Citizens builds off Charter One's base

CNY Business Journal (1996+), Apr 29, 2005 by Rombel, Adam

SYRACUSE - All Charter One Bank branches across Central New York will formally don the Citizens Bank name, logo, and signage on May 13, bank officials say.

Citizens Financial Group Inc. - a $140-billion bank holding company based in Providence, R.I. - acquired Cleveland-based Charter One Financial, Inc. and its extensive upstate New York banking business last Aug. 31.

Citizens alms to rank among the top five banks in the Syracuse metro area in market share of deposits by the end of 2006, says Richard Shirtz, president of Citizens Bank's 14-county Syracuse district. The bank currently ranks 10th in deposits in the Syracuse metro area, with roughly $250 million, the bulk of those gained under the Charter One banner. Number five is JPMorgan Chase & Co., with about $850 million in deposits in the Syracuse market, according to SNL Financial, a Charlottesville, Va.-based financial-research provider.

"We'd like to be number one in that top five, but we have to be realistic," Shirtz says.

The number-one spot is held by M&T Bank Corp, with about $1.5 billion in deposits.

Citizens Bank officials concede that to make such market-share gains in the slowgrowth Central New York market, it will have to take business away from rival banks.

"We're all after the same economic growth in Central New York. Every bank is looking to take market share from other banks," says Charles (Charlie) Vita, president of Citizens Bank's nine-county Rochester district, which includes Seneca, Cayuga, and Tompkins counties.

Citizens plans to open branch offices in Ithaca and North Syracuse this summer. After that, the bank will look to establish a branch in downtown Syracuse, where it currently has none, says Shirtz. Later in 2005, it will consider still more branches, he adds.

Citizens is focusing a great deal of attention on winning corporate-banking business in central and upstate New York, where Charter One primarily catered to retail customers and small businesses.

Citizens is leveraging Charter One's retail-branch presence and adding to it to help win business clients, but doesn't necessarily need branches-to grow business loans.

"Ninety percent of what we do is direct sale," Shirtz says.

Citizens Bank is "ahead of our plan" in acquiring middle-market commercial banking customers since last summer's acquisition of Charter One, Shirtz says. "We have been pleasantly surprised by our success thus far in the Syracuse District." He declined to provide numbers.

In early May, Citizens Bank expects to complete its Syracuse district office at 250 S. Clinton St. by leasing an extra 7,500 square feet on the second floor while keeping 3,000 square feet of its current fifthfloor space. The 10,500 square feet of office space will house 24 employees, with room for growth to 37, say Citizens officials.

The staff is comprised of 12-people in middle-market commercial banking (serving companies with between $10 million and $250 million in annual revenue), six retail-bank employees, and six business bankers serving companies with less than $10 million Ilion in annual revenue, Shirtz says. The bank also plans to have cash-management, leasing, community development, government banking, and commercial real-estate product specialists operating from the office, he adds.

Citizens Bank has a long way to go to build brand-name recognition in central and upstate New York. On that note, Citizens on April 28 announced, in partnership with Home Headquarters, Inc., the creation of a $6.4 million neighborhood-investment program in Syracuse. The bank will provide a package of loans and grants for affordable housing, home improvement, economic development, financial literacy, counseling services, and neighborhood beautification. The move came eight days after Citizens Bank announced a similar program in Rochester, totaling $13.5 million.

The neighborhood-investment programs will help Citizens meet its obligations under the federal Community Reinvestment Act, says Susan L. Murad, vice president and director of communications.

Last September, Citizens Bank New York reached a multi-year agreement to sponsor Syracuse University athletics. The dollar amount of the sponsorship is triple what Charter One planned to pay for its sponsorship of SU sports, say Shirtz and Vita.

Citizens bought Charter One for about $10 billion. The acquisition added $50 billion of assets and expanded Citizens,' footprint into New, York State and the Midwest.

Citizens is the number one Small Business Administration lender in New England and the Mid-Atlantic region.

Citizens is a wholly owned subsidiary of the Royal Bank of Scotland Group. It is the 10th-largest bank in the United States ranked by assets, eighth-largest ranked by deposits, and seventh-largest ranked by branches.

In 2004, Citizens had net income of nearly $1.1 billion, excluding acquisition costs, net of taxes. This was a 28 percent increase over comparable 2003 net income of $854 million.