Waterbury-based Webster Bank now operates five branches in New York’s Westchester County, including this one in the town of Mamaroneck.

In Connecticut, Waterbury-based Webster Bank is one of the big dogs. But across the border in New York’s Westchester County, where the bank has been opening de novo branches for the past year, bank executives hope customers will see it as friendly and agile when compared to the national banking titans entrenched in the area.

Webster had its formal grand opening for its fifth Westchester County branch last week. Bank executives and the mayor of Yonkers cut the ribbon at the branch there on Jan. 12. The branch joins others in Scarsdale, White Plains, Rye and Mamaroneck. The bank opened the first branch, in Scarsdale, about a year ago.

So far, the venture has been successful, according to Mike Fitzsimmons, a Webster senior vice president and the bank’s southern region market manager.

“It’s going great,” he said. “We’ve been well received.”

Fitzsimmons wouldn’t release numbers, but said that growth rates are above what the bank originally projected.

Webster executives decided to expand into Westchester County several years ago. They decided in 2002 that the bank should grow through both acquisitions – the bank has made several since then – and through de novo branching. Webster subsequently has opened 14 de novo branches, most in lower Fairfield County, before moving over the border.

“It makes sense for continuity,” Fitzsimmons said.

And Webster isn’t the only Connecticut bank reaching into New York state. Bridgeport-based People’s Bank has plans to open some branches in both Westchester County and in southern Massachusetts, spokesman Brent Digiorgio said last month. The bank sold its credit card business to The Royal Bank of Scotland Group – parent company of Providence, R.I.-based Citizens Bank – in 2004, setting People’s up to expand.

People’s likely will decide where and when to expand sometime in 2005.

“We’re still evaluating the landscape,” Digiorgio said in December.

‘Terribly Competitive’

Westchester County, although similar in demographics to Fairfield County, poses its own set of challenges, according to John Carusone, president of the Bank Analysis Center in Hartford, but both People’s and Webster have good reason to open branches there. As the two biggest banks in the state, he noted, they have hundreds of branches between them and need to find new territory for expansion.

Westchester makes sense because it is contiguous to and similar to Fairfield County, where both banks have a lot of experience. Both counties have similar economic characteristics, and Westchester has low barriers to entry, but with an uncertain payoff. It is a “terribly competitive” market, Carusone said.

“Some of the largest and best-known institutions in the banking world are entrenched there,” he said.

Banks such as Citibank, Washington Mutual and New Jersey-based Commerce Bank all have a strong presence there. As a bank trying to make inroads into Westchester County, Webster has to differentiate itself, which is a daunting task, but worth the risk, according to Carusone.

Fairfield County is also a competitive banking market, but is more dominated by Connecticut-based banks, Fitzsimmons said. Webster and People’s, along with some national banks like Wachovia Bank and smaller community banks, make up much of the market.

But Webster is up to the task, and Fitzsimmons thinks the bank’s smaller size has helped it in Westchester County.

“I think it’s an advantage,” he said. “We can be a little more nimble.”

Webster is less “cookie-cutter” than the big banks, but is large enough to offer the same types of products, he noted. The bank is very selective about the people who work there, so customer service is a big focus, Fitzsimmons said.

“Our real hook is our people,” he said.

Webster has a good chance of succeeding in Westchester County, despite the stiff competition, Carusone said.

“If any [Connecticut] institution can make it happen, I think it is Webster,” he said.

The bank has the size and scale and is multidimensional in terms of the products and services it offers, he said. Webster also has “depth on the bench” with its experienced management, he said.

“They have a track record in terms of dealing with small and medium-sized business clients,” Carusone said.

The bank also has a big investment in retail branches in Fairfield County.

“So it’s a small jump across the border,” Carusone said.

Webster has been working on getting more name recognition in Westchester, Fitzsimmons said.

“In Connecticut, everyone knows the Webster name,” he said. But in New York, he added, “It’s a combination of good advertising and getting active in different community activities.”

Now, the bank is targeting the neighborhoods of the branches, but as it gets a critical mass of branches, it will be able to expand the advertising. Webster is planning to open six to eight de novo branches in Westchester County over the next two or three years. The bank has signed leases for a second Yonkers branch and another in Yorktown Heights. Other likely sites for de novo branches in Westchester County are White Plains, Eastchester and yet another branch in Yonkers.

The current Yonkers branch totals 3,800 square feet and has a drive-up teller window and an ATM. There are seven employees, including three tellers, a financial services supervisor, a financial services representative, an operations supervisor and the branch manager.