The Somerset Trust building in Westmoreland is bucking the industry trend

Somerset Trust Co.’s new bank branch. in Hempfield, which opened in late September, is definitely not your father or grandfather’s financial institution.

It has the traditional cashiers, loan officers, conference rooms and a vault. But the two-story building across East Pittsburgh Street also has a coffee bar where customers can relax and an outdoor rooftop area that looks like it could be home to live entertainment.

“It’s a different kind of branch. We’re creating a space where people can work together … and create and try new things,” said Alison Cook Hoffman, vice president of marketing and customer experience.

Somerset Trust is opening new branches at a time when the industry trend is to reduce its physical footprint as more customers rely on digital banking in the post-Covid era.

“We believe that branches are the key to starting relationships with customers and our communities. We view branches as a means of providing exceptional service, and the physical location sends the message to the community that we are here to stay and invested in becoming a part of the community,” Hoffman said. “We want to be where people can reach us.”

Somerset Trust’s branch network is spread across Southwestern Pennsylvania, Northern Maryland and Northern Virginia. The plan is to build offices to meet the needs of customers, Hoffman said.

The strategy for opening offices in Westmoreland County — the bank has 12 in total — is to expand its customer base, she added. Somerset Trust, which reported $2.1 billion in assets as of Sept. 30, served the Greensburg market from an older building on East Pittsburgh Street, adjacent to its new site.

The family-owned bank followed with a new branch along Route 30 in Unity — its 44th branch — in late October. It is also building another location, at the corner of Huff Avenue and Route 119 in South Greensburg, which is expected to open next year.

National picture

In 2010, there were 98,519 bank branches in the country, but only 77,690 active bank branches as of October 2023, according to S&P Global Market Intelligence.

Banks closed branches in 2020, 2021 and early in the COVID-affected year 2022. There was a net loss of 2,927 bank branches in 2021, a record for closures in a single year, according to S&P. And 2021 followed 2020’s record year for bank branch closures.

Among the reasons for the closings are the number of bank consolidations, in which the acquiring bank becomes the owner of one or more banks in close proximity, said Steven Rader, president of Bancography, a Birmingham, Ala.-based financial services industry consulting firm.

There is a greater demand for electronic services, where customers can perform their basic banking services, such as making a deposit, electronically, Rader said.

Somerset Trust opened just one of six branches in the state in October, according to S&P Global Market. The closing of four bank branches in October left the state with 3,449 active branches, according to S&P Global Market.

It competes in a market where national and regional banks have a foothold — PNC Financial Services Group, Citizens Bank, Key Bank, First National Bank, S&T Bank, First Commonwealth Bank and Dollar Bank, to name a few.

“We are always competing with other banks in other markets. We do well in areas where people like the convenient style of banking,” Hoffman said.

Closer to home

While Somerset has been expanding its branch reach, Pittsburgh-based PNC Financial has scaled back its massive branch network. In April, it announced plans to close 30 branches in seven states. This was followed by a recent announcement that it will close 19 branches in February 2024, including one in Newcastle.

PNC is deciding to close bank branches as customer needs evolve and it sees a decline in transaction patterns, a company spokesman said. When that happened in the Pittsburgh market, the spokesman said PNC transferred customers to new branches that were an average of seven minutes, or three miles, from the closed branch.

It previously closed its PNC branch in downtown Greensburg, choosing to serve the market with two branches on Route 30 in Hempfield — one east of town and one west of it. But to put these branch closings into perspective, the national bank still has about 2,300 branches nationwide.

With customers willing to drive longer distances to do their banking, Rader said banks can look at customer traffic data to determine if they can close a branch without losing the business those customers generate.

Although it is closing some locations, PNC said it has made a “significant investment” in its branch footprint over the past five years, building new ones and renovating others, the spokesman said.

“In Pittsburgh, we’ve opened four new branches since 2020 and renovated many others throughout the region,” said spokeswoman Olivia Lamel.

PNC said it continually studies the transaction patterns of customers and prospects to determine how it can most effectively meet the needs of the communities it serves, Lamel said.

Rader, the industry analyst, said that while some banks are still closing branches, the trend has slowed.

“All the easy decisions (to close branches) have been made,” Rader said.

Joe Napsha is a contributor to the Tribune-Review. You can contact Joe by email at [email protected] or via Twitter .

Leave a Comment

Your email address will not be published. Required fields are marked *