Ivy Leaguer leaves key post at NBT Bancorp of Norwich

CNY Business Journal (1994-95), Apr 17, 1995 by Grossman, Naomi

Butare's plan was to centralize the branches of the bank. "To make banking easier," he wrote in the 1993 annual report, "we integrated our retail banking and lending functions." Butare felt that many of the banks that had been acquired by NBT in recent years had not been properly assimilated into the company. Butare decided to centralize all loan decisions in the home office to impose greater control and efficiency. But this also meant that loans that used to take a day--many of which were done with a handshake--were now taking three or four days. And they were processed by people who did not know the applicant personally.

"In a small community, it doesn't take long to find out that you can't get a decision within a day," says Robitelle. "In small towns, where most of our branches are, the bank manager is like the president--he made all the lending decisions. But Butare didn't operate like this. The local managers lost all their authority."

Martin R. Doorey, director of corporate communications for NBT, says that lending decisions were centralized because of new federal lending guidelines. "It was the responsibility of the bank to administer these new regulations in the best way that it could."

But Anangnost doesn't believe the new regulations had anything to do with the changes Butare instituted. "He wanted to take the bank and build an infrastructure to enable it to be a billion-dollar bank," says Anangnost.

Butare also dissolved the local advisory boards of smaller, community banks that had been acquired by NBT. They were usually comprised of local business people identified as leaders of the community, who received a small fee for participating in the bank's affairs.

Doorey believes that the shift in attention away from the local branches is a very emotional issue--one that clouds the fact that things didn't change that much. "There only seemed to be a bigger shift away from Norwich than there actually was," he says. "Maybe they were not getting the same kind of attention that they were used to, but we haven't lost relative market share in Norwich since 1989."

James McNeil, owner of McNeil's Jewelers in Norwich, says his family business has been doing its banking at NBT since 1946. While he feels that the bank changed under Butare, he couldn't see pulling his accounts out. "I had been happy there for a very long time, but it just became more difficult to do business with them," he says. "It used to be that you would walk in and people would greet you by name, but then there were all these big changes and new faces."

But another local businessman who had been banking at NBT for years said that, while he also kept most of his corporate accounts at NBT out of convenience, he did open accounts at another bank. He felt that NBT did not create an atmosphere that catered to local needs.

While some felt that Butare was neglecting Norwich, the CEO was trying to expand the bank's borders. He opened up business banking centers, which are used mainly as commercial-loan centers, in New Hartford, Vestal, and Binghamton. The center in Binghamton did well enough to be converted to a full-service bank. Butare also bought three branches in Clinton County from Key Bank. But one of the area's biggest employers, Plattsburgh Air Force Base, subsequently closed down, hurting the bank's business.