NewAlliance Bancshares Inc. chairman and chief executive Peyton R. Patterson spent an entire morning last month serving complimentary cups of coffee to commuters in Fairfield County, Conn., as they boarded their trains.
That might not seem a productive use of a CEO’s time, but Ms. Patterson said such gestures play a crucial role in the New Haven company’s effort to raise its profile in its newest market.
Though its corporate roots stretch back to 1839, the $6.6 billion-asset NewAlliance never had branches in Fairfield County, Connecticut’s wealthiest and most populous jurisdiction, until January, when it bought Cornerstone Bancorp Inc. of Stamford for $48.7 million. NewAlliance now aims to position itself as a high-touch community bank in a market dominated by big, out-of-state financial institutions.
Ms. Patterson said serving coffee helped “humanize” NewAlliance to its newest customers, few of whom are familiar with the company.
“We’re trying to meet customers where they live,” she said. “Serving coffee on the way to work was a personal touch. … I see this as a continuing part of our branding.”
The company took a similar tack in the summer of 2002, when it was trying to reverse a three-year drop in deposit share in its hometown. At that time Ms. Patterson visited and whipped up a gourmet meal for a family who had won a promotion.
The strategy worked. Her company’s share of the New Haven deposit market started creeping up in 2003. The share jumped nearly a full percentage point in 2004, to 12.63%, and held steady in 2005.
NewAlliance introduced its brand in Fairfield on Feb. 16, when it changed the signs on Cornerstone’s six branches there.
As of June 30, Cornerstone had the No. 18 share of Fairfield’s $22.7 billion deposit market, with less than 1%. Ms. Patterson said she wants to move New Alliance into the top quartile of the county’s banks — but to do that, she will have to contend with some stiff competition.
The county without question is one of the country’s most attractive banking markets. It is home to more than 28,000 small businesses, and its median household income of $65,000 is among the highest in the nation, according to the Census Bureau.
Yet Fairfield already has about 350 bank branches — one for every 2,600 residents — and new companies are moving in at a rapid clip. TD Banknorth Inc. of Portland, Maine, Royal Bank of Scotland Group PLC’s Citizens Financial Group Inc., and Commerce Bancorp Inc. of Cherry Hill, N.J., entered the market last year.
“The drawback to entering a market like Fairfield County is the level of competition,” said James Ackor, an analyst at Royal Bank of Canada’s RBC Capital Markets. “It’s unlike what NewAlliance faces in Hartford or New Haven. Expanding there is going to be an expensive, long-term, and difficult process.”
Ms. Patterson said NewAlliance plans to bolster its operations in Fairfield County by building more branches and making acquisition, if possible. Until then, she said, it will rely on its marketing to make it “look larger than we are in terms of bricks and mortar.”
On that score, NewAlliance is doing more than serving coffee. It is also running ads featuring Ms. Patterson, who worked in Fairfield County before becoming NewAlliance’s CEO in 2002, touting the company’s business-banking prowess.
The CEO says she is convinced her visibility gives New Alliance a leg up as it battles out-of-state banking companies, which control about 60% of the Fairfield market.
“People know me as someone who is committed to this community, and the big banks can’t match that,” she said.
Mr. Ackor agreed that the strategy makes sense. “If you’re trying to position yourself as a community bank, service is the most important aspect of what you do,” he said. “It’s a way to express to customers that it is more than a slogan. It emanates from the top of the bank.”
