Big Apple banking boom.

In the era of bank mergers and acquisitions, bank expansion in the Big Apple is exploding.

The large chains are confident of their success, but in case they flop, the small operators are waiting in the wings, looking to eventually take their space at a steep discount. "We'll do our expansion in two or three years when all those branches who have expanded don't work out and will be offered at a discount," boasted Paul Fornaby, managing director of Country Bank, a local five-branch operation with approximately $315 million in assets.

But if spokespeople for banks such as Wachovia are telling the truth, the small banks may be waiting a lot longer. "We could not be more pleased with the success we're having in Manhattan," Fran Durst, vice president of corporate communications for Wachovia said.

The bank opened its first two branches, at 45th Street and Madison Avenue and in Rockefeller Plaza last year. According to Durst, the branches "exceeded their year-end goals in just a couple months, as it relates to deposits."

Since then, the bank has opened three more Midtown branches and has plans for six more by the fall, including a branch at Broadway and 56th Street. According to Randy Anderson, a professor of real estate finance at Baruch College's Zickland School of Business, the strategies are "a risky sort of endeavor."

But, he added that it's a calculated risk, because New York, along with cities like Los Angeles and San Francisco, grew in population during the 1990s.

"A lot of these banks are betting on the fact that the 24-hour cities are going to continue to experience population growth," said Anderson. "Some of this population growth is occasionally in older age groups. The baby boomer group is a large demographic."

The baby boomers, Anderson explained, "are in their peak wagering years." Their deposits are supplemented by those of wealthy retirees and seniors who have decided to move back to the city for the cultural opportunities, Anderson added.

Hugh Finnegan, a real estate attorney with Sullivan and Worcester, believes the banks' main street invasion has been influenced by a variety of factors.

In the case of banks like Wachovia, "they're looking to expand their presence in this area," he said.

"They haven't had a strong presence in the New York metro area, particularly in the city itself," Finnegan said.

In other cases, according to Finnegan, banks are simply looking for opportunities to be acquired. However, Finnegan said he was surprised by the irony of more "brick-and-mortar" branches in the age of online and telephone banking.

Finnegan added, "For some of them, (the expansion) will work, for some of them, it won't. Which ones are in which category? I don't know."

Fornaby said he believed the banking expansion was triggered by the ventures of Commerce Bancorp, Inc., a Camden County, N.J.-based bank, which plans to open 40 additional branches in New York this year.

Commerce deposits are currently a 50/50 split between accountholders in the New York and Philadelphia area, but the New York shares are expected to increase, according to an article in the Philadephia Business Journal last month. In a filing with the Securities and Exchange Commission, Commerce said that by 2009, 60 percent of its deposits will be from metro New York.

Meanwhile J.P. Morgan Chase recently acquired Bank One of Chicago and the merger of Bank of America and Fleet was announced last Thursday. But Bank of America spokeswoman Eloise Hale said the company was trying to consolidate office and branch space and did not have immediate plans to open new branches in New York.

However, the Fleet branches in Manhattan will become Bank of America branches. The company also is working with developer Douglas Durst on an office tower at 113 W. 42nd St.

In February, North Fork Bancorporation Inc. and GreenPoint Financial Corp. announced a $6.3 million merger, which will create the largest regional bank in the area. Meanwhile, Wachovia has hinted that it's looking to open even more branches in Manhattan's downtown neighborhoods.