In business, “timing is everything,” as the saying goes.
It certainly has been for John M. Davies, recently appointed president and CEO of Riverside Bank.
Davies was first brought on with the bank in 2006, with the U.S. on the brink of recession, and now finds himself at the helm after being appointed president and chief executive in July.
With 25 years of experience in the commercial lending industry, including work at some of the country”™s larger institutions, Davies has fought to ensure that businesses dissatisfied with their banks come to Riverside seeking help ”“ and not the other way around.
“The local businesses realize what they get when they come over here,” he said. “We don”™t lose customers to the big banks.” He added that 99 percent of the bank”™s clients are businesses.
Davies said that the business environment is such that banks must put every loan application under the magnifying glass, but he said credit is still available to businesses that are soundly managed.
“We”™ve increased our loan portfolio every year since 2006. I think the local banks are all lending. There is credit out there. The business owner has taken a more realistic deal, especially with property values (down), and I think that has helped.”
However, those low property values and the slow pace at which the Hudson Valley”™s real estate market has recovered will likely continue to act as a drag on job creation well into 2012, Davies said.
“The residential developers, they felt the most pain. The housing market in this area was a tremendous job creator and I think that it will probably take six, 12, 18, maybe even 24 months to work its way through the system.”
With four branches in the Hudson Valley, Davies said that Riverside Bank”™s connections to its local communities have enabled the bank to make loan decisions far faster than a national bank is capable of doing.
“There”™s no other bank out there that can top our turnaround time” on a decision over extending credit to a particular customer, Davies said. “Decisions happening thousands of miles away ”“ that doesn”™t happen at Riverside Bank.”
One distinct advantage that Davies said has community banks well-positioned despite the slow economy has been their ability to distance themselves from concerns over derivatives and mortgage-backed securities that have plagued many of the country”™s biggest lenders.
“We”™re somewhat fortunate that we didn”™t have the big bank problems,” he said. “I”™ve been with the larger banks. In ”™96 ”¦ their focus was on other activities like derivatives that nobody really understood.”
While many of the bank”™s clients are certainly worried about the prospect of a double-dip recession, Davies said that their biggest concern relates to the skyrocketing cost of health care for their employees.
“That”™s what we”™re hearing from our business owners: trying to plan with a heavy burden of health care ”“ that”™s where their uncertainty is,” he said. Several months after Congress passed the sweeping health care reform bill, Davies said there is still widespread confusion over its provisions and how they will be implemented. “How is a local business going to know what”™s in it and how it”™s going to affect them?”
With small businesses being the dominant force in the Hudson Valley, Davies said that few companies have a direct stake in the daily ebbs and flows of the stock market. However, he noted that business owners are looking ahead to the possibility of a second recession.
“They”™re not totally removed” from the national economy, Davies said. “It”™s more of, ”˜Okay, what”™s going to happen today and how am I going to plan for it? Is there going to be another recession? How do I plan if there is going to be another recession and my sales go down 10 percent?”™”
At the present, Davies said that Riverside Bank ”“ still relatively young with 23 years of existence ”“ is always looking for chances to expand. “We”™re looking at all opportunities to expand and grow.”
He stressed the bank”™s relationships with its local communities as paramount.
“One of the strong points about the bank is how we”™ve worked with our customers,” he said, noting that most Riverside Bank employees live in the same communities and frequent the same stores and restaurants as the bank”™s clients. “Without them (customers), we don”™t survive.”
