The weather might be frightening, but the economy doesn”™t seem quite as scary these days. And while it may be overly optimistic to predict an early thaw, the financial crisis appears to be behind us and the credit market is a little less frosty.
There is still much uncertainty, but in Westchester and the Hudson Valley there”™s cause for optimism ”“ and there is money available for expansion-minded businesses.
One local bank is, well, banking on the region”™s growth.
The Westchester Bank is gearing up to raise $33 million through a private placement to fund its expansion plans.
The Business Journal caught up with John Tolomer, president and CEO of the 2-year-old private bank, to learn more about the offering.
Tolomer talked about commercial lending ”“ rules are back in vogue ”“whether money is available for small businesses ”“ “you bet” ”“ and the bank”™s performance, which “has far eclipsed our most aggressive projections.”
Following are edited excerpts. For the entire interview, go to westfaironline.com.
Caryn McBride: You”™re seeing signs of a recovery?
John Tolomer:
“I am seeing the beginning of confidence and that starts every recovery. When people begin to feel more comfortable with their business, I think that will be a prelude to a recovery. It”™s going to take some time. I don”™t think we”™ll see a quick turnaround. In the third to fourth quarter of this year we”™ll begin to feel it.”
The Westchester Bank ended the year on a positive note?
“It”™s been phenomenal. As of Dec. 31, our assets are at $205 million, our deposits are at $185 million, our loans are $122 million and our profit, and I underscore the word profit because for a bank that”™s in its second full year to make a profit is extraordinary, but our profit is north of $1.1 million.
That puts us more than two years ahead of our business plan and that comes from a very successful business model.”
You have a shareholders”™ meeting Feb. 9. You”™re going to discuss raising additional capital?
“I can speak a little bit about it. The reason to raise capital is to continue to fund our expansion. Many banks are raising capital to write down bad loans and poor credit portfolios. Our situation is very different. Our timing was wonderful, we missed, kind of, the meltdown and we didn”™t have those kind of credit problems.”
And you didn”™t take any federal money?
“No, we did not take any TARP money; we”™re well capitalized. This capital raise is really all about being able to fund future growth. We will add branches and we will continue to lend money to small and medium-sized businesses and continue to do what it is we”™re doing. By raising the capital we”™ll have a larger lending unit and that will permit us to continue to stick to our business plan but be able to do it with a little bit more size and scope.”
What are you shooting for?
“Our capital raise is between $30.3 (million) and $33 million. We”™re looking at our existing shareholders; we”™ll certainly talk to them first. And we”™ve had many customers and local business people ask us about (whether the bank would) raise capital or issue stock.
“We will have a very formal presentation to walk people through what we”™ve done, what we”™re planning to do. And we”™ll have information sessions. People have to be a very qualified investor to be able to invest in our bank because we do it through a private placement.”
Where are you looking for additional branches?
“Westchester is a wonderful market. My philosophy is to surround the market ”¦ we want to continue to build our bank carefully, smartly. We”™re not going to look to do 10 branches in five years. My guess is we”™ll look somewhere between 12 and 18 months. A key thing for us, what will drive it, will be the location and the cost.”
Timeline?
“Our initial timeframe would be from Feb. 9, which is the shareholder meeting, until May 12. If we raise $33 million ”“ and we cannot take more than $33 million ”“ in a very short order we would close the transaction sooner.
“There”™s a great deal of enthusiasm to be able to be part of a local bank.”
