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Spokesman: Trend away from in-person banking is accelerating
(Editor’s Note: The writer has a conflict of interest. See editor’s note at the end of this story.)
The long-rumored closing of the Downtown branch of First Commonwealth Bank is apparently official.
The location at 225 Fifth Ave. is one of 29 offices that the Indiana County-based bank intends to close, Jonathan Longwill, vice president and communications specialist at First Commonwealth, told Tube City Almanac on Friday.
Official notification will be sent to government regulators in early to mid-September, and the McKeesport branch is expected to close for business on Dec. 31, he said.
The closure will leave only two banks with branches in Downtown McKeesport. PNC has an office at the corner of Lysle Boulevard and Huey Street, and Dollar Bank has an office in the former Midtown Plaza shops.
Huntington Bank closed its office at 1415 Fifth Ave., near UPMC McKeesport hospital, in 2019.
The closure is part of a long-term trend by customers away from in-person visits to bank branches, Longwill said. At First Commonwealth, transactions with tellers have declined 15 to 20 percent every year over the past four to five years, he said.
“We’ve watched transactions move progressively away from the branch and toward online and mobile,” Longwill said. “While much of that was accelerated by the circumstances surrounding COVID-19, these are trends we’ve been watching evolve for years.”
Other First Commonwealth offices slated to close are in Pittsburgh’s Lawrenceville, South Side and Squirrel Hill neighborhoods.
In all, Longwill said, 11 locations scheduled to close are in the Pittsburgh area, 10 are elsewhere in Pennsylvania, and eight are in the Ohio, including two locations inside of personal care homes.
Over the past few years, he said, use of First Commonwealth’s website, digital banking and “bank-by-phone” options has almost tripled, and the bank’s call center has seen similar increases.
“We also are making significant investments in the future of our digital technology with an upgrade to a new business and consumer online and mobile banking experience this year,” Longwill said.
Many banks closed their offices to the public in the wake of the COVID-19 pandemic and asked customers to use mail or online banking services instead. Some banks have since reopened their lobbies by appointment only, or to a limited number of customers at a time.
But in July, the Philadelphia Inquirer reported that many bank branches in Pennsylvania had seen such a drop off in customers that they were planning to close permanently.
According to a May report on the Quartz website, almost 12 percent of all bank branches in the United States have closed since 2010. Bank branches in low-income urban neighborhoods, the website reported, are among the most likely to close.
During an earnings call with First Commonwealth shareholders and analysts on July 28, T. Michael Price, president and chief executive officer, reported that the bank intended to close 20 percent of its retail locations by Dec. 31 “in response to the current operating environment and evolving customer preferences.”
The bank’s goals through the closures, which it is calling “Project THRIVE,” include growing its overall business, increasing its profitability and reducing its expenses.
The McKeesport branch was one of 12 offices acquired by First Commonwealth during its 2004 takeover of the parent company of Great American Federal.
According to court records, GAF, formerly a savings-and-loan, had operated a location in McKeesport since 1955, when it was known as First Federal of Homestead.
Although retail consumers may not be using in-person bank branches as often, Longwill said branch banking remains “integral” to “small businesses ... as a place to solve problems and discuss more intricate banking needs.”
With the closure of the McKeesport office, other nearby First Commonwealth locations to the city include branches in White Oak, Elizabeth Twp., Munhall, Homestead and West Mifflin.
Conflict of interest note: The editor of Tube City Almanac, Jason Togyer, has a conflict of interest. He been a customer of the McKeesport branch of Great American Federal and First Commonwealth since 1992.
Originally published August 07, 2020.