ALBANY — A new state law allows credit unions to take part in New York’s banking development district (BDD) program. 

State lawmakers approved the bill earlier in 2019 and Gov. Andrew Cuomo signed it in December. The New York Credit Union Association (NYCUA) “strongly supported” its passage, per a news release on the association’s website.

The Assembly version of the bill was introduced by Assemblyman Kenneth Zebrowski, (D–New City), while Sen. Velmanette Montgomery (D–Brooklyn) introduced the Senate version.

“Passage of this law is a major victory for credit unions and a major victory for New Yorkers — especially those who reside in underserved and under-banked areas,” William J. Mellin, president and CEO of NYCUA, contended. “With this new law, more New Yorkers will have critical access to the credit union and financial system.”

New York created the BDD program in 1997 to encourage financial institutions to establish branches in “economically distressed” communities across the state that have a “demonstrated need” for banking services. 

Banks and trust companies have “largely underutilized” the program, NYCUA contends. At the same time, credit unions weren’t able to participate “due to the language” in the original legislation establishing the program.

Financial institutions that are approved for a BDD designation are eligible to receive up to $10 million in subsidized public deposits and other benefits, including below market-rate deposits from New York State. These deposits are intended to lower the financial risk that the branch may incur when opening in an underserved community, “usually” comprised of low- and moderate-income households.

The legislation also represents the “first time in state history” that credit unions are permitted to accept public deposits, NYCUA said. The organization “continues to advocate” for additional legislation that would expand credit union deposit access to state and local governments.  

SYRACUSE — M&T Bank expects to move its Central New York regional headquarters office and main local branch to 250 S. Clinton St. at the end of the second quarter or early third quarter.

The leased space will replace the bank’s current historic home overlooking Clinton Square, which it has agreed to sell.

M&T Bank will occupy the entire 35,000-square-foot fourth floor of the six-story, 180,000-square-foot 250 S. Clinton St. building for office space. 

“The large floor plate will allow us to position entire departments in the same area and upgrade the work environment for our employees, which we think will ultimately also benefit our customers,” Allen Naples, M&T Bank’s Central New York regional president tells CNYBJ in an email. 

In a previous interview in November, as M&T Bank was still looking for its new office, Naples told CNYBJ that being able to have all of the bank’s staff on one floor, with an open-floor design with “a lot of ambient light” was important. The bank chose this building from among three sites in the city of Syracuse that made its final list, after looking at a total of 12 locations, per Naples.

The previous tenant of the fourth-floor space was an AT&T call center.

M&T Bank will also use 2,800 square feet on the building’s first floor for branch space. The new branch will feature an array of consumer and commercial products and services, as well as an onsite expert in small business and SBA lending, the bank says. It will also have a 24-hour ATM vestibule available to customers after branch hours.

All of M&T Bank’s 140 employees at its CNY regional HQ at 101 S. Salina St. will be moving to the new office at 250 S. Clinton St.

M&T says it will invest about $7 million to renovate both the fourth floor and first-floor spaces, as well as upgrade them with the latest in technology, furniture, and equipment. The bank has yet to bid the renovation work out to construction contractors.

Current building sale

M&T Bank on Jan. 21 announced that it has agreed to sell its current, regional headquarters office at 101 S. Salina St. to Douglas Development Corp., a Washington, D.C.– based real-estate developer. The bank didn’t disclose the price or other financial terms. 

The 10-story office building — which was one of Syracuse’s first steel-frame structures, built in 1897 — has about 120,000 square feet of space in total. It also has an attached parking garage that has more than 500 parking spaces.

Douglas Jemal, principal of Douglas Development, said he plans to create a mix of apartments and ground floor retail spaces, with the details to be worked out once he takes ownership. The sale is expected to be completed in the second quarter of this year, M&T Bank said.

“This gorgeous building near Clinton Square sits at the heart of the city’s center, and we intend to return it to glory, and to help contribute to the rejuvenation that’s happening in downtown Syracuse,” Jemal said in an M&T news release.

Douglas Development is currently redeveloping several buildings in downtown Buffalo, including the city’s tallest building, known as Seneca One, into commercial space and residential units.

“Douglas has decades of experience thoughtfully preserving and remaking large, historic buildings like ours with truly revolutionary results,” Naples added. M&T Bank worked with Cushman & Wakefield/Pyramid Brokerage Co. on the building sale.

Buffalo–based M&T Bank Corp. (NYSE: MTB) has 45 offices and employs nearly 500 people in its Central New York region, which includes Onondaga, Cayuga, Oswego, Madison, Herkimer, Jefferson, Lewis, Oneida, and Seneca Counties. It holds the largest share of deposits in the Syracuse metro area and the broader 16-county Central New York region that CNYBJ covers.                       

DeWITT — Community Bank System, Inc. (NYSE: CBU) recently reported that its net income increased more than 5 percent to $42.9 million in the fourth quarter from $40.8 million in the fourth quarter of 2018. 

The DeWitt–based banking company’s earnings per share (EPS) rose to 82 cents a share from 78 cents a year prior.

But its adjusted net EPS, which excludes acquisition expenses and an unrealized loss on equity securities, was 83 cents in the fourth quarter, up 5 cents from the fourth quarter of 2018. Community Bank’s adjusted net EPS beat analysts’ expectations of 80 cents a share, according to Zacks Equity Research. Community Bank has beaten consensus EPS estimates four quarters in a row, Zacks says.

“Our 2019 very solid fourth quarter was characterized by revenue growth, improved earnings along with a continuation of positive operating metrics compared with the prior year quarter. Moreover, we are pleased with the company’s performance throughout 2019, during which we continued to utilize acquisitions to expand and strengthen our service area, organically grew loan and deposit portfolios, increased revenue to nearly $590 million, and extended our uninterrupted streak of dividend increases to shareholders,” Mark E. Tryniski, Community Bank System’s president and CEO, said in the banking company’s Jan. 22 earnings report. “Our acquisition of Kinderhook Bank Corp. during third quarter 2019 extended our market reach into the Capital District of Upstate New York, a region with attractive economic and demographic characteristics. The Company’s fourth quarter definitive agreement to acquire Steuben Trust Corporation will provide additional retail strength to our existing Western New York service area along with providing entry into two new Western New York counties. The transaction is also expected to be immediately accretive to earnings. Organic revenue increases in our employee benefits services and insurance services businesses were responsible for higher noninterest revenue in 2019. Total loans at year end increased by more than $600 million, driven by organic growth and by the Kinderhook acquisition.”

Earnings details

Community Bank’s total revenue in the fourth quarter of 2019 was $149.9 million, up 5.8 percent from the fourth quarter of 2018. The banking company recorded a $5.4 million, or 6.1 percent, increase in net interest income and a $2.9 million, or 5.4 percent, rise in noninterest revenue between comparable quarters. The rise in net interest income was driven by largely by a $733 million increase in average earning assets between the periods due to both the Kinderhook acquisition and organic growth in earning assets, partially offset by a decrease in net interest margin. 

The increase in noninterest revenue was due to a $1 million, or 5.8 percent, increase in deposit and other banking revenues and a $1.9 million, or 5.2 percent, increase on non-banking noninterest revenue, Community Bank reported. Revenue was up $1.5 million in the employee-benefit services business, and wealth management and insurance services revenue rose about $400,000 from the fourth quarter of 2018 to the fourth quarter of 2019.

Community Bank System says it operates 230 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts through its banking subsidiary, Community Bank, N.A. With assets of $11.4 billion (including the former Kinderhook), Community Bank is among the nation’s 150 largest financial institutions.