The first Pennsylvania move out of York County for PeoplesBank is a big one. Not in size, but at least in perception.
PeoplesBank, the lone subsidiary of Codorus Valley Bancorp Inc. of York, plans to open a loan production office in Camp Hill by Oct. 1 as a way to test the midstate waters outside its home base. It already has three loan production offices in Maryland.
The 2,600- square-foot office will be at 3100 Market St., the former JC Bar Properties Inc. office, and will join a glut of other banks at the busy West Shore commercial span between Route 581 and Market Street. It's also the first location for PeoplesBank north of York County.
“If you don't go into new venues, you can't raise new clients,” Codorus Valley Vice Chairman, President and CEO Larry J. Miller said. “We've been looking at expanding for some time, and this was the perfect opportunity to do it.”
Miller said the bank plans to apply to the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corp. for branch approval.
While it would seek approval by both entities as a full retail branch, Miller said, the new location will start only as a loan production office. If the location performs well, it could expand to a full-service retail branch.
“It will be fully based upon results,” Miller said. “We can't speculate what will happen, but we know what we believe will happen. We want to move forward.”
PeoplesBank will join about a dozen other banks and credit unions within 1 mile and six within less than a quarter-mile.
Orrstown Bank has a branch directly across Market Street, and Wells Fargo, Santander, PNC and Metro all have branches in the Camp Hill Shopping Center less than a quarter-mile away. Integrity Bank's busiest branch and its corporate offices are about a block away on Market Street.
The three busiest bank branches in Cumberland County by deposits are all within 1.2 miles.
Miller said he isn't intimidated by the nearby competition.
“We looked at a number of other locations, but thought (the Market Street location) was the best place to be,” Miller said. “We'll do what we do best, and based upon our research, we'll be fine.”
With the trend of reducing branches, however, creating another branch in an already busy — though affluent — neighborhood could be dangerous, said Robert E. Kafafian, whose financial institution consulting firm the Kafafian Group works with both the Pennsylvania Bankers Association and the Pennsylvania Association of Community Bankers for speaking engagements and instructional seminars.
He said this somewhat resembles the time when banks 10 to 15 years ago tried to converge on the burgeoning State College market, only to oversaturate the region. A client he did not want to identify asked recently if it's time to pull out of State College.
“Now it's so over-banked, everyone is looking for those pockets where there is still a need for banking,” Kafafian said. “People threw money at the State College market, and now they're wondering if it was a mistake. Everyone is chasing loans everywhere, but now they're looking for the good ones, and they're harder to come by.”
West Shore Chamber of Commerce President and CEO George Book said he didn't think the bank cluster would cause an oversaturation and pointed to the large volume of car dealerships on the Carlisle Pike in Silver Spring Township that are all successful.
Giving the consumer choice, convenience and trust, he said, are important in business, and the banks there already have offered that. If PeoplesBank can offer that, he said, it should be successful.
“With the number of banks already there, I don't see any of them not having cars in their parking lots when I drive by,” he said.
Miller cited the affluence of the immediate neighborhood as a reason for choosing that spot. According to the U.S. Census, the adjacent Hampden Township area is home to two of the three highest Census tracts in the midstate for median household income, according to 2012 figures. One Census tract is at $111,288; the other is at $106,705. The only area with a higher median household income is a section of Manheim Township in Lancaster County at $130,284.
Miller said the media and marketing campaign to introduce the bank to the Camp Hill area is nearly complete, and he expects it to be effective by the time the office opens.
“I can assure you, if you live in that area and haven't heard of us by now, you will soon,” he said.