Businesses make proactive moves to keep the town of Diana banking

“The biggest thing both of them said is that they’re looking for a commitment from the community to possibly shift accounts over to help keep them here,” Mr. Smith said. “They just don’t want the same situation they had in Croghan.”

After Key Bank closed its Croghan branch in 2019, both banks moved into the village, creating stiff — and tense — competition, resulting in each getting a reduced share of the potential $30 million in business left behind by Key.

In the Diana area, there is about $15 million in accounts with Community but it is not realistic, according to the chief executives of both banks — Dale A. Klock at Carthage and Daniel W. St. Hilaire at Northern — to expect everyone to switch over their accounts.

The men estimate that about $3 million to $4 million worth of accounts will not move from Community so there will be about $7 million to $8 million in retail deposits with little or no growth potential for the next bank.

Both banks already have some customers in the area. Northern has more savings and checking accounts while Carthage holds more loans, according to information provided to the town supervisor.

To help the banks get a gauge of the intentions and preferences of residents and businesses currently using Community Bank, Mr. Smith created a survey on the town’s website to which there were 223 replies by Thursday — about 14% of the 1,610 residents. Plans to make paper copies available at businesses and the school are in the works.

Meeting attendees agreed to switch all of their current Community Bank accounts to whichever bank is willing to come to the area excepting loans that would be negatively impacted by moving due to interest rates.

Because the banks generally offer the same services, the ensuing discussion about which institution would best fit the Diana community came down to the banks’ main differences.

Proponents of Northern cited the enhanced technology offered with their ITM — interactive teller machines — that allow users to make payments or deposits with cash or checks and the opportunity to speak directly to a customer service representative via a video call.

“Northern (Credit Union) seems much more modern. You can do all your banking with their ATM. I know they can’t hold municipal accounts or school accounts but for the community and businesses, I think Northern is probably our best option,” said Herbert Frost III, candidate for the county legislature, member of the county Industrial Development Agency board and owner of Arbor Care Tree Service.

Carthage’s edge is that, unlike Northern, it is legally allowed to hold municipal accounts, which will provide the institution a guaranteed $4 million in Diana from the towns of Pitcairn and Diana and the Harrisville Central School District. Federal law prohibits credit unions from municipal banking.

“I don’t want to sit up here and sound selfish from a town standpoint but it would be nice if they could service all of us,” Mr. Smith said.

School Superintendent Robert N. Finster agreed and said the district has many accounts and some require frequent, in some cases daily, cash deposits.

The concern is that if the town loses all bank service, the businesses and municipalities would have safety issues because they would have more cash on hand and higher expenses from the need to travel about 20 miles in any direction to the nearest banks in Star Lake, Gouvernuer, Croghan or Carthage to make a deposit throughout the week.

An amicable agreement made during a discussion on Friday between Mr. Klock and Mr. St. Hilaire, however, will prevent town leaders and residents from a difficult decision.

The executives agreed that because Carthage can serve the whole community, if that board supports moving into Diana, Mr. St. Hilaire and Northern will “stand down.”

“If (Carthage) decide(s) they do not want to go into Harrisville, then he (Mr. Klock) will stand down,” Mr. St. Hilaire said. “Both of us are looking at this from the lens of the residents and the community in general and we just know that their ideal solution would be to have a financial institution that can support the residents, the businesses and the municipalities and we can’t do that.”

The men said the conversation changed the way they will engage each other going forward.

“We agreed that in the future we will talk before we do these sorts of things; that it’s much easier if we work together than against each other,” Mr. Klock said.

Mr. Klock will be bringing the Diana branch idea to the Carthage Savings board on Monday evening after meeting with representatives from the towns and the school earlier in the day.