Forecast for 2023: Expected recession may be swifter, softer than feared

As we say goodbye to November — another month when the U.S. Federal Reserve raised interest rates by three-quarters of a percentage point — and prepare to bid adieu to the 2022 calendar year, the bleak news is that a recession seems likely. The bright news is that local banking leaders expect the recession to be relatively mild and short.


“The paradigm has shifted dramatically in as few as three to four months,” said Martin K. Birmingham, president and CEO of Five Star Bank, which provides a wide range of consumer and commercial banking and lending services through a network of more than 45 offices throughout Western and Central New York and a commercial loan production office in Maryland. “The yield curve is showing a likelihood of a recession and it’s fast becoming a perfect storm in terms of expenses growing faster than revenue for many businesses.”

The yield curve — which can be flat or inverted — graphs the relationship between bond yields and bond maturity and has long been a reliable predictor of recession. Every recession since at least 1955 has been foreshadowed by an inverted yield curve and there has only been one false positive during that time. The yield curve is currently inverted in the United States – even more so than it was in the build-up to the 2008 recession.

Dan Burns, Rochester regional president at Buffalo-based M&T Bank, also believes we’re “in for a mild recession but hopefully a quick one,” in the year ahead. He’s optimistic the economy has many things going for it that will soften a recession, including voluminous job openings nationally and, locally, a strong regional business environment.

Dan Burns

“2022 was one of our best years in Rochester — a lot of business owners are doing well,” said Burns, who noted a lot of larger companies are forecasting growth and expansion into larger markets.

Other positives Burns pointed out: demand for housing and affordable housing in the region remains strong, continued economic investment in the City of Rochester (such as Constellation Brands relocation downtown) and the recent pledge by Micron — the world’s fourth-largest producer of semiconductors —  to invest $100 billion over the next two decades on a manufacturing facility in the Syracuse, which Burns expects will bring “a lot of positive spillover” into the region.

David J. Nasca, president & CEO of Evans Bank, a Buffalo-based full-service financial institution that provides community banking, insurance, and wealth management services and has locations in Fairport, Penfield, Perinton, and Irondequoit, is also cautiously optimistic about the year ahead.

“Opinion-wise, I do think we will have some recession in the next year,” said Nasca, pointing to the rising interest rate environment and the inverted yield curve. “But the strength of the economy indicates it will be a shorter impact. Right now, the underpinnings of the economy still have some good strength.” These strengths include a strong labor market, continued indicators of a solid economy in western New York, and an absence of credit issues for most businesses locally.

Still, there are issues for consumers, most notably inflation on the services side of the economy, as opposed to the goods side that was prevalent when the COVID-19 pandemic first hit, and supply inflation due to increased costs on labor, energy, food, and building.

When it comes to the uncertainty of the year ahead, local bank leaders stress that one of the ways consumers and business owners can get through it is by maintaining a strong relationship with their bank – and vice versa.

“Communication has always been important in the banking industry, but in times like this it becomes even more important,” Birmingham said.


At Evans Bank, “We are staying close to the customer,” said Nasca, who noted Federal Reserve Chair Jerome Powell indicated in August 2022 there will be “some pain” ahead as the central bank fights inflation via rising interest rates. “What it portends for banks is that we’re here to help our clients – in good times and bad, we’re here.”

Nasca notes that community banks were very successful in helping clients navigate the uncertainty of the COVID-19 pandemic by providing support with services like the Paycheck Protection Program (PPP) loans and forgiveness. He anticipates that same strong and guiding relationship in the year ahead.

Burns also stresses the openness and availability of his team at M&T Bank to support customers in 2023. His advice to businesses? “Keep your eye on the ball, pay attention to expenses and capital expenditures, and be smart with your decisions.” Additionally, he encourages businesses to have transparency, good communication, and a strong relationship with their bank, as it will lead to better outcomes for everyone.

Birmingham looks forward to remaining steadfast in taking care of customers and Five Star Bank and encourages businesses to be as proactive as possible. He also recommends businesses of all sizes have a strong command of their cash flow cycle and reach out to the bank if cash needs arise to help navigate their decision tree when it comes to borrowing.

“Keeping an eye on liquidity and cash is so important because at the end of the day it’s cash and liquidity that can help bridge getting through this economic cycle,” Birmingham said.

Caurie Putnam is a Rochester-area freelance writer.

SBA funds start to flow, but there’s more help locally for next round

Even though additional pandemic aid for small businesses was under consideration in Congress this week, that may provide little clarity for small-business owners — especially really small ones — whether they will get the financial assistance they need. 

Perhaps more clear is that funding has started making its way to businesses in the Rochester area and there is plenty of help available for negotiating the application process whenever a new round begins. 

M&T Bank, based in Buffalo, processed more than 27,000 applications from Maryland to Buffalo in the last round, which ran out of money a little more than a week ago. The largest Small Business Administration lender in the area for more than two decades, even M&T was hard pressed to meet the overwhelming demand. 

Dan Burns
Dan Burns

“We went from 300 people assigned to do this work to 2,300 people,” said Dan Burns, Rochester region president for M&T. “I’ve never felt more proud of a group of people in my life.” 

In the Rochester area, the bank won approval for 1,800 Payroll Protection Program loans totaling $440 million. CNB reported that during the last round of funding, it helped 2,502 small businesses with SBA loans totaling  $289.6 million. 

Burns agreed that some particularly small businesses may not have won approval before the window closed. “There are a lot of small businesses that maybe, they’re trying to make ends meet and they don’t have a finance person,” he said. “We’re very hopeful that there will be an agreement in Washington and the window will open back up and we’ll be able to take care of these clients.”

National news reports have slammed some of the larger banks for focusing on businesses that most Americans would not consider small, winning hundreds of millions of dollars for public companies with hundreds of employees. 

The National Federation of Independent Businesses, an advocacy group, is lobbying for an aid package of more than $400 billion, with at least half reserved for companies with 20 or fewer employees. 

At the same time, several financial institutions and advisors have stepped forward to assist businesses with future applications. 

On Friday (April 24) at noon, the Canandaigua Chamber of Commerce will be holding a webinar with Canandaigua National Bank President and CEO Frank Hamlin III and other CNB officials. The topic is how the bank and other financial institutions can help businesses with SBA loans and other aid programs. They also offer advice on managing business finances during this disruptive time. Participants can register at 

RDG+Partners, a Pittsford-based accounting firm, is hosting a free weekly “COVID-19: Stay Strong Webinar Series” on Thursdays at 1:30 p.m. through the end of May. The seminars cover a variety of topics related to applying for federal aid programs. 

John Rizzo, managing partner of the firm, said “Perhaps the greatest challenge is that new information about financial disaster relief initiatives is released every day, and unless business owners are on top of it, they could miss updates that are critical to their success in securing funding.”

Rochester-based Paychex, meanwhile, has announced it will connect interested clients with several online lenders, including Biz2Credit, Fundera, and Lendio, so they can apply quickly when another opportunity arises. 

Martin Mucci
Martin Mucci

 “The fact that $349 billion in Paycheck Protection Program loans were allocated in just over two weeks speaks to the critical financial needs America’s businesses continue to have as they do everything they can to stay afloat during this unprecedented uncertainty due to COVID-19,” said Martin Mucci, Paychex president and CEO.

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Epping takes senior VP job at M&T Bank

Steve Epping, a 34-year veteran of the business community, has been promoted to senior vice president at M&T Bank, heading commercial real estate and middle market lending from the Rochester regional office of the Buffalo-based bank.

Epping takes the place of another veteran, Dick Mueller, who will retire in March and help in the transition until then.

Steve Epping
Steve Epping

“Steve is an exceptional leader, one with tremendous knowledge and experience working with businesses throughout the Greater Rochester region,” said Dan Burns, regional president for M&T Bank. “With Steve at the helm, we’re certain our team will continue to bring insight and expertise to the table in ways that drive deep conversations about business opportunities and objectives, not just banking transactions.”

Epping joined the bank in 1992 and his most recent position was as business banking market manager for Buffalo, Rochester and Syracuse. He works out of the M&T regional office at 3 City Center, located at 180 S. Clinton Ave.

“I’m thrilled to help lead and build a great team here in service of our local customers and community,” Epping said. “Rochester is seeing new levels of growth and revitalization, and 2020 is shaping up to be a milestone year.”

In his new role, Epping reports directly to Burns, and his direct reports include Senior Group Manager Phil Smith, Group Managers Curt Provenzo and Vito Caraccio, and Commercial Portfolio Manager Michele Gilman.

Epping is a graduate of the State University of New York at Buffalo State and serves on the boards of DePaul Community Services, Empire State Certified Development Corp. and New York Small Business Development Center. He and his wife, Jeanne, live in Webster.

[email protected]/(585) 363-7275