Grand openings, new offerings and consolidations: The region has never held so many choices for businesses and consumers seeking bank services
By: Mike Mathis
When Randy Hanks was first asked if he would be interested in helping form a new financial institution, he wasn’t exactly banking on the venture succeeding.
There were, after all, plenty of banks in Mercer County, from locally-based establishments such as Hopewell Valley Community Bank and Yardville National Bank to large regional concerns like PNC and Commerce, he said. Mr. Hanks asked himself, "Could the region support another bank?"
"It was the first question on my mind," recalled Mr. Hanks, president and chief executive officer of First Choice Bank in Lawrence.
"I came back (from a meeting with First Choice organizers) with a no, but came around and thought there was a need for a commercial bank closely tied to the community."
Mr. Hanks’ change-of-mind paid off: First Choice Bank opened March 31 and is prospering, he said.
"I kind of turned myself around," Mr. Hanks said.
The success of upstarts such as First Choice Bank and The Bank of Princeton, which began operations this spring in Princeton Borough, as well as the recent purchase of Yardville National Bancorp by PNC Financial Services Group Inc. are among the changes in Mercer County’s banking industry that have some banking executives and observers scratching their heads, trying to make sense of it all.
The changes are simply a reflection of the region’s strong economy, said John Hall, a spokesman for the American Bankers Association, a Washington, D.C.-based trade organization for the banking industry.
"You’re seeing a very healthy economy, and when you see that, the competition extends to small banks and large banks," Mr. Hall said. "If everyone is doing well, you’re going to have a competitive, bustling economy."
A strong economy was the primary reason why PNC announced its decision in June to acquire Yardville for $403 million, according to PNC. Yardville has $3 billion in assets and 33 branches in central New Jersey and eastern Pennsylvania.
"This acquisition is consistent with our strategy of expanding PNC’s distribution in the rapidly growing and affluent Middle Atlantic region while maintaining our disciplined approach to capital deployment," PNC President Joseph C. Guyaux said in a statement announcing the purchase.
"The transaction results in leading deposit share in several very attractive counties in New Jersey," Mr. Guyaux stated.
At least one local bank executive said he thinks banks such as his and other community banks will benefit from the changes afoot, particularly the purchase of Yardville by PNC.
"Where there is change, there is opportunity," said James Hyman, president and CEO of Hopewell Valley Community Bank. "This is probably one of the biggest opportunities our bank will have since it formed. This is big for us."
Mr. Hyman said changes on the local banking landscape mean that Mercer County is a great place to do business because of its vibrant economy and diverse communities, from municipalities populated with state workers and residents with a high net worth to laborers who reside in blue collar towns.
"There’s an awful lot of activity going on in our community," Mr. Hyman said. "The opportunities are there, and I think we have a dynamic marketplace where there’s a lot happening. I’m glad to be here."
It’s not only the small community and local banks that recognize the value of maintaining a presence in Mercer County. National banking conglomerate Citibank recently opened a full-service financial center in Lawrence. The financial center offers personal and business banking, investment accounts, mortgages, and insurance. Customers also can participate in a free financial needs assessment program.
Mr. Hall said mergers of larger banks often create a fertile atmosphere for new community banks to set down roots because the decision-makers at the banks targeted for purchase often lose their jobs afterward.
"Often times with a merger, you’ll have layoffs of top executives, and they’ll start a new bank and reach out to their community base," Mr. Hall said.
Peter Crowley, president and CEO of The Bank of Princeton, said the decision to start that institution was made because there were no community banks in Princeton to serve the large number of small businesses and law firms located there.
"The market was under-served, and we were able to serve that niche," said Mr. Crowley, a former executive with Bank of America, PNC Bank and Midlantic Bank. "The larger banks are always pushing for the bigger deals. Their business model moved them away from local business."
Mr. Hanks said First Choice Bank was started when 15 people who live or work in Mercer County saw a need for a new community bank, that wasn’t being fulfilled by other local or regional institutions.
Mr. Hanks surmised that Yardville National Bank was sold because it had reached a crossroads. When Yardville National Bank reached $3 billion in assets, it inhibited their ability to provide senior level direction to small business, he said.
"We thought there was a need for a smaller community bank to focus on small and medium size businesses," Mr. Hanks said.
"We felt there would be continued consolidation in the Mercer County market in terms of some of the locally owned banks," he added.
Mr. Hanks said the changes in local banking have enabled First Choice to carve a niche in the commercial banking segment. "We are looking to position ourselves to fill the void created by their consolidation," Mr. Hanks said. "We strongly believe a small bank can’t be everything to everyone."
Mr. Crowley said the influx of larger banks that are not based in Mercer County is good for smaller banks such as The Bank of Princeton. "It’s very beneficial for community banks when larger banks that are out of state purchase larger banks (such as Yardville National Bank)," Mr. Crowley said. "It allows the customer to look around."
"Any change in the market that would allow customers to (select) local banking is good," said Mr. Crowley, whose bank hopes to open a branch in Hamilton by the end of the year.
Mr. Hanks said Mercer County is large enough for large and small banks to prosper. "As long as they stay true to their customers, they’ll be OK. There’s plenty of room for everyone," he said.

