S4,E15 - Dave Kavney

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This is Talk CNY, a semi-monthly podcast by CenterState CEO, recording in the production studio at CenterState's INSPYRE Innovation Hub. CenterState CEO is Central New York's premier leadership and economic development organization. Join us as we meet the people and explore the projects driving the regional economy forward.

This is Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, Director of Communications at CenterState CEO and your host for Talk CNY. On this episode, we welcome a very special guest, Dave Kavney, NBT Bank's President of Central New York, the Southern Tier, and Pennsylvania. NBT Bank is our presenting sponsor for this podcast, and we are so grateful to them and all of their support. On this episode, we discuss NBT Bank's recent growth and how they're playing an active role in our community's development.

Dave, thanks so much for being here. Always great to have you on.

Thank you, Katie. A pleasure to be here again.

So last year when you joined the podcast, NBT Bank had recently just went through a merger, expanding into Western New York. So it's been about a year now since that. Can you tell us a little bit about how it's been going, what it's like expanding into that market?

Katie, it's been great. When we look to merge with partners, banking partners, we look at culture and geographical fit. So the culture has been fantastic. The folks that have joined as our teammates at NBT, it's been a very high-level experience, I think from both standpoints. Geographically, our farthest point west in Upstate New York was Camillus. So being able to enter the Rochester and Buffalo markets with very meaningful branch systems has been fantastic. Two very large cities. We weren't there from a retail and commercial banking standpoint, so it's worked out really well for us.

What have you learned? I mean, like you said, two large cities, two new cities in the last year. I mean, what's been some of the greatest lessons that you've had through this process?

I would tell you that there's a lot going on in the western part of the state. We think about our individual cities, Central New York, Syracuse area, Mohawk Valley, Binghamton. But when you start to think about the larger ecosystem, the economic system across the state, there's a lot involved there. There's a lot of companies here in Central New York that actually have locations out in Western New York and Eastern New York and vice versa. So it's been great to work with our customers as they've moved some of their business out to the western part of the state. We're right there well positioned. So it's fantastic.

I mean, you are one of our partners, one of the business members that are strategically moving across the Thruway corridor. I mean, that strategic growth is something that CenterState has definitely paid attention to and is trying to strategically move around. What has it been like as you've helped other companies who are also growing out that way and seeing the connections across the Thruway?

No, it's great. And I would tell you, I think I started paying attention to this as part of the technology evolution across the throughway corridor. We saw it out in Albany and now Central New York, Mohawk Valley, and you think about Batavia with Edwards vacuum. There's certainly a connective corridor right there. So it keeps us all very well positioned to think a little bit larger scale than maybe we have in the past. And I would even argue that the Route 81 corridor up north and Binghamton and down in Scranton, same situation. There's a lot of business that has played back and forth in various cities.

So growth is definitely a big theme here. How else has your landscape changed in the last year? What are some of the opportunities you're looking at now that maybe you weren't looking at last year?

I would tell you that we're pretty stable as far as how we operate as a bank. We're very heavy into commercial and industrial banking, a lot of retail banking, wealth and insurance, private banking now is a new offering. I think I've seen an increase in real estate. We've always been a large real estate lender, commercial real estate, residential real estate, but I've started to see an increase in the need for that. We've talked a lot about that at various CenterState functions, but we're actually seeing that across both Central New York and some of the other cities we operate in. So we're trying to be a major player in that arena. And we have been for years.

I mean, you definitely are, and you've been a huge partner in CenterState CEO's strategic housing work, including the Central New York Housing Fund. So why was it important for you, NBT Bank and a lot of the other financial institutions across the Central New York region to get involved in the housing fund and really put dedicated funding into creating the housing that we need right now?

We've talked about it since the Micron announcement that there's a need for housing. There was before the announcement, and there certainly is after. Haven't quite seen from my standpoint, the increase in housing. So to have CenterState coordinate that fund and bring all the community banks together and some other banks, some larger banks are involved obviously, and Micron and others. But to have everyone work collaboratively for that common goal, really important. It's a layer of capital a lot of the developers need to really scale up some of the projects they're looking at. So it's going to be very important as we move forward.

You've been in the banking industry for a long time. Have you ever done something at this level of collaboration before?

A long time, meaning 37 years. Is that what you're getting at, Katie? No. We have had collaborative. We partner up with banks quite a bit, but not to this level. This is something that has been really neat to be part of. I think as we look forward and to be able to put a fund together that's going to be collectively beneficial for the entire community, regardless of what bank's name is on the front of the branch, I think it's really important for us as we roll forward.

Now lending individually to folks, whether it be commercial or individual homeowners, what are you seeing that market look like right now? How are your clients kind of coming in and saying, "I need this loan for this piece of real estate."

We're seeing a large increase in demand for both real estate as well as other commercial purposes, acquisitions, machinery, equipment, a lot of different avenues. But on the real estate side, I would say starting this year, I think it kind of coincided with the groundbreaking up north actually. I think there's been kind of this wait and see attitude of let's make sure we're skeptical Central New Yorkers, let's make sure everything's rolling. But once that happened, we've started to get a lot more inquiries as to our appetite for financing. That's one of the things we do very well. So we're well positioned for that.

Now, what are some of the other ways that NBT Bank is involved in helping to create more housing in the community? I know that the Central New York Housing Fund is not your only initiative and project to help increase housing supply.

Now we have separate commercial real estate lenders in all of our markets in which we operate. So we have two or three here in Central New York. We've been doing it right along, but we focus on residential real estate, market rate, multifamily, affordable housing, workforce housing. We run the whole gamut as far as financing for those opportunities, and we'll continue to do so going forward for sure.

Now, not just in real estate, but I'm sure that you're facing some bottlenecks, some challenges along the way. How are you finding solutions to these challenges? And what have been some of the creative ways that you've kind of been able to reach answers?

Yeah, I would say maybe not on the bottleneck side, but on the challenges. One thing that continues to plague our customers and therefore us as their financial partner is fraud. We are seeing, and I think I've talked about it in the past with you. It's unfortunate, but the fraudsters are out there and we are working very hard as an industry and as a bank, NBT has a lot of protection as far as services and products to offer our clients. So we're holding hands trying to work very closely with our customers because it can really impact a business. If you get hit with fraud, it can shut you down. It could be a large financial loss, could be reputational. There's a lot of things that can happen. So that's one of the things that I guess it's unfortunate, but fortunately for us, we're well positioned to do that. And we've got a great team in place to work with our customers and try to get that solved before it happens.

Now, what are you hearing from clients that they need? Obviously fraud protection, but are there other things that the community is coming to you saying, "We would like more of this. We would love this service." Is there something that you're kind of eyeing not only in geographic growth, but in service growth?

I would say 18 months or so ago, we initiated the NBT Private Bank offering. We had a lot of business owners that were looking for an escalated retail experience. So we started that about 18 months ago and that's gone exceedingly well. We've got a team right here in Central New York in our headquarters here in Syracuse that covers a larger Central New York region. And that's something that our customers had asked us for. And we set that up, we scaled it up, and we're having a lot of success with that right now.

Can you tell me more about that? What is an escalated retail experience, private banking? What is the benefit of that? Who's looking for that?

Yeah. So in this case, maybe just as an example, a business owner that's looking for one point of contact for their daily banking needs, they're opening new accounts, maybe some family needs, some borrowing needs, some wealth management. So we can marry that all together and have one or two points of contact that are ready to go. They don't have a wide expanse list of customers, so they can really focus on taking care of their customers. So it's an elevated, I call it a retail experience, but it's more holistic than that. It's their entire banking profile.

That's great.

Yeah.

I mean, we've mentioned a few times the growth that NBT Bank is seeing. What are just some of your reactions as a leader of the Central New York, the Southern Tier and the Pennsylvania region to seeing this growth across the region?

It's awesome. I mean, I've lived here, and as you pointed out, I've been doing this a long time, but we're starting to see, and we have been seeing it, but when you start to think about looking at the Route 81 project and it's really coming to fruition and you see the groundbreaking, you hear about a turning stone expansion, Chobani expanding over in the Rome area. I was in Binghamton last week, and there's an awful lot of projects going on there. So I think it's a very exciting time. There's a lot of optimism out there, and we're feeling that. We're actually seeing it from a customer standpoint.

Well, Dave, we will have more to talk about in just a moment, but first we are going to take a quick break with a word from our presenting sponsor, NBT Bank.

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Welcome back to Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, Director of Communications at CenterState CEO and your host for Talk CNY. On this episode, we are joined by NBT Bank's Dave Kavney. Dave, thank you for being here.

Thanks, Katie. Great to be here.

We've talked a lot about NBT Bank's growth, some of your strategic priorities, but you are a close partner to CenterState CEO. You're involved in a lot of our work. You help inform a lot of our work as a board member and as a long-time member. What do you get out of being a CenterState CEO member? Why is it important to you to be involved in this network?

I think we're seeing the strength of being involved with CenterState and the existence of this organization now more than ever. If you think about, we just talked about the housing fund, that was really orchestrated by a lot of discussions at the CenterState level, in my opinion. So I think being part of this group where you can have consistent collaboration among competitors, business associates, business partners, and also ongoing communication. There's a lot going on across the state. There's a lot going on in Central New York, and to have that consistency of messaging and collaboration amongst those stakeholders has been really important for us organizationally. It's been great for me to experience that personally as well.

What does it mean to you to be actively involved in the community's growth? What are some of the projects you take on in order to help see the whole region grow and thrive?

We spend a lot of time focusing on banking initiatives. So I would argue that a lot of our lending helps the community economically thrive, but we also pay an awful lot of attention to our community's existence as far as sponsorships, grants, donations, some capital projects. Part of that is making sure that, I've said it before, a rising tide lifts all of our boats. As a community bank, yes, we succeed when our community succeeds, so that's great, but we also want to make sure we're giving back in those communities. So we spend a lot of time working with various organizations. I think we talked about in the past our affiliation with On Point for college. Yes, we have. We spent a lot of energy. We've got a few board members involved with On Point where there's been a large financial commitment, and it's very meaningful to make sure that the residents of Central New York are going to be well-represented as we go forward and there's a lot of job creation and the economy thrives here.

How has that collaboration with On Point been going?

It's been great. It's been great. The On Point scaling up. One of our board members and past CEO, John Watt, is heavily involved, as well as one of our teammates in Syracuse. So we're very close to it. And I think as we move along, there's an On Point office here in Syracuse, which is where they're really based, and then over in Utica. So it's a nice geographical match for us. And to see the projects we just spoke about with Chobani, Wolfspeed, Micron, as well as a lot of other private investment, private companies, there's a lot going on. So to try to position our residents for those opportunities, wherever that may be and whatever that may mean, we want to be part of that.

Now, it's hard to believe, but we are more than halfway through 2026. And it's very clear that you all have been busy over at NBT Bank. I think a lot in people in this region have been busy throughout this year. But what are your goals for the end of the year and into 2027? What are you hoping to see accomplished by the end of the year? What are some of your goals even farther out?

That's a great question. I would maybe argue it's a little bit of a moving target, but we've experienced a lot of growth. We've talked about growth, and that's great, but it needs to be the right type of growth, meaningful for our customers. We've acquired a lot of new customers, which has been fantastic. So we have been busy. But as we think about the rest of 2026, I keep feeling this optimism across our geography that really seems to be coming to fruition as far as needs as a bank for our customers to grow. So as they grow, we grow. So it's really going to be thinking about our customer base, what products, what services do they need? How do we fit within that scheme, if you will, to make sure we're supporting them both financially and from a standpoint of making their life a little more efficient, both as retail customers, as consumers, and on the commercial side.

We work a lot with our insurance group and we talked a little bit about fraud. We're partnering up with our insurance team to make sure a lot of our customers are protected with fraud insurance and things like that. So it's really thinking beyond what's in front of you today and trying to get past that and focus on what might this company need, thinking about the industry, where have we seen some changing dynamics in that industry with other customers, maybe getting out ahead of it, excuse me, with that particular customer. So it's working more closely with our customers than we ever have before.

A challenging project, but an exciting one at the same time.

Absolutely. Fun.

Dave, it's always great to have you on. Thank you so much for being here today. It was great talking with you.

It's been great. Thank you, Katie.

Talk CNY, presented by NBT Bank, is recorded in the production studio at CenterState's INSPYRE Innovation Hub. Talk CNY is available on all major podcast platforms or centerstateceo.com. Additional content and clips can be seen across CenterState CEO's social media channels. For new episode reminders, be sure to subscribe in your favorite podcast listening app, and don't forget to leave a quick review or five-star rating. Thanks for listening to Talk CNY, presented by NBT Bank.