speaking from Pittsburgh, where he was in meetings with Mellon Bank employees who will soon become Citizens employees as a result of Citizens’ acquisition of a substantive part of Melon’s retail business in Pennsylvania and New Jersey. “The endeavor into Pennsylvania isn’t any different than the past years, where Citizens has expanded outside of Rhode Island with 17 acquisitions.
“We’re even more aggressive about defending our home territory today,” he said.
Formica noted that Citizens will be taking over 21 Stop and Shop branches that had been occupied by Sovereign, bringing to 28 the number of supermarket branches the bank operates. Seven are in Shaw’s Supermarkets. Citizens also has 57 branches throughout the state. Formica also anticipates Stop and Shop opening six to 10 additional facilities over the next few years. “These locations pretty much cover the gaps in our network,” Formica said.
Additionally, he said, the bank is looking at some additional drive-up locations, ATMs in various shopping malls and facilities.
Formica said Citizens growth in Rhode Island is measured also by its growth in deposits and consumer loans, and maybe, most in employees. He said when he arrived at Citizens in 1992, there were 1,000 employees in Rhode Island, 700 of them in branches. He said the bank now anticipates employment in Rhode Island, with the Mellon acquisition, reaching 4,200 employees, 800 of them in branches.
For Washington Trust it is a matter, after slightly more than two hundreds years of focusing on South County, of realizing that if there is to be substantive growth, the bank has to break out of its geographic box and expand toward Providence.
“Let me talk to you in terms of the latest census report,” Warren said. “In 1990 South County had 108,000 people. South County ended up being the fastest growing county in all of Rhode Island. And we’re up to 122,000 people, stretching from Westerly to Narragansett up to North Kingstown and back over, which is a pretty decent size territory.
“But 122,000 people, relatively speaking, is not a lot of people,” he said. “If you look at Warwick or Cranston, the two of them have 80,000 to 85,000 people apiece. In two cities you would equal the entire population of South County. And as a commercial bank, as you look at businesses, the number of businesses in Cranston and Warwick are enormous compared to the number of businesses in South County.”
