Rondout Savings Bank (RSB) has purchased the former uptown Kingston location of Key Bank at 267 Wall Street. It plans to renovate the building and move into it in the late winter of 2024, a couple of months before the row of stately red tulips bordering the Old Dutch Church graveyard across Wall Street sway in the springtime breeze.
The local savings institution affixed a sign on the brick outside wall of 267 Wall early last week. The sign included RSB’s iconic logo, a stylized version of the Rondout Lighthouse, whose beams the bank is hoping will shed extra light on Kingston’s bustling Stockade banking community.
At mid-2023, the United States had 4071 commercial banks and 574 savings banks.
The planned move marks a local milestone in the competition between the huge commercial banks that dominate the American economy and the smaller community banks that are geographic in character and allegiance.
RSB will transfer the staff at its 130 Schwenk Drive office to the Wall Street location. It also expects to transfer some of its business bankers and its financial planning and investment specialist presently in the loan center to the rear of its 300 Broadway headquarters to the new office. And some top Rondout Savings management, including CEO Cheryl Bowers, will have offices at both 300 Broadway and 267 Wall.
In February 2022, a Keybank spokesperson explained that the closing of its Wall Street operations was due to the increasing preference of its customers for online banking.
The office was losing money, and Key closed it. It’s ironic that another bank now sees the location as offering irresistible new opportunity.
Keybank National Association, according to a Federal Reserve survey earlier this year, was in terms of deposits the twentieth largest bank in the United States, As of midyear 2023, according to data supplied by the Federal Deposit Insurance Corporation, Key Bank, headquartered in Cleveland, had $148 billion in deposits and 981 branches nationwide, to which the deposits in its four Ulster branches and its ATMs added $329.4 million. RSB’s deposits in its four Ulster County branches, meanwhile, were $453.7 million. RSB’s Hyde Park branch in Dutchess County added $23 million to its deposits total.
Role reversal
Twenty years ago, Key boasted of $287 million in deposits at its ten Ulster branches as contrasted to RSB’s $146 million at its three offices. Key’s Ulster County market share of 13.37 percent was almost double that of RSB’s 6.81 percent. Ten years ago, that gap had narrowed to 7.26 percent market share for Key versus 6.63 percent for RSB because of shrinkage of Key’s deposit base and the 50 percent growth in RSB’s deposits.
The most recent decade and especially the last year, in which Key’s Ulster County deposit base decreased by $17 million while RSB’s increased by $52 million, completed the role reversal. In terms of Ulster County market share, RSB now has 9.68 percent and Key 7.03 percent. Key is down to four Ulster County offices, one on Ulster Avenue in the Town of Ulster, and one each in Stone Ridge, Kerhonkson and Marlboro.
It’s clear that Key figured it needed less space for its Ulster County business, and that RSB now needs more. But why did RSB choose to abandon its plans to expand its Schwenk Drive location after buying the former Spectrum space next door to it and choose instead to locate several tenths of a mile away in an abandoned bank on a particular block on Wall Street? Is physical distance that important?
The answer explains a lot about the differences in strategic thinking between the nationwide or regional banks and local banks that put almost all their eggs in one basket, a single geographic area — in this case, Ulster County.
Where the action is
The ten biggest banks dominate the New York State economy with — depending on how you figure it — from two-thirds to four-fifths of deposits and assets. Ulster County marches to a different drummer, with its savings institutions contributing 40 percent of total deposits of almost $4.7 billion in mid-2023. Ulster County deposits In banks not owned by holding companies constitute ten percent of the state total — a remarkable statistic considering that Ulster has less than one percent of the state population.
At the end of June this year, Wells Fargo’s single Ulster County office recorded a tidy increase in deposits to $758,177 from the 2022 total of $128,650. A person named Jason who answered the local phone didn’t have an explanation of the dramatic increase in deposits. That wasn’t information which the local office was privy to, he said. The national number he provided offered services only to those with a Wells Fargo account or wishing to start one.
Like squirrels stashing their acorns in various places on a property, national banks move deposits around. A few years ago, according to FDIC data, Bank of America added substantially to its Ulster County deposits, only to decrease them by about the same amount later.
Among other things, Kingston’s Stockade district has since 1658 been and remains the undisputed center of Ulster County’s worlds of county government, banking, law, politics, history, real estate and insurance. RSB’s Schwenk Drive location is outside the stockade downhill from Frog Alley, which got its name because that area was once a swamp, and downhill from the just-restored walls of the Louw-Bogardus House, reportedly the first stone house built outside the wooden fence protecting the stockade inhabitants against Native-American incursions.
The Schwenk Drive RSB office may have parking spaces and friendly tellers, but it’s just outside the fringe of the Stockade community, that large and constantly changing cadre of people who all seem to know each other and do business with each other. To a born Kingstonian like Cheryl Bowers, that 17th-centory borderline has significance. To the RSB staff at the Broadway loan office, it’s a chance to be where they perceive the action will be.
And that’s Kingston’s Wall Street. To RSB, the local Wall Street is a small-town Main Street, the beating heart of Ulster County’s governmental and FIRE — Financial, Insurance and Real Estate services — economy. It’s an integral part of the changing community. providing far more than “the cold, impersonal service of out-of-town brokerage houses.”
Relationship banking
The oft-abused term “relationship banking” describes a banking strategy to strengthen customer loyalty and provide a single point of service for a range of different products and services. Relationship banking involves a personal or business banker offering products designed to help customers attain financial goals while increasing revenue for the financial institution.
American banks large and small, not excluding Key and Wells Fargo, provide a cascade of perks in order to build relationships with their customers.
There is no lack of potential advisors when a lot of social change, such as there has been in the pandemic and its aftermath, is taking place. In a time of rapid technological change, an explosion of remote and hybrid work, unprecedented geographic mobility, and growing social inequality, banking institutions cannot afford to let their advice-givers sit waiting in offices for potential customers to find them.
In 1999 Congress repealed the Depression-era law that had prohibited commercial banks from acting as investment banks and vice versa. Now, every bank had the opportunity to offer a full range of financial services. Banks could now offer complex bundles of services. Social networks and cultural inclinations mattered far more than they had.
Back to the future
With the winter holidays so near, it’s just a matter of time before showings of the 1946 Franl Capra movie starring Jimmy Stewart, “It’s a Wonderful Life,” start again.
George Bailey, played by Stewart, reluctantly assumes leadership of the family business, Bailey Brothers Building and Loan. Though “It’s a Wonderful Life,” was filmed in California, many believe the fictional Bedford Falls was Seneca Falls in upstate New York.
In the film, there’s a run on the bank caused by greedy bank board member Henry Potter (played by Lionel Barrymore), a builder of slum housing. On Christmas Eve, a Bailey relative loses a large bank deposit meant for delivery to Potter, and George in despair contemplates suicide. Hearing of the sad situation he’s in, the townspeople rally and gathers more than enough money to replace what’s missing.
George is toasted in front of his modest home as “the richest man in town.” He is given a book with the dedication, “Remember, no man is a failure who has friends.”
Though certainly on the sentimental side, the message of “It’s a Wonderful Life” about a man who gave up his personal dreams in order to help others in his community struck home with a nation that had just survived the Great Depression and World War II.
The historical and personal facts assembled in the film gave it depth. Its lesson according to a recent Smithsonian symposium, was that “creating community and serving your fellow human beings can lead and sustain us through challenging times have never been more salient than they are today.” Exploring how history was presented in a Hollywood film 75 years ago, the symposium concluded, “can tell us a lot about the nation we were and help guide us forward to what we want to become.”
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