Though Congress may seem perennially locked into bitter partisan bickering and forecasts aren’t all clear skies and sunshine for the rest of the country, Bay State bankers are relatively optimistic for 2013.
According to Banker & Tradesman’s annual reader survey, conducted in partnership with the Sudbury-based research firm Bannon & Co., bankers have higher expectations for the Massachusetts state economy than for the national economy.
Almost half of bankers responding – 48 percent – said they expected a moderate improvement in the state’s economy, while 35 percent expected it to remain around 2011 levels and 17 percent expected a moderate decline.
Prognostications for the national economy were mixed, with 36 percent expecting a moderate improvement, 30 percent expecting it to remain at 2011 levels, and 26 percent expecting a moderate decline.
“The industry here has done pretty well and weathered the crisis fairly well,” Jon Skarin, senior vice president at the Massachusetts Bankers Association, told Banker & Tradesman.
Furthermore, the Greater Boston area’s market health received the most positive reviews, with approximately 83 percent stating the market was at least “somewhat healthy” and 13 percent responding that it was “neither healthy nor sick.”
“It’s the strongest economy in the country, without question,” said Bob Mahoney, president and CEO at Belmont Savings Bank. “Metro West and Boston, particularly – Middlesex, Norfolk, and Suffolk counties – that’s the heart of the strength. But southern New Hampshire is doing fine, and Essex County is doing fine.”
And while 70 percent of bankers who responded to the survey rated the Western Massachusetts market health as “somewhat sick,” Sean Gray, executive vice president of retail banking at Berkshire Bank, countered, “We see the Western Massachusetts market as being stable.”
Goin’ Mobile
2013 may be the year of the mobile banking app. Fully 50 percent of bankers responded that it was “very likely” marketing strategies in the coming year would focus on mobile banking, and those banks that don’t already have a mobile banking app are probably thinking about rolling one out in the next year.
“I think you’ll see more banks, particularly community banks, looking to these areas to provide some additional service to their customers,” Skarin remarked.
“We will focus on what we call our online bundle,” Hal Horvat, chief operating officer of Mansfield Bank, told Banker & Tradesman. “We’ll be introducing mobile banking, online banking, e-statements, and bill-pay. That will be a real focus for us during 2013.”
Joseph Parisi, vice president of marketing at Mansfield Bank, said he expected his marketing budget to remain level in 2013. Marketing would still retain its traditional focus on commercial and residential lending, he said, but new efforts will aim at bolstering online banking enrollment and the mobile banking product Mansfield Bank is planning to launch in the spring.
Mahoney also said his bank’s marketing budget would remain level in the coming year. With mobile and online banking pretty much locked down at Belmont Savings, he said marketing efforts for the first half of 2013 would focus mainly on the bank’s new money market account and a new home equity product.
Rising Home Sales?
If bankers’ forecasts are correct, expect to see at least a slight uptick in the demand for single-family homes, too. Nearly 57 percent replied that single-family homes were “somewhat likely” to become more popular in 2013. Twenty-five percent replied it was “very likely” their marketing strategies would focus on mortgages, and 46 percent said that was “somewhat likely.”
“Interest rates are low, but they won’t stay low forever. Housing prices have not gone up very much, but they’re going to. So if people are considering home ownership, 2013 might be their last best bite at the apple because rates are going to be low and prices are still going to be kind of soft,” Mahoney said.
And concerning the subject of mergers and acquisitions, 47 percent of respondents said they expected to see three to five mergers or acquisitions in the Bay State this year, and 37 percent expect to see even more, around five to seven.
“Historically, we’ve always had mergers. Twenty years ago, we had probably twice as many banks as we do now,” Skarin commented. “I think we’ll continue to see consolidation in the industry, but will it be greater or less than previous years? We’ll have to wait and see.”
And, while it’s essentially tabled for now, the application of Basel III capital requirements is still a concern for Massachusetts bankers. Twenty-one percent replied that they were “very concerned,” 41 percent said they were “somewhat concerned,” and 38 percent said they were “not very concerned.”
Email: lalix@thewarrengroup.com
For the complete results of the 2012 B&T reader survey, click here.
