Washington Financial takes former PNC site in Burgettstown
January 31, 2017
Pittsburgh Business Times
Washington Financial Bank, which hadn’t added a branch since 1999, is snapping the trend by opening two by midyear, growing its retail presence by 25 percent.
In addition to the Bridgeville office Washington Financial plans to open in the spring at 173 Millers Run Road, its first retail branch in Allegheny County, it has acquired a branch in Burgettstown from PNC Financial Services Group Inc.
“PNC pulled out of that site last fall and a group of customers asked us, ‘Would you consider taking over that branch?’” said Michael Chaido, Washington Financial COO. “We have a branch about five miles away, in Hickory. But we looked into it, ran the numbers, and it made sense.”
The branch had built in 1981 by Equibank, which was acquired by Integra Bank, in turn bought by National City Corp., and then bought by PNC in late 2008.
“PNC had renovated it about 18 months ago so the branch was pretty much turnkey,” Chaido said. “Our cost of entry was low and our customer base there is relatively strong. We think we can be competitive. I guess we’ll find out.”
Washington Financial will start out with four employees at the Burgettstown branch.
Washington Financial is the 15th largest bank in the Pittsburgh metro as ranked by deposit market share. It is a mutual, meaning it is owned by its customers and does not have shareholders. So at a time when many banks are pruning their branch networks, mutuals are likelier to buck the trend because they have no easy way to distribute extra capital, according to Robert Wagner, a banking industry analyst and managing partner of Shale Community BanFund.
“It’s not uncommon for a mutual to spend money to grow into a larger capital base,” Wagner said. “Washington Financial is a well-run institution with about $1 billion in assets and $126 million in equity so they have very healthy capital levels. It makes sense that they would employ some sort of branching strategy.”
Chaido said Washington Financial is open to further expansion in the future.
“We’re still pro-branch,” he said. “We’ll run the numbers and if we can’t be successful, we won’t go into the market It’s prudent for us to continue on that course. With us being a mutual, we aren’t going to be careless with our capital.”
Washington Financial has ruled out some areas.
“We’ve steered clear from the Mon Valley because there are so many players like Cfsbank who do it well and Greene County, with Community Bank and First Federal [Savings and Loan Association of Greene County], I can’t see going in there,” Chaido said.