FIVE STAR BANK ANNOUNCES TRANSFORMATION TO FULL-SERVICE BRANCH MODEL
Reimagining Local Banking with Technology Enhancements and Modernized Staffing Approach Resulting in Five Branch Consolidations and a Six Percent Reduction in Workforce
JULY 17, 2020, Warsaw, N.Y. –Today, Five Star Bank, a leading provider of consumer and commercial lending services across the Western, Central and Southern Tier regions of N.Y., formally announced a transformation that will streamline its retail branches to better align with shifting customer needs and preferences. Rapid advancements in financial technology are giving consumers increased options to bank from anywhere, with 71 percent of U.S. banking customers regularly using online banking services, according to the Federal Reserve Board of Governors. At Five Star Bank, this trend is evident in total daily in-branch teller transactions declining by six percent annually since 2018, and similarly in the first three months of 2020, prior to COVID-19.
“While our values and service promises remain steadfast, we have a fundamental responsibility to our customers, associates and the communities we serve to adapt our approach as market conditions change,” said Martin K. Birmingham, CEO, of Five Star Bank. “Over the years we’ve launched technology and developed unique partnerships that offer customers a more seamless, integrated experience, regardless of how they choose to bank with us. Now, as the reliance on, and customer demand for, digital banking services rise, our branch offices must evolve once again.”
As part of the bank’s continuous effort to meet market demands and client needs, a nine-month comprehensive assessment of all lines of business and functional areas was conducted, in partnership with a leading process improvement organization. This data-driven analysis identified, among other things, overlapping service areas, automation opportunities and streamlining of processes and operations that would enhance customer experiences and facilitate the long-term sustainability of current and future branches. Changes include the launch of an advanced digital banking application, an enhanced branch model and a new in-branch staffing approach:
Advanced Digital Technology: Five Star Bank is delivering robust online banking through a new digital banking platform—a powerful suite of banking tools designed to offer convenient financial management whenever, wherever. Additionally, the bank is installing Interactive Teller Machines (ITMs) that offer customers a new option for completing more complex transactions, reducing teller lines, and providing more hands-on support than an ATM.
Enhanced Branch Model: The Bank is strengthening its presence in communities by reducing operational complexity and uniting resources and expertise in central neighborhood areas. Customers will now have convenient access to wealth management, insurance and lending services under one roof, located near frequently visited locations like shopping centers, gas stations and retail stores.
To achieve this, 11 branches in suburban communities with overlapping areas will be consolidated to create five full-service financial solutions centers. Branches impacted include Batavia East Branch consolidating into the Batavia West Branch, Bath Branch and Avoca Branch into the Bath West End Branch, Elmira Heights Branch into the Horseheads Branch, and Geneva Branch into the Geneva Plaza Branch. While the bank is also consolidating the Olean Branch into the Allegany Branch, it will maintain its Olean Motor Bank at 124 West State Street. Similarly, the bank will maintain its Geneva Motor Bank at 65 Elizabeth Blackwell Street. Notices to impacted customers in these locations will be delivered early next week.
Modernized In-Branch Staffing Approach: As a community bank, Five Star is driven by its people – associates who live and work in the communities it serves. As changes to the branch footprint take place, the current branch staffing structure also needed to adjust. The new structure included dividing territories more equitably to create smaller team sizes and offer area sales managers more opportunity to coach and enhance the customer and associate experience, recognizing internal talent by awarding several promotions, and reassigning staff to alternate branch locations to ensure all offices provide a full-suite of services. Additionally, the bank is currently enhancing its internal training program with the assistance of third-party experts to provide associates with additional opportunities for advancement.
These consolidations represent about 10 percent of the branch network and impact approximately six percent of the total workforce. Where possible, those impacted are being offered alternative roles or the opportunity to apply for open positions in other areas of the company. Separated associates will receive a comprehensive severance package based on tenure.
“We care deeply about our associates and determinations were made after months of careful consideration and thoughtful analysis of branch utilization and financial impacts,” said Birmingham. “This was a very difficult decision to make but it was done with equity and dignity at the forefront. It’s never easy to say goodbye to colleagues, but to successfully serve our clients now and long into the future, embracing change was necessary.”
Birmingham added that although transformation is never easy, the future for Five Star is bright. A strong, integrated approach, comprehensive capabilities and staying grounded through customer relationships and interaction positions the brand well for continued growth.
The bank plans to continue building market share by adding two new branches in the City of Buffalo next year and expanding services across our operating footprint with unique offerings like commercial lending and in-branch licensed Certified Personal Bankers (CPBs), wealth management and insurance professionals to provide clients with personalized, timely solutions.
Frequently Asked Questions:
Why make these changes and why now?
While our values and service promises remain steadfast, Five Star Bank is continuously enhancing its banking model to reflect changes in customer needs and preferences. We are continuously enhancing our banking model, with numerous advancements to our technology—both customer digital (online and mobile) and in-branch--to provide customers with a seamless, integrated experience, regardless of how they choose to bank with us. As customer usage for digital banking solutions increases and in-branch traffic declines, our approach to branches must adapt to these changes in customer preferences.
Is this change because of COVID-19?
No. We began a data-driven assessment of our branch network in 2019. While COVID-19 has accelerated many of the factors (e.g., declining branch usage, increased role of technology) that caused us to examine our branch effectiveness relative to customer needs, we were seeing changes in customer behaviors—including increased digital usage—as early as 2018. Evolving customer behaviors has reduced the need for extensive and complex branch networks.
What branches are impacted?
- Bath and Avoca have consolidated into Bath West End
- Elmira Heights has consolidated into Horseheads
- Our Downtown Elmira branch is unaffected
- Batavia East has consolidated into Batavia West
- Geneva has consolidated into Geneva Plaza
- Our Geneva Motor Bank, located at 65 Elizabeth Blackwell Street, will remain open and continue to provide transactions services through our 24-hour, drive-thru ATM’s.
- Olean Main has consolidated into Allegany
- Our Olean Autobank, located at 124 West State Street, will remain open and continue to provide transactions services through our staffed drive-thru lanes, as well as continuing to provide ATM and Night Drop Services.
Why were certain branches impacted and not others?
We’ve moved to a Community Branch “hub” model which meant consolidating 11 overlapping branches into five full-service locations. These five full-service locations are near frequently visited locations like shopping centers, gas stations, and retail stores, strengthening our presence in each community.
If my branch closed, where do I bank now?
- Customers can continue banking at any of the 40+ Five Star Bank branches throughout Western, Central and the Southern Tier regions of New York State and at thousands of Allpoint surcharge-free ATM’s. You can go to our branch/ATM locator at https://www.five-starbank.com/resources/branch-and-atm-locations to find the closest location to you.
- Customers who have accounts at a branch that is being consolidated will be receiving a letter the week of 7/20/2020 that will advise them of where the closest Five Star Bank branch is located. Consolidated branches are in neighborhoods where another Five Star Bank is typically within a 15-minute drive or as close as 4,000 feet down the road.
The closest Five Star Bank is too far from me, how can I keep banking with Five Star?
For convenient routine banking wherever and whenever you need it, customers can use our Digital Banking app, 24-hour touchtone banking, and our surcharge-free ATMs located at neighborhood grocers, pharmacies and other retailers.
How have employees been affected?
To accommodate the consolidations and a new overall staffing approach, Five Star Bank reduced its workforce by approximately 6%. Where possible, those impacted were offered roles or the opportunity to apply for other positions in the company. Comprehensive severance packages have been offered to all separated employees based on tenure.
Will this consolidation of locations impact your presence in the community?
No. As a community bank, we are driven by people – our associates live and work in the communities we serve. That personal, human connection, remains the cornerstone of who we are, and have been, for generations. That’s why, despite banking evolving to become more digital, we remain committed to having a strong branch presence in our communities to provide in-person financial advice and solutions to customers for every life event and banking need.