Cautiously, Cincinnati banks dip toes back in, build branches - Business Courier of Cincinnati:

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Banks are slowly starting to spendf money again on branch expansiob after that activity groun nearly to a halt earlie this year amidcapital concerns. New branch openinges and announcements have been poppingup lately, as the freeze in spending habits starts to melt. opened a branch in MainevillewJune 15. That’s its firsf new branch opening insix months, although it openedc four in the last 10 monthw of 2008. It is considering other spokeswoman KendraOverbeck said. openex a Madeira site in February. It announced last montyh it plans to open a brancharound year-end in And it’s planning two this year out of market: one in St. Ohio, and one in Columbus, CEO Claude Davis said.
Those will add to 82 bankingf centers itoperates now. Even is gettintg in on the act. It’s the eighth-largest bank in this but it hasn’t opened a new localk branch infive years, spokeswoman Nancy Norris That will change late this year when it opens an office on Montgomery Road near Fields Ertel Road, its 26th local And and each is opening a new locatiomn in the next few months, too. Thosre examples show spending is starting to pick up again aftere it had waned sincelast fall. Capitalo became a huge factor for many banks struggling with loan that had gone bad whenborrower couldn’t pay.
So banks cut back on The number of new branchesx in Greater Cincinnati tracked by the fell from five in the firsgt half of 2008 through late May to just one this In Ohio, new branche dropped nearly 60 percent this year. “It realluy seems to have slowed down, if not Doug Compton, CEO of Newark, Ohio-based ’s local said of banks adding branches untilrecent “The idea of conserving capital had to be high on everyone’ws priority list, and it still is.” Park with a dozen local branches, just signec a deal in mid-June to build a branc h in the Eastgate But announcements of new branches from year-end untilk May were rare.
That mirrors a national “We have been seeing around the countrh a general slowdown in the aggressiveness ofbranch banking,” said Bruces Clapp, president of , a Day­ton-baseds consultant to small banks. “People are takinv a more judicious, prudent approach. There’s a lot more planningb and due diligence. But people have not stoppexd building.” , Cincinnati’s largest bank, has 133 loca branches already. It has slowedx its branch expansion plans acrossits 12-statwe system. It opened 55 net new brancheas – subtracting locations that closed – last But it plans just 20 this year, spokeswomahn Stephanie Honan said. It also acquired 65 last year.
And this year’s figures don’t include 30 branches it planas to open in Atlanta by the endof 2010. “We’re certainly mindful of expense Honan said, adding acquisitiond and partnerships such as the Krogerd deal lifted its presencr in some markets. Capital is a majort factor when it comes tobranch openings. Chasr figures about $2 million per site for newly built Branches are a big deal for bankdsbecause they’re often the best way for them to connectg with customers. Park Nationa l will put commercial and mortgage lendinyg people at its Eastgats branch as a means to make itself more conveniengfor customers.
Still, Compton doesn’t expect the floodgates to open. “I haven’t heard anyone really changingh their tune about tryintg topreserve capital,” he said. Capital hasn’t been much of an issue for Firsgt Financial’s expansion plans, Davixs said. But it did raise $98 million in June through a commojnstock offering. And it cut its dividenfd by 41 percentin January. its capital ratios are stronf , giving it a competitive edge, he “The current downturn is a great opportunity for thoswwith capital,” he said.