If the big banks are the Mr. Potter of the recent economic meltdown ”“ sucking the life out of Bedford Falls, er, America with their sub-prime loans, derivatives and other greedy practices ”“ the community banks have cast themselves as self-sacrificing George Bailey. Trouble is the public hasn”™t always seen it this way.
“I think (the public) and Washington have painted us with the same brush,” said Reyno “Rey” A. Giallongo Jr., president and CEO of First County Bank in Stamford, Conn. “But we”™ve been around for 160 years. ”¦We didn”™t go to the sub-prime party, so we don”™t have the sub-prime hangover.”
“I do think banks have been impacted negatively, and the issue of the broad brush is true,” said George Strayton, president and CEO of Provident Bank in Montebello. “Our bank has been in business since 1888. Just because times are tough, you don”™t do things differently.”
“Technology has leveled the playing field between the big banks and the community banks,” said John Tolomer, president and CEO of The Westchester Bank in Yonkers. “The key thing is that the community bank is local people dealing locally.”
Thinking small
Indeed, despite the uncertainty posed by a lagging recovery and voluminous new Congressional legislation on regulation, community bankers say they continue to serve a public that embraces general depositors, homeowners, businesses and nonprofits alike.
With interest rates positioned relatively attractively at 5 to 7 percent, community banks are lending to homeowners and small businesses. The 122-year-old Community Mutual Savings Bank ”“ which has branches in Eastchester, Greenburgh, Harrison, Mount Kisco and Mount Vernon, its flagship ”“ recently announced closing nearly $10 million in loans for commercial and multi-family properties in Westchester and the Bronx over the last six months. They range in Westchester from a $2.1 million loan for refinancing an office building in Peekskill to a $275,000 loan for refinancing a commercial property in South Salem.
“We”™ve begun to become a small-business lender,” said John E. Ritacco, Community Mutual”™s president and CEO, citing a 20- to 25-percent increase in small-business loans.
But he acknowledges that while there are those who are interested in borrowing, there are also home and business owners who are skittish of more debt in an age of anxiety.
“The issue today is the economy,” First County”™s Giallongo said. “We have all kinds of money to lend. ”¦ But consumer confidence is not great, and small businesses are not adding new inventories.”
Added Westchester Bank”™s Tolomer: “There”™s loan demand. But overall, it”™s being driven by the refinancing of existing debt rather than business expansion. ”¦ When we begin to see increased demand for business expansion, that will be a sign that the economy is getting back to normal.”
Getting creative
In the meantime, community banks continue to prepare themselves for the bounce that has yet to come by employing the three As ”“ advertising, attractive branches and amenities.
“We”™ve actually increased our marketing and advertising,” said Karen Kelly, director of marketing at First County, “emphasizing our strengths, which include our people, who are our greatest strength.”
Though many of community banking”™s advertising dollars have shifted from print to digital ”“ adding to the newspaper industry”™s woes ”“ Kelly said that First County”™s print mortgage ads get a good response.
Also earning good notices are such innovative features as Westchester Bank”™s Remote Capture check-scanning service, which lets business customers deposit checks safely into their accounts from their own offices.
Those who do venture into banks find their amenities offset by interior designs that range from the handsomely efficient to the downright artistic. Provident Bank has partnered with the Edward Hopper House Art Center in Nyack ”“ the birthplace and childhood home of the American Realist painter ”“ to exhibit works by local artists, beginning with painter Natasha Rabin, whose “Luminous/women” series includes a portrait of Grand View-on-Hudson author Toni Morrison.
The Provident/Hopper House partnership is one way banks are helping their communities ”“ and themselves.
From its establishment in 2001 through 2009, the First County Bank Foundation Inc. has awarded 343 grants totaling $3.5 million to Connecticut organizations in Darien, Greenwich, New Canaan, Norwalk, Stamford and Westport. These include the Cos Cob-based Kids in Crisis, which recently received $10,000 that was applied to its Safe Haven for Kids Shelter, which provides emergency housing for children; and Positive Directions ”“ The Center for Prevention and Recovery in Westport, which plans on using its $5,000 grant for its adolescent substance-abuse treatment program.
Building relationships
Few banks are more socially conscious than Community Mutual, which hosts periodic first-time home-buyers programs, offering guidance and refreshments, and special events like the recent Greenburgh barbecue honoring veterans being taped for an oral history project.
Even The Westchester Bank ”“ which just celebrated its second anniversary and doesn”™t have a foundation yet ”“ has given away more than $100,000 to nonprofits.
These tend to be social rather than cultural organizations.
“Health and human-service agencies in my mind win the day,” Provident”™s Strayton said, “which makes it even more difficult for the arts.”
Still, community banks ”“ which are receiving grant applications in increasing numbers ”“ haven”™t abandoned culture. Community Mutual has supported ArtsWestchester”™s fund-raising golf outing. Westchester Bank”™s Tolomer is on the board of trustees of the Hudson River Museum in Yonkers.
“It”™s also about bringing time and talent to other organizations,” Strayton said.
Ultimately, these bankers say, it”™s about the relationship between their organizations and the public. After all, interest rates may go up in the third quarter of next year ”“ to the delight of depositors and dismay of borrowers. The 5,000 pages of new federal regulations may try the banks ”“ and their customers.
But the need for quality service remains.
Said Strayton: “What is good for the community is good for our bank.”
