Banking on Main Street

March 1st, 2011

Fastest Growing Bank in New Jersey Offers Industry-Leading Mobile Banking Platform for Personal Banking Customers on the Go

Today marks the official launch of NJCB’s mobile banking service for customers with personal banking accounts. This convenient new service will enable our customers to access their personal banking accounts via cell phones and handheld devices, furthering NJCB’s mission to deliver outstanding customer service while being on the cutting edge of technological advances. Additionally, mobile banking will allow NJCB to tap into the newest generation of customers – those who may never step into a branch, but are looking for a customer-focused bank for all their banking needs.

Mobile banking applications have been developed specifically for those who use the Android, Blackberry, iPhone, and iPad platforms, however, the service will be accessible to all service providers and phone models with an Internet connection.

Mobile banking provides an innovative, convenient way to bank for our customers on the go. In this fast-paced, connected world, NJCB is demonstrating its commitment to meeting our customers’ evolving banking needs by offering the latest technology, providing a hassle-free way to manage accounts, and the opportunity to bank from any place they desire.

NJCB’s customers who bank online will be able to utilize the mobile service to access their accounts to check balances, view transaction history, pay bills and transfer funds internally. Current personal banking customers can request access to mobile banking by logging onto our online banking portal, www.njcb.com, where they can register their device and set up their secure information at no charge. Those interested in additional information about mobile banking can also speak with a banking representative at any of NJCB’s locations.

Mobile banking is a convenient, secure, and easy-to-use method of banking that enables our customers to access their accounts from the palm of their hand. We have developed a safe and secure platform for our mobile banking program and are thrilled to provide this solution to our customers who want the option to bank through their iPad, cell phone or PDA.

Tags: mobile banking, NJCB
Posted by Frank Sorrentino III at 12:08 PM | Uncategorized | Comment

February 15th, 2011

Fastest Growing Bank in NJ Achieves Best Performance Since Inception

In 2010 North Jersey Community Bank recorded its best performance since inception. In a year when most banks treaded water, or even worked to shrink their balance sheets, North Jersey Community Bank saw strong growth in our Assets, Deposits, Loans and Capital:

Assets grew from $515 to $602 million, an increase of $87 million
Loans grew from $398 to $494 million, an increase of $96 million
Deposits grew from $447 to $500 million, an increase of $53 million

The continued focus on smart, stable, and strategic growth of our balance sheet translated into over 100% increase in our earnings, as our Net Income grew from $2.2 million to over $4.7 million. Net Income in the 4^th quarter alone grew from $761 thousand in 2009 to over $1.5 million in 2010. This increase drove our Earnings per Share from $0.97/share in 2009 to $1.91/share in 2010.

This increase in profitability also drove an important measure of our value, book value per share to a new all-time of $15.17 in 2010 from $13.20 in 2009. This, together with the successful completion of additional capital raises increased our Tier 1 capital from $39 million at the end of 2009 to $49 million at the end of 2010.

Our success was driven by not only top-line improvement, but also by relentless cost control, and a continuous mission to generate the most efficient balance sheet possible placing us in one of the highest performing bank percentiles for Efficiency Ratio in the country. While we continue to allocate allowance for loan loss provision, and in fact increased our reserves in 2010 by over $2.9 million, we continue to maintain one of the lowest non-performing asset ratios amongst all banks.

Motivating this performance was a disciplined pursuit of relationship banking coupled with a relentless focus on having the finest product set in the industry. In 2010 we added many Cash Management Services, such as positive pay and ACH Origination and increased our technological abilities by providing image deposit capability at our ATM Machines In 2011 we will add Mobile Banking through Iphone, Blackberry and Android, as well as Business Debit Cards.

While the media reports on banks seeking to increase customer service, we delivered it… Our Relationship Management Team coupled with the latest available technology capitalized on the competition’s ineffectiveness.

Our financial success was accompanied by recognition of the efforts of our management… Laura Criscione was recognized as NJBIZ’s CFO of the Year; Jehan Sanders was named “Rising Star in Banking” by the New Jersey Bankers Association; and our bank was recognized in the Top 20 of the “50 Fastest Growing Companies in NJ by NJBIZ Magazine,” as well as named the country’s 64^th fastest growing Financial Company on INC Magazine’s 500. Our bank continues to be the fastest growing bank in the State of New Jersey’s history.

Our forward thinking, building of customer relationships, and exceeding expectations all came together in 2010 to deliver on our mission of “a better place to be.”

Posted by Frank Sorrentino III at 3:29 PM | Uncategorized | Comment

January 17th, 2011

FDIC SMALL BUSINESS LENDING FORUM – My Thoughts

On January 13^thI attended an FDIC held Small Business Lending Forum in Washington D.C which brought policy makers, regulators, small business owners, lenders and other stakeholders together to discuss the obstacles in small business lending. The forum raised more questions and problems rather than provide any substantive answers on how or what needs to be done to stimulate lending for small business…

While it was very encouraging to hear the more optimistic outlook from Chairman Bernanke on the economy, as well as an optimistic assessment of the regulatory environment from Chairman Bair, the lack of an effective plan to stimulate small and startup businesses was evident.

There were some common thoughts and themes:

There is a lack of early stage capital
Strong banks continue to lend
We need a better appraisal process
Banks should be relying on strong underwriting instead of collateral based loans
Need to remove the uncertainty in the financial sector
Real estate is the colateral basis for most small business loans

No one addressed the issue of how to provide loans to a small business that either does not have collateral, or has collateral value that is now impaired, and where cash flow is impaired because of the economic maelstrom.

If we are to support the small business sector, government will have to get involved and create the incentive to do so.

Most small and new businesses in one way or another rely on real estate to support their ventures…

Some facts:

95% of small business owners own their own homes
50% own the building or property that they run their business out of
60% own investment real estate

Clearly, real estate plays an important role in the life of a small business owner…

If businesses want to use the equity in their homes or other commercial real estate, why can’t the Federal Reserve allow for a future appreciation right to be attached for the purpose of creating capital? The warrant would self liquidate by granting a tax incentive or credit for any future profits of the business..Over a long enough time horizon, it is hard to imagine a scenario where the Fed would actually lose money.

Banks would receive a fungible source of collateral, the small business owner would get the funding they need, and the cost to the system would be negligible, or if done right, nil…

Tags: FDIC, Lending, Small Business
Posted by Frank Sorrentino III at 11:53 AM | Uncategorized | Comment

December 23rd, 2010

The National banks’ return to “customer service”: Real or Hoax?

Articles abound lately extolling the large national banks’ desires to return to “customer service.” However, as these banks face shrinking revenues from their once-profitable credit and debit card fees, and the myriad of other changes that will be occurring in the post Dodd-Frank world, how can we trust that their so-called return to great customer service is truly genuine?

Is this really a change of heart?

As one of the founders of a true customer service oriented community bank, I find the actions of these national impersonal organizations to be not only reprehensible, but disingenuous. For banks like ours, this behavior is the “gift that keeps on giving”… As more people begin to see through the national banks’ actions, customers will flee and come to us – where they will feel the authenticity of customer service.

Wise consumers have moved in troves to community banks as their trust in this “talk the talk, but don’t walk the walk” environment has existed. In fact, the recent Associated Press article describes national banks placing more “customer service” representatives on their floors. Is this a true commitment to customers, or will this simply create more opportunities to grab wallet share from customers? We can’t compare this strategic move to help sell the customer more, with the same efforts employed by our true customer service-oriented banks who genuinely wish to serve you better.

At the end of the day, the large nationals only see ones and zeros, with algorithms that understand how to maximize profitability at all costs, whereas the vast majority of community banks see people, like you and me, and truly care about their customer’s needs and lifetime desires. A true customer service oriented bank is motivated, not by the dollar signs at the end of the day, but by knowing that each customer is walking away happy, satisfied and confident that his or her financial needs are being met.

Tags: Banks, Community Bank, customer service
Posted by Frank Sorrentino III at 11:01 AM | Uncategorized | Comment

December 14th, 2010

Life Jackets for Underwater Loans & the Economy

Millions of Americans are struggling to stay afloat as they deal with mortgages that are technically underwater. What is missing here is a relatively easy solution that would help boost the economy and provide a life jacket to these homeowners through the use of the government’s balance sheet!

Approximately one in four homeowners in the United States currently hold mortgages that are technically underwater where the amount they owe on their loan is actually more than their home is worth now, even though the ability to pay is not impaired.

Without much fuss and possibly without any cost to the Treasury, owners with mortgages that cannot be refinanced because the loan to value on their home has dropped to levels below that which a bank can legally refinance, would now be able to take advantage of the lower rates available.

If the government provided a guarantee and the policy necessary to allow for such a program, many homeowners who currently are making their payments would be now free to refinance and in some cases reduce their monthly payments by 25 to over 50 percent. The program should not permit a government paydown or a cramdown of the loan balance; just the use of its balance sheet to allow the rate to be reset without triggering a now required principal reduction. All the government would be providing is the guarantee on the portion of the loan that is above the normal Loan-To-Value. In the event of a sale, the owner would still be responsible for any shortfall, and the government could add a warrant that if in the future the home is sold for a profit, then the government would share in the profit to cover its exposure.

That release of free monthly cash flow would benefit the economy in many ways. It would allow for:

More spending
More saving
And probably most importantly, an increase in confidence.

Banks, likewise, who participate in this program could be given tax free interest income on these type of loans to incent them to seek out and make every effort to find homeowners that qualify. Those incentives should only be provided to those banks that retain the mortgages on their balance sheets in order to give the incentives to the issuing bank, and not some class of disinterested investor. The program could also include State Tax incentives that would reward banks headquartered in the respective state in order to keep all the ancillary benefits that would accrue in the work required to re-underwrite all these mortgages locally.

Banks would hire staff, lawyers would get more work, title companies, appraisers, would all benefit, and local economies would rebound. The additional pressure of contemplating strategic default would be eliminated, and home prices would stabilize.

Removing this amount of uncertainty would greatly improve the economy, and could establish a working framework on which to build the structure of resolving all the defaulted mortgages in foreclosure…The government holds a life jacket, it just needs to use it before more homeowners drown.

Tags: bank, government, mortgage, underwater
Posted by Frank Sorrentino III at 2:10 PM | Uncategorized | Comment

October 25th, 2010

Basel III – What does it mean to your business?

With all that is going on in the changing world of finance, a new headline has emerged and is actively being talked about – Basel III Accords. You may find yourself asking “what does it mean?” or “why should I care?”

Let’s start with the basics. Basel I/II & III are a series of accords created by a committee of what is now the G-20 Finance Ministers and Central Bank Governors. The purpose of these accords are to set international capital standards for banks. The name is derived from their meeting place in Basel, Switzerland. In short, Basel I created a system for uniform standards around capital, Basel II sought to let the banks monitor themselves and in effect, lower capital standards. Then, the financial crisis hit, and recent talk of Basel III indicates that the pendulum may swing again fully to over-capitalize banks.

So why, as a small- or medium-sized business owner in the United States, should you care? The answer is that the actions that are being set in motion impact both the large national banks, and the smaller community banks. With capital standards rising and risk buffers being put in place to increase capital requirements, banks will be forced to reduce the amount of risk that they can take on. Less risk, means fewer loans, and higher costs associated with those loans.

If banks cannot leverage their balance sheets to the extent that they currently do, then a combination of less lending, coupled with more expensive pricing, will be needed in order to continue to attract capital for the financial industry.
The larger banks will shun riskier assets, and instead focus on what are considered assets with lower risk. Those needing lines of credit or commercial mortgages will find it more difficult to obtain these “riskier” loan types. Businesses without two-way relationships with their banks will find themselves out in the cold, as even some community banks will begin to shun certain one-sided “transactions” in favor of long-term commitments that involve the entire banking relationship – not only loans, but deposits, residential mortgages and the like.

One certain consequence is that the world of an endless credit supply, which froze up in the financial crisis, will continue to shrink. Credit will be rationed, and banks – in an effort to increase their returns – will have to reduce their costs. As credit losses directly impact a bank’s cost of doing business, those that pose a higher risk will be left in the cold.

So how do we sum up how all of this is going to affect you and your business? It has never been more important to have a relationship with your bank, and to be sure that your bank is committed to growing alongside you. For those at a national bank, I do not know how that is possible… For those with a community bank, when was the last time “you” asked some questions about whether or not you are in a relationship that is two-sided?

Tags: Banks, Basel III
Posted by Frank Sorrentino III at 6:30 PM | Uncategorized | 1 Comment

October 11th, 2010

Foreclosure – The Politics Behind the Process

What type of future will we have if the process of collecting on a debt becomes politicized, and instead of focusing on any semblance of the facts, we merely look to what is politically correct?

This is what is at issue with the current foreclosure debacle. Is there anyone who is looking at the facts, rather than whether or not this feels good? Evicting someone from their home, whether in a foreclosure or rental non-payment, is never easy, nor is it pleasant. However if we do not create an environment of responsibility, and accountability for one’s debts, then how can our society, and capitalism survive? Strategic defaulters are doing cartwheels in the streets celebrating, and many of their neighbors are considering whether they too should jump in on this seemingly free ride. This surely cannot be the policy direction that any of us are in favor of.

If however, anyone in this mess has been wronged – anyone who is legitimately making their payments and being forced through the foreclosure process – then stiff penalties should apply.

The system would be better off for all involved if there was an “expedited” process in foreclosure. Starting with the decision to buy a home, potential buyers would think harder about what they are doing, for the lure of living in a home for up to three years payment free would not exist.

Wouldn’t better decisions have made the sub-prime crisis less so? The real estate market surely would have found a bottom by now as all the impaired inventory would have already made its way to the market. The rental market would have strengthened, and may even have seen a resurgence in new building. Banks would lower rates as the cost to collect would fault, and the residential assets would be much more attractive.

In return for a much more streamlined foreclosure process, the government could impose a small transaction fee that could be used to fund an assistance program for those who are truly hurt by the economy, or other factors.

Are better assets, lower rates, less taxpayer assistance, a funded assistance program, no politics, and a functioning financial system really too much to ask for?

Tags: Foreclosure, rent, Strategic Default
Posted by Frank Sorrentino III at 11:07 AM | Uncategorized | Comment

September 23rd, 2010

Winning the Ties…

In this current environment where competition is fierce, and it seems that your prospective customer may be ambivalent about whom to choose, the importance of “winning the ties” becomes paramount. With all things being equal, how does your prospective customer choose between you and the competition?

”Winning the ties” means creating an environment where your prospective customer feels they get greater value from their “relationship” with you and your organization just by being associated with it. When it comes down to awarding business, and everything else is equal, your greater relationship value wins the tie every time. Greater relationship value can take many forms, but certainly being a “go to source,” or being considered a “respected advisor” will help to win the business that others consider comoditized.

This approach of creating greater value from a relationship is generally not customer specific, but an organizational philosophy and must be a focus of the organization. Just as important, this approach must be genuine, and it must create a welcoming environment that demonstrates that your organization cares not only about the potential customer, but to all customers.

To create greater relationship value do you “network” or instead, do you look to “build relationships?” How are you creating the visibility needed to make someone interested enough to research you and/or your company before they meet with you? What have you done to add value to your customer base besides supplying your direct products or services? Are you hunting for business, or have you created an environment where you are actually being hunted? Do you use your existing clients as ambassadors for your company? What community service initiative is your company involved with that demonstrates your commitment to not just profitability, but dedication to your roots?

It is important that we leverage all the tools that we have in order to win business today. By creating greater relationship value with your current and potential customers, you are not only positioning your business to win the ties, but you are building the credibility of your business. And in today’s business environment, credibility and winning the ties is what can make you and your business an industry leader. Where do you and your organization want to be?

Tags: business, Network, relationship
Posted by Frank Sorrentino III at 11:13 AM | Uncategorized | 1 Comment

September 7th, 2010

Strategic Defaults… Is this the culture we want?

Perhaps you’ve taken note of the cultural shift occurring in our country where the feeling of shame in some cases actually seems to be turning into a badge of honor. Remember the days when filing for bankruptcy was stigmatized in our society? Bankruptcy and default are no longer considered taboo, and this new way of thinking will have huge ramifications.

In today’s economy, we’re seeing this type of behavior more so than ever before. Timely bill payment is becoming less of a priority, as there is less dependence on credit scores today. Some borrowers, who were able to pay, deliberately allowed their loans to go into default to take advantage of required “arbitration” which reduced required payments… The news program 60 Minutes even highlighted the ability and willingness of scores of borrowers to default on their mortgages.

Personal responsibility for debt is being diminished by government intervention, which is disastrous for our economy. How will our society function if everyone assumes the debt contract they signed is basically meaningless? How will businesses function if the repayment of debt becomes optional? We are setting a bad example for future generations by shrugging off a late payment or by taking on debt without serious consideration as to whether it could be paid back.

Government is partially responsible for this mentality by suggesting there will be “bailouts” for those who overreach and fail. This results in unfairness for those who try hard to keep their bills current. Essentially there is encouragement for borrowers who would normally honor their responsibilities to simply ignore bills, as they watch neighbors and friends take advantage of the “system.”

If the government begins deciding who should pay back debt and who shouldn’t, we will likely see some severe unintended consequences, as we are seeing with the recent discussions on forcing banks to reduce principal amounts on loans to subprime borrowers. Banks will have no choice in this environment, but to constrain credit.

It cannot be expected that credit will flow easily if there is no intentional desire to pay it back. Banks make credit decisions based on the consumer’s ability and total responsibility to pay back the loan. With this new shift in a public that is shirking its responsibilities, banks need the ability to go after those who default, and there must be a more expedited process for banks to recover their assets. An 18 – 24 month foreclosure process, with a possible six to eight month extension because of a last-minute bankruptcy, does not help the system, and in my opinion actually hurts everyone by increasing the cost and desirability of lending.

Maybe we should ask ourselves – is this the culture we really want?

Posted by Frank Sorrentino III at 10:35 AM | Uncategorized | Comment

August 23rd, 2010

NJCB posts Strong Second Quarter, 2010 results…

Our strategy of smart, stable and continuing growth has translated into our most profitable quarter since our inception. The following demonstrate our continuing creation of shareholder value:

Total Assets increased $42 million to $565 million over the 1^st Quarter of 2010
Total Loans increased $24 million to $435 million over the 1^st Quarter of 2010
Net Income before payment of our Preferred Dividend increased $193 thousand to a record $1,095,243 over the 1^st Quarter of 2010
Book value per share increased from $13.60 to $14.14, an all time high…

Earning over a $1 million this quarter with our book value moving north of $14/share has positioned our bank at the top of our peer group…

Our “Client First” management style has enabled NJCB to continue to capture market share and profitably grow our balance sheet, while capturing the attention of the national news media. Recently, NJCB was featured as it hosted CNBC’s Power Lunch from our headquarters building, where we discussed recent trends in banking and financial regulatory reform with guest host Sue Herera. Please see our website to view this segment if you have not already seen it.

While new customer acquisition has been strong, we have also worked hard to increase the depth of the relationships we currently have with our existing clients. The 2^nd Quarter saw an unprecedented increase of new Demand Deposit Checking account opening from existing customers. While this has always been a focus of NJCB, our entire branch staff led by our new Chief Retail Officer Michele Calise has refined this mission and demonstrated that by being “a better place to be” for our customers with products such as Totally Free Checking, Simply better Savings, and Simply Better Money Market not only enhance our customer experience, but increase our bottom line.

(To see our entire Second Quarter Report, click here)

Posted by Frank Sorrentino III at 10:37 PM | Uncategorized | Comment