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Is Lehigh Valley the next Lancaster County?

We’ve seen Lancaster County and the midstate as a whole become a battleground for banks looking to make an imprint in a new market.

But it could be too late for any banks that have waited to pull the trigger in Lancaster County, as faster-acting banks already have lending teams in place beating the county’s bushes to drum up new business or steal existing business. It may even be over-saturated at this point, so now banks with an eye on expansion have to look around and wonder where the next Lancaster County will be.

And they may have their answer: The Lehigh Valley.

While banks were focusing on the midstate after high-profile buys of Susquehanna, Metro and National Penn banks uprooted the local banking scene, the Lehigh Valley experienced market disruption on a smaller scale.

It was a stronghold for National Penn, which moved its corporate headquarters from Doylestown to Allentown in 2014. National Penn’s 17.7 percent share of the deposit market in Lehigh and Northampton counties was second only to Wells Fargo Bank’s 22.2 percent market share, according to the Federal Deposit Insurance Corp. for the period from July 1, 2014, to June 30, 2015.

Susquehanna also had a presence in the Lehigh Valley before it sold to BB&T. The most recent disruption, KeyBank buying First Niagara of New York, will result in closure for one of the Lehigh Valley’s seven First Niagara branches and the other six becoming KeyBank branches.

It’s not the kind of disruption the midstate experienced, with four banks based in Central Pennsylvania bought by outside-the-market banks in a matter of about a year, a total that doesn’t include National Penn. But the Lehigh Valley’s market disruption still is substantial. And if we’ve learned anything from what we’ve seen, it’s that bankers will go to great lengths to chase customers.

It’s already happening in the Lehigh Valley.

Scranton-based Peoples Security Bank and Trust Co. moved in to the Bethlehem area in 2015, and now is adding a second location in the Bethlehem area, according to CPBJ sister publication, Lehigh Valley Business Journal.

“This is the bank’s biggest strategic investment in many years,” Neal Koplin, Lehigh Valley region president and executive vice president of Peoples Security Bank and Trust, told LVB. “We are looking to continue to expand in the Lehigh Valley. We will be looking for additional locations that make sense and that fit well with our footprint.”

So who’s next? Will there be any Central Pennsylvania banks that take a giant leap into the Lehigh Valley? Orrstown Bank of Shippensburg moved right from Lancaster into Berks. If it wanted to move any farther east the Lehigh Valley would be an obvious landing spot.

Lancaster-based Fulton Financial Corp. counts Lehigh Valley stalwart Lafayette Ambassador Bank as one of its six subsidiaries. It didn’t expand with any branches in the midstate, but did make changes to its Small Business Administration lending. That could be telling of what kind of plans Fulton would have in similar markets.

Souderton-based Univest Bank, one of the banks moving into Lancaster County, doesn’t have a full-service branch in the Allentown area, but does have an office there for municipal pension services. The Univest team made no bones about getting into Lancaster specifically because of the market disruption, which might make the Lehigh Valley attractive.

Centric Bank of Lower Paxton Township jumped over a lot of ground to expand with a loan production office in Bucks County in 2015, and was one of the banks that jumped into Lancaster County. Maybe it would be interested in the Lehigh Valley?

Peoples Security is the first to look to take advantage of the Lehigh Valley’s market disruption. Who’s going to be next? Will it be anyone from Central Pennsylvania? Take to the survey and light it up in the comments:

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Michael Sadowski

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