After several years of branch expansion, especially in Erie County, the parent of Lake Shore Savings Bank plans to concentrate more of its growth efforts on developing “clicks,” and not “bricks.”
Dunkirk-based Lake Shore Bancorp, which operates 10 branches in Western New York, said it is still “committed to expanding our retail branch footprint whenever it makes strategic sense,” according to its quarterly regulatory filing with the Securities and Exchange Commission.
But it will focus more of its short-term attention – and capital investments – on improving technology and getting more customers to use it, rather than on costly new facilities that often require a couple of years of growth before they pay for themselves.
Instead, Lake Shore said it has developed a five-year strategic plan to implement “cost-effective and efficient digital services” to meet current customers’ technology needs, bring in new customers and improve how efficiently it operates.
“We are committed to making investments in technology, and we believe that it represents an efficient way to deploy a portion of our capital,” the bank wrote in the SEC filing, adding that it’s important to continue evaluating the technology it uses for customer service.
Bank officials did not respond to a request to comment further.
Founded in 1891, Lake Shore grew slowly but steadily for its first 100 years, but has quadrupled in asset size to nearly $500 million in the past 20 years. It was a traditional thrift institution for most of its history, stressing savings deposits and mortgages in its home turf in Chautauqua County, where it’s a major mortgage lender. But it turned north to Erie County in 2003 after it largely saturated its core markets.
That expansion became a key part of its future profits and growth, and its five-year strategic plan – adopted in 2009 – called for more branches, increased commercial lending, improved risk management, back-office consolidation and revamped mortgage lending. Specifically, it targeted $75 million in commercial loans and a new branch every 12 to 18 months.
It now has five branches in each county, including its newest branch in Depew, which opened in April 2010 and had accumulated $26.7 million in deposits as of Sept. 30. But it now also has check image processing, online banking and online bill-pay services, as well as other features specific to business customers such as remote deposit of checks electronically through the Internet, payroll processing and merchant card services.