Bluegrass bank battle
Business Courier of Cincinnati - by Steve Watkins Staff Reporter
If it seems like a new bank branch is popping up every day in Northern Kentucky, it's only because that's not far from the truth.
Banks that haven't been in this market before, such as Republic Bank & Trust Co., Central Bank & Trust and Integra Bank, are attacking the market with a vengeance. Some of the big regional banks with Greater Cincinnati operations, such as KeyBank and National City Bank, are aggressively adding branches in the Bluegrass State. Meanwhile, established local players such as Bank of Kentucky and Heritage Bank are defending their turf.
"It is more competitive, it doesn't just seem that way," said Don Bahr, executive vice president in charge of retail banking for Bank of Kentucky.
Banks opened a net of 12 new branches, or one a month, in Northern Kentucky in the 12 months through June 30, according to the Federal Deposit Insurance Corp. At the same time, deposits grew 6 percent to $4.7 million.
Certain pockets where Northern Kentucky's population has boomed are particularly hot for banks these days. Banks have popped up all over the area near the Kentucky 17 interchange with Interstate 275 in Fort Wright. Thirteen banks are located within about a one-mile stretch of U.S. 42 west of I-75 in Florence, Bahr said. Hebron is another boom area.
"In some areas, it's definitely overbanked," he added.
Bank of Kentucky, with 25 branches in the three-county area, is eyeing only small pockets for local growth.
"We feel we have that area pretty well covered," Bahr said.
The bank is looking instead to Louisville and Lexington for future growth.
Meanwhile, banks in those two cities are targeting Northern Kentucky.
Republic, based in Louisville, entered the local market in early 2006 when it set up a loan production office in Fort Wright. It converted that to a full-service branch in June and is about to open a branch in Covington.
"Northern Kentucky is one of the most prosperous areas in the state," said Steve Trager, Republic's CEO.
Republic shifted a Fort Thomas native, Steve Brunson, to run the local operation. It's working well so far. Republic's original goal was to reach $19.5 million in local assets in the first 12 months. It made it to $20 million in six months, said Brunson, who is Republic's chief operating officer.
It's not stopping there. Republic plans to open a third branch on U.S. 42 in Florence and a fourth branch near the AA Highway and U.S. 27 in Campbell County by the end of the year, Brunson said.
Republic is overcoming the matter of convenience by allowing checking account customers to use any bank's ATM up to 10 times a month.
"That's been a hit for us," Brunson said.
Central moved in from Lexington about a year ago, with veteran local banker Merwin Grayson Jr. at the helm. He quickly brought aboard several local commercial bankers to pick up business.
They aren't the only out-of-town banks looking to benefit from the local market's growth. Evansville, Ind.-based Integra Bank Corp., headed by former Bank One Cincinnati chief Mike Vea, opened a Florence branch in 2005 and is adding another in Union. Vea has plans for further local growth.
Regional banks such as Key and National City have made their mark, too. Key opened its first four Northern Kentucky branches a couple of years ago.
National City became an established player in Greater Cincinnati in July 2004 when it acquired Provident Financial Group Inc. That also gave it a position in Northern Kentucky, and it saw the opportunity to improve that.
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