Somerset Trust's Westmoreland construction bucks industry trend (2024)

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

It has the traditional tellers, loan officers, conference rooms and vault. But the two-story building fronting East Pittsburgh Street also has a coffee bar where customers can relax, and an open rooftop area that would seem suitable for live entertainment.

“It’s a different kind of branch. We’re creating space where people can work together … and create and try new things,” said Allison 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 brick-and-mortar footprint, as more customers rely on digital banking in the post-covid era.

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

Somerset Trust’s branch network is spread across Southwestern Pennsylvania, northern Maryland and northern Virginia. The plan is to build offices to suit customer needs, Hoffman said.

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

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

National picture

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

Banks cut branches in 2020, 2021 and the early part of a covid-impacted 2022. There was a net loss of 2,927 bank branches in 2021, a record for closings in a year, according to S&P. And 2021 followed a record year in 2020 for bank branch closings.

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

There is a greater demand for electronic services in which customers can perform their basic banking services, such as making a deposit, electronically, Reider 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 is competing 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 always are competing against the other banks in other markets. We do well in areas where people like a convenient style of banking,” Hoffman said.

Closer to home

While Somerset is growing its branch footprint, Pittsburgh-based PNC Financial has reduced its vast branch network. It announced plans in April to close 30 branches in seven states. That was followed by a recent announcement that it would close 19 branches in February 2024, including one in New Castle.

PNC decides to close bank branches as customer needs evolve and it sees transaction patterns decline, a company spokesperson said. When that has happened in the Pittsburgh market, the spokesperson said that PNC transitioned clients to new branches that are, on average, seven minutes or three miles away from the closed branch.

It previously closed its PNC branch in downtown Greensburg, opting to serve the market with two branches on Route 30 in Hempfield — one east of the city and the other west of it. But, to put those branch closings at in perspective, the national bank still has about 2,300 branches across the country.

With the willingness of customers to drive longer distances to conduct their banking, Reider said that banks can look at the customer traffic figures to determine whether they can close a branch without losing the business that 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 spokesperson said.

“In Pittsburgh, we’ve opened four new branches since 2020 and renovated many more across the region,” said spokesperson Olivia Lammel.

PNC said it continually studies customer and prospect transaction patterns to determine how it can most effectively meet the needs of the communities it serves, Lammel said.

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

“All of the easy decisions (on closing branches) have been made,” Reider said.

Joe Napsha is a TribLive reporter covering Irwin, North Huntingdon and the Norwin School District. He also writes about business issues. He grew up on Neville Island and has worked at the Trib since the early 1980s. He can be reached at jnapsha@triblive.com.

Somerset Trust's Westmoreland construction bucks industry trend (2024)

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