Small banks aren’t playing David to the Goliaths, but they are succeeding for customers where the big boys sometimes won’t even try.
(page 2 of 2)
Having directors in each part of the market has spurred the bank’s success, says Ladio, who was one of MidCoast’s organizers. “From the beginning, that was part of our strategy, and it has helped tremendously.”
So has the customer loyalty Ladio developed during his previous tenure at Artisans’ Bank. Like a top hairdresser, he seems to have taken several clients with his move.
Paul Mills, co-owner of Mills Brothers Markets in Milford, worked with Ladio to secure an Artisans’ commercial loan for more than $1 million about 10 years ago. “As soon as Jim left there, we were looking for every reason to try to do business with him,” says Mills. A slightly lower interest rate gave Mills the reason, and he refinanced the loan with MidCoast. He also bought stock in the new bank.
Frank Montisano, president of Excel Business Systems in Newark, had banked with Artisans’, where he worked with Mike Lumia, now a MidCoast vice president. Because of the relationship, he took out a $1 million loan with MidCoast.
“I’m a firm believer that the relationship is often with the people and not the institution,” says Montisano. “When you have people like Jim and Mike, who take the time to understand your business and what you’ve done in the past and what you’re trying to do, that insight is invaluable.”
While Community Bank Delaware targets Sussex County and MidCoast looks to expand into Pennsylvania and Maryland, their combined assets pale in comparison to Christiana Bank & Trust, which has established a national footprint with its trust business. Last year that business totaled a record $3.9 billion, more than double the 2006 figure. That made Christiana the 110th largest FDIC-regulated trust company (out of about 500) in the country.
Located in affluent Greenville, Christiana was founded in 1994, during the height of banking’s merger mania. “The belief was that with all of the mergers and changes in banking locally, there was an opportunity for a local bank that would focus on individual attention and personal service,” says president and CEO Zissimos Frangopoulos.
More than half of Christiana’s 57 employees are in the trust department. “Our trust business is built on quality service as opposed to volume-dependent business. We provide competitive value, and that doesn’t necessarily mean the highest interest.”
In June 2007 Christiana lost some of its local identity when it was purchased by National Penn Bancshares, Inc., headquartered in Boyertown, Pennsylvania. “The acquisition gives us the financial resources and product capabilities of a larger bank,” says Frangopoulos. “As a stand-alone bank, we were too small to provide the traditional mortgage product like 30-year fixed, or to offer credit cards. Now we can.”
Christiana’s management and staff have been retained by National Penn, and Frangopoulos says he and his officers continue to have full decision-making authority.
The three banking institutions demonstrate that size does matter, but big isn’t necessarily the best. Too small to be affected by the subprime lending scandals, and just small enough to make quick decisions while providing personalized services, Community Bank, MidCoast and Christiana are cashing in on their advantages.