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Martin K. Birmingham has worked for big banks before, but he likes what smaller community banks have to offer. Earlier this year, he was named president and chief executive officer of Financial Institutions Inc., the Warsaw-based parent of Five Star Bank. Birmingham’s selection was a departure: Each of the previous CEOs was a member of the bank’s founding family. John E. Benjamin, Financial Institutions’ board chairman, said Birmingham was chosen for his competence, compassion, competitiveness, and ability to communicate with employees, investors and customers. Birmingham, 46, recently talked about how Five Star, with about 50 offices in Western and Central New York, plans to grow Upstate:

Q: Five Star added eight offices – four from HSBC USA, four from First Niagara – to its network last summer. How has that transition gone?

A: Very well. People that were working in those legacy branches have embraced the opportunity to work with a local community bank, and the customers the same. We’re friendlier, we’re easier to deal with, we’ve got a competitive suite of products, so it’s ended up being a very good transition for us.

Q: Did you lose many customers in the switch?

A: No. There’s always going to be a natural transition of customers anyway, but the way we modeled it and our expectations, we kept a lot more than we thought.

Q: What is your impression of the upstate economy?

A: The upstate economy has never had the highs or the lows. It’s been a very stable place to do business, and I think our commercial enterprises have been very used to competing in an international market and with it being competitive. We find that the current state of our commercial borrowers is good and they are being as careful as always in terms of anticipated investment, capital investment, activities of that nature.

Q: Five Star has only three offices in Erie County. What do you see as your growth potential there?

A: In [Erie, Monroe and Chemung counties], they have been dominated by former large local legacy institutions that were rolled up into Bank of America, HSBC, First Niagara, etc. We are focused in on these markets and we believe we’ve got a lot of opportunity to grow in the way we drive our growth, the community bank model, delighting customers. … We find that customers appreciate the opportunity to work with real bankers who are locally based and locally focused.

Q: In Erie County, will you grow through acquisitions, or by opening more offices?

A: We have taken advantage of branch divestitures, which I think is going on in the industry at the very largest banks as they’re trying to prioritize their focus on what markets in the world or the countries they think are important. And as well, if there are other opportunities, we would look at them and consider them.

Q: You’ve worked for several banks in your career. What niche does Five Star fit into?

A: I worked for Fleet, which was acquired by Bank of America. I was always a local guy trying to deliver a large bank locally. It ended up being very hard and cumbersome: Coordinating credit approvals in other parts of the country or the world, big companies focused in on markets that they thought were bigger and better than upstate New York, Buffalo, Rochester, whatever it might be. It’s really good, I think, being a locally focused bank, and living and working with our customers and recreating with them and serving their banking needs is a huge difference.

Q: Five Star ranks high in local lending under the Small Business Administration’s 7(a) loan program. How is small-business activity looking?

A: It’s continued to look very good. Part of the community bank model is, we’re interested in and we care about commercial loans of all sizes. We’ve got a very strong SBA program where we’re focused in on taking advantage of the opportunities to work in that context. We like being a top-ranked region community bank behind M&T – they’re hard numbers to overcome. But from our perspective, every commercial loan opportunity is a loan that’s bona fide for us.

Q: You’ve been in the CEO job for just a few months. What direction do you want to take the bank?

A: We’re building on all the hard work over the last eight years to position the bank to take advantage of really the disruption that’s going on out in the marketplace today. Locally headquartered, locally focused – not too many banks can say that. And we happen to be able to say it in a way where we’re of the size and scale where we can really take advantage of it.

email: mglynn@buffnews.com