Once or twice every weekday for the last 12 years, Ray Petty, the owner of Ray's Supermarket in Factoryville, Pa., would send an employee down the street to the Community Bank and Trust branch to pick up rolls of change or deposit the day's receipts.
He will not be able to do that anymore. Community, of Clarks Summit, Pa., closed the Factoryville branch Friday, leaving the town of 1,160 without a bank branch for the first time in nearly a century.
Mr. Petty's employees now will have to drive 20 minutes to a Community Bank and Trust branch in Nicholson.
"Community Bank thinks people can just go to another branch and everything will be fine," he said. "But that's just not very convenient, especially for senior citizens and us business owners."
Factoryville residents and business owners are trying to get another community bank to open a branch in the town. At least 350 townspeople have joined a grassroots Let's Save Our Bank drive and signed petitions vowing to move their Community Bank accounts to whatever bank sets up shop in Factoryville.
Tom Davis, a borough councilman and the leader of Let's Save Our Bank, said he formed the group in January when residents first learned of the plan to sell the Factoryville branch property. A spokesman for the $527 million-asset Community Bank and Trust would not identify the buyer except to say it was not a financial institution.
Mr. Davis said, "We approached Community Bank and asked them not to sell, but when they said they are leaving no matter what, we tried to get a group together to buy the branch, but they would not have that either."
Then his group approached other area banks about starting a branch. Mr. Davis said last week that the group was in negotiations concerning a property and that it was in discussions with another bank that he said he could not name.
Community Bank and Trust spokesman Scott Seasock said that the Factoryville branch was closed for economic reasons.
It had $11.7 million of deposits, making it one of the smallest of the bank's 17 branches, Mr. Seasock said. Management felt that the town would be "adequately served" by branches in neighboring towns, he said.
Mr. Seasock noted that the Community Bank and Trust automated teller machine at the former branch will keep operating, as will an ATM on the Keystone College campus in town.
Community Bank and Trust's decision points up the profitability challenges that banks face in rural towns.
The Federal Deposit Insurance Corp. said that with populations steadily declining in these communities, more and more banks are expected to pull up stakes or merge with other rural banks over the next 20 years. Though most bank consolidation has occurred in more urban markets, the FDIC said it soon expects a faster merger pace in rural areas than in other markets.
Factoryville is precisely the type of community the FDIC was referring to in a study it published 12 months ago on this subject. Between 1990 and 2000, the town's population fell by 12.7%.
In 2000, residents of another northeastern Pennsylvania town, Wyalusing, started a Save Our Bank committee after learning that the $120 million-asset Peoples State Bank of Wyalusing had agreed to sell itself to the $1 billion-asset Citizens and Northern Corp. of Wellsboro, Pa.
Though the buyer never said it planned to close branches, the residents thought that Wyalusing would lose its prestige if its only local bank were sold. They succeeded in blocking the sale, and since then the bank's assets have grown nearly 40%.
Mr. Davis said that even though Factoryville is small, it still needs a bank.
"A bank has an influence in town … and helps people get into business," he said. "And community banks especially affect growth in a community, and when you don't have a bank you don't have growth."
Mr. Petty worries that residents will use his store as a de facto bank branch, since it cashes checks for customers. "Without a bank, guess who becomes the bank now?" he said. "And we just don't have the means to do that."
