Ken Torsoe says a good developer with a keen eye for a good investment and who knows when to pass on one is an asset to a commercial bank. He should know ”“ he was  a board member for Union State Bank for 26 years and is now chairing Greater Hudson Bank, both of which achieved financial success in good times and bad.
Torsoe, who has been developing and building in the Hudson Valley for more than five decades, started out as a carpenter but quickly found himself building his own homes. Many of his apartment complexes and housing developments in and around the Hudson Valley have been home to thousands of people.
Torsoe and Tom Hales, former CEO of Union State Bank, met each other and hit it off immediately. “It was at a time when USB was floundering and in need of capital ”¦ we both agreed to put up $1.5 million of our own money to recapitalize the bank. I knew about real estate and investments and Tom was a certified public accountant. Between us, we took USB”™s worth from $800,000 in 1981to over $ 3 billion by 2007. Our 26-year relationship helped the bank grow and prosper, and most of all, make a profit for our investors.
“Business banking is built on good relationships. If Tom had not become so gravely ill, I think USB would still be going strong, but we sold to KeyBank. Tom”™s first mission was to take care of his health, and he is doing very well now, but had to retire.”
Torsoe knew Community Bank of Orange was trying to make a go of it but failing. . “With investors willing to take a chance and some of the former key members of Union State Bank”™s administration on board, we purchased the bank.” A total of $ 25 million was raised to recapitalize it.
Community Bank of Orange soon became Greater Hudson Bank with Torsoe at the helm of its board of directors. “My wife asks me why I am still so interested in banking. ?. Why do I do it? Because I love the business of building relationships and that is what banking is all about.”
The result of the Crash of 2008? Community banks, for the most part, survived without any help from the government, said Torsoe, because they didn”™t stray from their terms. “In good times, some banks think they can afford to make bad loans. In bad times, they realize they can”™t. We didn”™t make bad loans during the ”˜good”™ years, but now it has become much harder to get a loan because of what these lenders did. Personally, I”™m amazed that some are not sitting in jail. Today, all the I”™s must be dotted and T”™s crossed. It”™s very difficult for the first-time homebuyer, unless they go through the FHA process. There is no such thing as ”˜business with a handshake”™ as there once was.”
Greater Hudson Bank deals extensively with developers who need commercial loans to build residential housing; to get that needed construction financing, they must also build homes within a price the market can bear. “Lumber prices have come down,” Torsoe said. “The trades, too, have come down in their prices ”“ carpenters, plumbers, electricians ”“ know they must negotiate a contract all can live with so the developer can sell the homes at a profit ”“ even if not as large as they once hoped it would be ”“ and it creates work where there was no work at all.”
Torsoe warned of the risk of buying distressed properties as an investment. “Yes, homes in areas like Florida are more than priced to sell. The $150,000 condo that went up to $500,000 in the boom years is now selling for $60,000 to $70,000. It makes sense to buy one if you intend to keep it and use it for your family; but to buy several is foolish. The market is going to be very slow to recover. I believe it has hit the bottom, but it is going to take years before it is anywhere near what it was before the crash.”
