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Cuomo launches Business Mentor NY
Gov. Andrew Cuomo on Thursday announced the formal launch of Business Mentor NY, the state’s first “large scale, hands-on” mentoring program geared to help entrepreneurs and small businesses across New York overcome challenges and spur growth. First mentioned in Cuomo’s State of the State address, the new initiative builds on the volunteer-mentoring efforts that helped […]
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Gov. Andrew Cuomo on Thursday announced the formal launch of Business Mentor NY, the state’s first “large scale, hands-on” mentoring program geared to help entrepreneurs and small businesses across New York overcome challenges and spur growth.
First mentioned in Cuomo’s State of the State address, the new initiative builds on the volunteer-mentoring efforts that helped businesses following Superstorm Sandy, Hurricane Irene, and Tropical Storm Lee, the governor’s office said in a news release.
The free mentoring program connects volunteers working in the private sector to small businesses and minority and women-owned businesses to help them address specific challenges and obstacles to success.
The U.S. Department of Housing and Urban Development provides some of the funding for the program, while Empire State Development handles the program’s administration, Cuomo’s office said.
The one-on-one guidance and counsel will complement the state’s current network of financial and technical-assistance providers.
“When fully operational, it will function as one of the largest integrated networks in the country that will meet the needs of all businesses across New York state,” Cuomo said in the news release.
The mentoring network includes lawyers, accountants, business consultants, and entrepreneurs, along with experts in the field of finance, retail, communications and information technology, human resources and staffing, public relations, and sales and marketing, according to the governor’s office.
The state says it is conducting the program in partnership with MicroMentor, an initiative of Portland, Ore.–based Mercy Corps
Mercy Corps, to leverage its track record of success nationwide.
Mercy Corps says it works to “alleviate suffering, poverty, and oppression by helping people build secure, productive and just communities,” according the organization’s website.
MicroMentor says it has found that businesses that participate in formal mentoring programs, such as Business Mentor NY, are more likely to increase their annual revenue, create jobs, and launch successful businesses compared to business that don’t participate in mentoring programs.
As part of the second stage of the program, New York will launch the Business Mentor NY website this spring. It’ll allowing small businesses to register for the program online, review mentor profiles, and engage with mentors directly.
Program administrators will also be available to help small businesses identify suitable mentors and ensure program quality.
In the final stage, Business Mentor NY will be available to small businesses throughout New York, the governor’s office said.
Contact Reinhardt at ereinhardt@cnybj.com
Chemung Financial profit slips 30 percent in Q4
ELMIRA — Chemung Financial Corp. (NASDAQ: CHMG), the parent company of Chemung Canal Trust Company, reported net income of nearly $1.5 million, or 32 cents per share, in the fourth quarter. That’s down 30 percent from the $2.1 million, or 46 cents a share, the banking company earned during the same quarter in 2012. Excluding
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ELMIRA — Chemung Financial Corp. (NASDAQ: CHMG), the parent company of Chemung Canal Trust Company, reported net income of nearly $1.5 million, or 32 cents per share, in the fourth quarter.
That’s down 30 percent from the $2.1 million, or 46 cents a share, the banking company earned during the same quarter in 2012.
Excluding certain one-time gains and acquisition expenses, Chemung Financial’s core net income for the fourth quarter was $1.7 million, or 37 cents per share, it reported.
Chemung Canal Trust Co. completed its acquisition of six former Bank of America branch offices located in Auburn, Cortland, Ithaca, and Seneca Falls in the fourth quarter.
The bank acquired nearly $178 million in deposits and $1.2 million in loans in the transaction.
Chemung Financial expects the acquisition to add to its earnings in 2015. The company now operates 31 branch offices in New York and 3 branches in Pennsylvania.
It’s Chemung Financial’s fourth acquisition over the past five years.
For the entire year, Chemung Financial earned net income of $8.7 million, or $1.87 per share, down 21 percent from $11 million, or $2.38 per share, during 2012, the company said.
As expected, 2013 was an “eventful and challenging” year as earnings came “under pressure” from net-interest margin compression, Ronald Bentley, president and CEO of Chemung Financial, said in the earnings report.
“The single best strategy to combat margin compression is to grow our balance sheet, so we were pleased with the acquisition of six branch offices in contiguous markets during the fourth quarter of 2013. This transaction becomes increasingly accretive to earnings as we channel the acquired deposits into loans over the next few years,” Bentley said.
Besides the acquisition, Chemung Financial generated “solid” organic growth in both loans and deposits during 2013, Bentley said.
“Commercial loans increased $64.5 million, or 14.2 percent, and consumer loans increased $42.4 million, or 17.7 percent. Excluding the deposits acquired in the branch acquisition, organic growth in deposits was $40.9 million, or 3.9 percent,” he added.
As of Dec. 31, 2013, Chemung Financial reported $1.4 billion in total assets and $1.89 billion of assets under management or administration within its Wealth Management Division.
Those figures are up from the $1.2 billion in total assets and $1.74 billion of assets under management or administration within the Wealth Management Group at the end of 2012.
In addition to retail and commercial banking products, Chemung Canal Trust provides wealth-management products, as well as trust, estate, retirement, and investment services.
Chemung Canal Trust currently has 34 total bank branches in Broome, Chemung, Schuyler, Steuben, Tioga, and Tompkins counties in New York and Bradford County in Pennsylvania.
Chemung Financial also operates five branches, under the name Capital Bank, in Albany and Saratoga counties.
Contact Reinhardt at ereinhardt@cnybj.com
GPO Federal Credit Union names Mayhew to president, CEO posts
NEW HARTFORD — The board of directors of GPO Federal Credit Union (GPOFCU) in New Hartford on Tuesday announced it has selected Nicholas Mayhew to serve as president and CEO. Mayhew assumes his new role on Feb. 3. He most recently served as vice president and CFO of Rome Memorial Hospital, GPOFCU said in a
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NEW HARTFORD — The board of directors of GPO Federal Credit Union (GPOFCU) in New Hartford on Tuesday announced it has selected Nicholas Mayhew to serve as president and CEO.
Mayhew assumes his new role on Feb. 3.
He most recently served as vice president and CFO of Rome Memorial Hospital, GPOFCU said in a news release.
Mayhew has also served on the GPO board of directors for 25 years, including his current role as vice chairman.
“I am looking forward to growing the credit union and continuing to stress the importance of member service … treating our members as we want to be treated ourselves,” Mayhew said in the news release. “I have utmost confidence in the GPO team and that we will continue to be a leading credit union in Oneida, Herkimer, and Madison counties.”
Mayhew is replacing John Prumo, who is retiring as GPO’s president and CEO on March 31 after more than 40 years, GPOFCU said.
Prumo provided “outstanding” leadership to the credit union, Leo Callari, chairman of GPO’s board of directors, said in the news release.
“He is recognized for building the credit union into a [more than] $200 million [asset] institution serving 25,000 members with six branch locations,” Callari said. “We are confident that GPO will continue to grow and thrive under Nick’s leadership as well.”
Founded in 1931 and headquartered in New Hartford, GPO Federal Credit Union is a federally insured, member-owned, financial cooperative.
Contact Reinhardt at ereinhardt@cnybj.com
USDA awards Volney $1.7 million loan and grant for drinking-water system
VOLNEY — The U.S. Department of Agriculture (USDA) is awarding the town of Volney a loan and grant totaling $1.7 million to help bring clean drinking water to more local residents. U.S. Senators Charles Schumer (D–N.Y.) and Kirsten Gillibrand (D–N.Y.) today announced the funding from the USDA’s Water and Waste Disposal Loan and Grant program.
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VOLNEY — The U.S. Department of Agriculture (USDA) is awarding the town of Volney a loan and grant totaling $1.7 million to help bring clean drinking water to more local residents.
U.S. Senators Charles Schumer (D–N.Y.) and Kirsten Gillibrand (D–N.Y.) today announced the funding from the USDA’s Water and Waste Disposal Loan and Grant program.
The USDA is awarding Volney a federal loan worth $1.2 million and a federal grant worth $500,000 to construct a new distribution system to bring drinking water to residents in Airport Water District Extension No. 2.
This “targeted” federal investment will help Volney improve its infrastructure, enhance public health, and spare local finances, Schumer contended in a news release.
“This investment means a safer, cleaner drinking water supply is coming to the town of Volney; and the town can now use funds it otherwise would have spent on this project for other projects to benefit residents,” Schumer said.
Contact Reinhardt at ereinhardt@cnybj.com
The Beeches: Adapting in the second hundred years
Necessity is the handmaiden of invention. — author unknown ROME — On Dec. 12, 1901, Guglielmo Marconi received the first radio signal transmitted across the Atlantic Ocean. At the same time, Frank Destito was on board a ship bound from Italy to New York City — final destination: Rome, N.Y. Destito, who was newly married,
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Necessity is the handmaiden of invention. — author unknown
ROME — On Dec. 12, 1901, Guglielmo Marconi received the first radio signal transmitted across the Atlantic Ocean. At the same time, Frank Destito was on board a ship bound from Italy to New York City — final destination: Rome, N.Y.
Destito, who was newly married, followed his dream to come to America, the land of opportunity. Four years after his arrival, he brought his young wife, Michelina, and their children to join him. When the cobbler’s daughter arrived in America, she found her Rome house full of boarders, something her husband had forgotten to mention. Michelina cooked breakfast and created original dinner recipes, for which she charged the boarders a dime.
In 1908, building on the experience and reputation of the boarding house, the young couple opened the Savoy Restaurant in downtown Rome, named after the royal family of Italy. Noted for its five-cent schooners of beer, it was a success for more than four decades before the family decided to expand the business. In 1949, a newly married son, Pasquale, and his wife visited the estate of Dr. Frank M. Potter, the vice president of General Cable Corp., hoping to buy one of the cottages on the 52-acre property just north of the city. While his wife focused on acquiring a residence, Pasquale saw a business opportunity. Turning to his brothers Orlando and Rosario, the three convinced their mother that the estate could be become a restaurant.
The Destito family added The (Paul Revere) Lodge in 1955, renamed the Inn at The Beeches, and a 40,000-square-foot office building in 1985 that currently houses nine tenants. Over the decades, The Beeches Conference Center and the Inn on Turin Road have both been expanded and remodeled several times. The third generation runs the family business today: Orlando (Orrie), Frank, and Dominick. Christopher Destito, a partner in the family business, died on Jan. 21, 2010.
From its humble origins as a boarding operation, the Destito family “… now employs up to 140 area residents in-season, and the properties include 225,000 square feet of buildings, which are owned by the Destito Realty Co. [formed in 1989],” says Orrie Destito. “The business … [generates] between $10 [million] and $15 million [annually] … Our facilities include 70 guest rooms and seven, extended-stay suites plus three restaurants. Our banquet facility has 10 rooms and the capacity to seat 800 at one sitting. For decades, we grew with the community. Today our challenge is that the city is only half the size it was in the 1950s and the populace is less affluent. (The Rome census of 2012 counted 32,840 residents.) When we built the Inn in 1955, Rome had a lot of industry: Pettibone, General Cable, and Griffiss Air Force Base. The population shift has forced us to reach outside Rome [for business] and to diversify. We now draw weddings and conferences from up to 100 miles away and catering has become a growing part of our business.
The Beeches is also adapting to industry changes that have boosted competition.
“The hospitality industry has really changed,” says Destito. “There is a lot more competition from the fast-food and casual-dining industry. We also need to change the fact that The Beeches is a nine-month operation. The challenge is to attract more activity in the winter months. [Historically], the secret to our success has always been our ability to adapt and to come up with fresh ideas. We look upon hardships as just another challenge. Our parents taught us that complaining about a problem doesn’t … [fix] it. We need to constantly look for new trends and opportunities. For example, in 2010, once we had acquired a state liquor license, we created CD Food & Beverage Co. to provide alcohol to casino customers at Turning Stone.”
Embracing change
The Destitos have long been known for their creativity and for seeing opportunities.”Uncle Pat (Pasquale) was the Cecile B. DeMille of Rome,” asserts Orrie Destito. “We used to have toga parties at The Beeches, including chariot races on the grounds. He always had a creative spark to attract area residents to our facilities.” But creativity is not the only marketing strategy employed by the family. “We are refocusing on attracting more bus tours, something we … [initiated] in 1978. Also, the New York State snowmobile trail goes through our property. We are reaching out to groups from Rochester and Buffalo to join us at the Beeches for a three-day, snowmobile package. In addition, we are working with the new owners at the Snow Ridge Ski Resort in Turin to attract some of the downhill and cross-country skiers, tubers, and snowboarders to stay with us.”
The Destitos have also brought Jay Huggins in to beef up the marketing. Huggins, a native of Lee, Mass., came to Rome decades ago to work as the general manager of the local Friendly’s restaurant. He also managed Carmella’s Café in New Hartford before opening Teddy’s, a very popular, local, family restaurant, in Rome in 1990. Huggins sold Teddy’s in 2005, and joined The Savoy on E. Dominick Street in 2009 as the general manager, before moving to The Beeches nine months ago.
“Jay has some great ideas,” Destito enthuses. “This is the year of big changes, from retooling the menus to [instituting] efficiencies. Jay’s job is to generate more business, to be aggressive in marketing. This means using a variety of promotional … [techniques], including social media to get the word out.” (The Beeches currently has more than 1,750 Facebook followers and relies heavily on Pinterest for promoting weddings.)
“Orrie has already mentioned our growing catering business,” says Huggins. “One of the trends … [propelling] our growth is barn weddings. To many, a barn is a magical setting for a wedding. You may … [instinctively] think of cows, dirt, paper plates, and hay, but a number of couples think a barn is eco-friendly, [chic], and budget-friendly. Area residents have spent hundreds of thousands of dollars fixing up their barns to be attractive venues. It’s really a hot trend, and for us, it has been a real boost to our catering operation.”
Orrie Destito, a native of Rome, received his associate degree in mechanical-engineering technology from SUNY Canton and a B.S. in mechanical engineering from the University of Southern Colorado (now called Colorado State University–Pueblo). Wishing to obtain a masters degree, he instead returned home because his dad was ill. He joined the family business in 1978.
In additional to relying on its staff, The Beeches and The Savoy also utilize area professional services. “We have banked with NBT for years,” says Destito. “For legal services, we turn to the Getty Law Firm [in Rome] and Bond, Schoeneck & King [PLLC]. Our accounting is handled by D’Arcangelo [& Co., LLP].”
The Destitos are in their second century as restaurateurs. “We have seen the good times and the bad times, lifestyle changes, and the ups and down of the economy,” notes Orrie Destito.” But one thing hasn’t changed over the years — our customers’ loyalty. Our parents taught us to follow one basic lesson: Just take care of your customers and that path will lead to your success. But they taught us another lesson — the importance of family.” Every Sunday, the Destito clan gathers at the Savoy for brunch. “We often have 40 members of the family join together for Aunt Yolanda’s chicken cacciatore, Aunt Fannie’s fettucine, Uncle Pat’s zuppa di pesce, and Uncle Orrie’s baked ziti and sausage. It’s the glue that holds the family together.”
The Destitos’ story is an American story. They have lived the American dream here in the land of opportunity. It may not be long before the fourth generation joins the family tradition.
Contact Poltenson at npoltenson@cnybj.com
CNY unemployment rates decline, job growth mixed
Jobless rates continue to decline across Central New York, but the region’s job-growth picture remains mixed. Unemployment rates in the Syracuse, Binghamton, Utica–Rome, and Ithaca metro areas fell by an average of more than 1 percentage point when compared to a year ago, according to the latest New York State Department of Labor data released
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Jobless rates continue to decline across Central New York, but the region’s job-growth picture remains mixed.
Unemployment rates in the Syracuse, Binghamton, Utica–Rome, and Ithaca metro areas fell by an average of more than 1 percentage point when compared to a year ago, according to the latest New York State Department of Labor data released Jan. 28.
At the same time, the data indicates a net gain in total jobs in the Syracuse and Utica–Rome regions between late 2012 and late 2013, and year-over-year job losses in the Ithaca and Binghamton regions.
The jobless rate in the Syracuse area was 6.5 percent in December, down from 6.6 percent in November, and well below the 8.5 percent posted in December 2012. The rate in the Utica–Rome region was 6.8 percent in December, down from 6.9 percent in November, and sharply lower than the 8.9 percent of a year ago.
The unemployment rate in the Binghamton region was 6.9 percent in December, down from 7.1 percent in November and below the 8.8 percent posted a year prior, according to figures from the state Labor Department.
The jobless rate in the Ithaca area came in at 4.1 percent in December, down from 4.4 percent in November, and off from the 5.5 percent rate in December 2012, the state Labor Department said.
The data isn’t seasonally adjusted, meaning the figures don’t reflect seasonal influences such as holiday hires.
The New York counties with among the highest unemployment rates in December include Jefferson and Hamilton at 9.1 percent and Lewis at 8.9 percent. Bronx County had the state’s highest jobless rate in December at 10.6 percent.
At 4.1 percent, Tompkins County posted the lowest unemployment rate in New York during December, the state Labor Department said.
The unemployment rates are calculated following procedures prescribed by the U.S. Bureau of Labor Statistics, the department noted.
CNY regional data
The Syracuse metro area generated a net gain of 4,100 total jobs between December 2012 and this past December, an increase of 1.3 percent, according to the state data. The region picked up 3,900 private-sector jobs in the same period, a rise of 1.5 percent.
The Ithaca region lost 200 total jobs year-over-year, a decrease of 0.3 percent. Ithaca’s private-sector employers lost 300 jobs between December 2012 and December 2013, a decline of 0.5 percent.
In the Utica–Rome metro area, the state figures indicate a year-over-year net gain of 1,300 total jobs, or 1 percent. The region also gained 1,600 private-sector jobs, a 1.7 percent increase, in the same 12-month period.
The Binghamton area saw a year-over-year net decline of 1,000 total jobs, or a 0.9 percent decrease. In the same time period, the region’s private-sector job count remained unchanged between December 2012 and this past December.
The state’s private-sector job count is based on a payroll survey of 18,000 New York employers that the U.S. Department of Labor conducts, the state Labor Department said.
The federal government calculates New York’s unemployment rate partly based upon the results of a monthly telephone survey of 3,100 state households that the U.S. Bureau of Labor Statistics conducts.
Statewide unemployment
New York’s unemployment rate declined to 7.1 percent in December, from 7.4 percent in November, hitting its lowest level since January 2009.
That’s according to preliminary figures the New York State Department of Labor released Jan. 23.
The Empire State’s economy added 10,400 private-sector jobs in December, raising New York’s private-sector job count to more than 7.5 million, representing an “all-time high,” the department said in a news release.
The preliminary December unemployment rate of 7.1 percent for New York is down from the 8.2 percent rate in December 2012, according to the state Labor Department data.
In areas of the state outside of New York City, which includes all of upstate and Long Island, the unemployment rate fell to 6.3 percent in December, down from 7.8 percent in December 2012, according to the department’s data.
Educational and health services added the most jobs statewide, more than 52,000, over the last year. The trade, transportation, and utilities sector was the second biggest jobs producer, adding nearly 36,000 positions, according to the state Labor Department.
The leisure and hospitality sector was third on the list, adding more than 14,000 jobs. The professional and business-services sector followed, picking up more than 11,000 jobs.
The government sector led the way in job losses in December, declining by more than 13,000, in the last year, according to the state Labor Department.
Contact Reinhardt at ereinhardt@cnybj.com
Credit Union Classic is a truly global event
DeWITT — The 2014 Credit Union Classic, a Symetra (formerly Futures) Tour “Road to the LPGA” event, will attract 144 U.S. and international women golfers to Drumlins Country Club in DeWitt this summer. Organizers announced details on Jan. 10 at Drumlins. “You’ll see around the putting green … 35 different flags from different countries. It’s
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DeWITT — The 2014 Credit Union Classic, a Symetra (formerly Futures) Tour “Road to the LPGA” event, will attract 144 U.S. and international women golfers to Drumlins Country Club in DeWitt this summer.
Organizers announced details on Jan. 10 at Drumlins.
“You’ll see around the putting green … 35 different flags from different countries. It’s a worldwide tour,” Bill Motto, director of the Credit Union Classic, said in his remarks at the Jan. 10 announcement.
The golf tournament, scheduled for the week of July 28 through Aug. 3, has an annual economic impact of more than $350,000, Motto said.
The Credit Union Classic golf tournament, the third longest running event on the Symetra tour, is the largest professional sporting event in Syracuse, he added.
“Last year, we had 60 companies involved with the event in different aspects of the event, which is so important for us,” Motto said.
Syracuse–based Empower Federal Credit Union, Rochester–based Summit Federal Credit Union (FCU), and Albany–based SEFCU are partnering with Wegmans, a Rochester–based grocery store chain, as the presenting sponsors for the third consecutive year.
The Symetra Financial Corp., a financial-services firm headquartered in Bellevue, Wash., serves as the naming sponsor on the futures tour.
The tournament is scheduled a week later this year, Mike Vadala, Summit FCU president and tournament chairman, said in his remarks.
“That’s just to accommodate the entire schedule for the Northeast swing [of the futures tour], which traditionally has gone through New Hampshire, Albany, then over here to Syracuse before the girls finally get a week off,” Vadala said.
The participants, Vadala notes, are competing for status on the LPGA tour.
“It really makes this event special,” he adds.
About 100 of the golfers coming to Syracuse will stay with host families for the week of the tournament, Motto said. Organizers are looking for additional volunteers to host the golfers and will conduct a screening process for those interested, he added.
“There’s a need for that, and the people that have stepped forward, I think, have gotten a lot out of this event, too,” Motto said.
Calle Nielson, a 2011 graduate of the University of Virginia and a third-year pro on the Symetra Tour, called Syracuse one of her “favorite stops” on the tour.
Nielson spoke at the Jan. 10 announcement. She didn’t name the person she stays with during that week but says she has remained in touch with the individual.
“And that’s life on the tour. This tour is taking me to where I want to be, hopefully, one day,” Nielson said.
Participating in the Symetra Tour requires “a lot of traveling,” Catherine O’Donnell, a second-year pro on the tour, said in her remarks.
“It took me a while to get used to … You have to plan each week, and once I figured that out, it was good,” she said.
O’Donnell is a graduate of the University of North Carolina.
The organization The First Tee of Syracuse, which operates at Drumlins, is the Credit Union Classic’s primary beneficiary.
Founded in 2007, The First Tee aims “to impact the lives of young people by providing learning facilities and educational programs that promote character development and life-enhancing values through the game of golf,” according to the organization’s website.
The First Tee isn’t just a golf program and a golf camp, Peter Webber, executive director of First Tee of Syracuse, said in his remarks.
“We have 330 kids [between ages 7 and 17]. We’re about 60 percent minority. We’re also 40 percent girls,” Webber said.
The tournament has raised nearly $500,000 for charities since its inception, organizers said.
The 2013 Credit Union Classic was won by Olivia Jordan-Higgins of the United Kingdom.
Contact Reinhardt at ereinhardt@cnybj.com
Oneida Savings Bank: Diversification turns sleepy bank into community powerhouse
ONEIDA — One year after the Civil War ended, residents of Oneida established the Oneida Savings Bank (OSB). Chartered in New York state, the corporation was structured as a mutual savings bank, whereby the depositors were the bank’s owners. Serving clients in Oneida and Madison counties, OSB collected deposits, paid interest, and financed residential mortgages
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ONEIDA — One year after the Civil War ended, residents of Oneida established the Oneida Savings Bank (OSB). Chartered in New York state, the corporation was structured as a mutual savings bank, whereby the depositors were the bank’s owners.
Serving clients in Oneida and Madison counties, OSB collected deposits, paid interest, and financed residential mortgages for 113 years, when the banking world suddenly turned upside down.
Determined to wring rampant inflation out of the economy, then Federal Reserve chairman, Paul Volcker, slowed the rate of money supply. Between 1979 and 1981, he also raised the federal-funds rate from 11 percent to 20 percent. The prime interest rate hit 21.5 percent in June 1982. “The recession was a … [double-whammy],” says Eric E. (Rick) Stickels, the current president and COO of Oneida Savings Bank who joined the bank in 1982. “The industry was already grappling with deregulation, which was enacted in 1980. The recession of 1981, coupled with deregulation, forced 1,617 financial institutions, of which 747 were savings-and-loan associations, to close or seek FDIC assistance between 1980 and 1994.”
In July 1982, Congress enacted additional, deregulation legislation authorizing banks to offer money-market accounts, removed restrictions on real-estate lending, and relaxed the loans-to-one-borrower limits. Not surprisingly, there was a rapid expansion of real-estate lending, just at a time the real-estate market was collapsing. Where once the savings-and-loan banks represented a stable sector, it now faced competition from commercial banks as well as other S&Ls pressured to find additional income. Saddled with 30-year residential mortgages issued at low interest rates, some S&Ls rushed to finance high-risk developments such as casinos, fast-food franchises, ski resorts, junk bonds, arbitrage schemes, and a variety of derivative instruments.
“When I joined the bank in 1983,” says Michael R. Kallet, president and CEO of Oneida Financial Corp. (NASDAQ: ONFC), the stock-holding company for OSB, “we were still a sleepy, little bank. OSB had just offered checking accounts and adjustable-rate mortgages, but it was difficult to compete. There’s no doubt that the bank took its lumps in the 1980s and 1990s.” Kallet was appointed CEO of the bank in 1989, and Stickels assumed responsibility for operations and finance.
Growth strategy
During the 1990s, the team of Kallet and Stickels crafted a strategy to grow the bank and diversify its revenue streams. In 1998, they took step one by establishing a mutual-holding company, which, in turn, created a stock-savings bank subsidiary to hold all the assets and liabilities. The parent company owned a majority of the subsidiary and was authorized to sell shares in order to raise capital. “After 12 years of growth and success, we decided to take step two,” continues Kallet. “In 2010, we shed the mutual structure and created Oneida Financial Corp., a Maryland stock-holding corporation. Our second offering raised $31 million in new capital, of which we have deployed $5 million to date.”
“The funds raised since 1998 have been used largely for acquisitions,” notes Stickels. “We entered the insurance business in 2000 with the purchase of Bailey & Haskell Associates, Inc. Oneida Financial concluded its eighth insurance-agency acquisition in 2012, buying McMahon, Fenaroli, and White, Inc. (d/b/a Schenectady Insuring Agency or SIA). Our merger-and-acquisition activity [since demutualization] also included two banks — the State Bank of Chittenango and the National Bank of Vernon. In 2006, we acquired the Benefit Consulting Group, LLC. (BCG) located in [North] Syracuse. BCG, formed in 1983 as Retirement Income Services, focuses on 401(k)-plan analysis, design, and administration; personal financial services; business financial services; human-resources consulting; and health insurance and employee benefits. Altogether, the bank has invested nearly $36 million in acquisitions over the past 13 years.”
In 2008, Oneida Savings Bank created Workplace Health Solutions, a company specializing in offering employers access to networks of independent medical examiners in New York state. The goal is to partner with those providers who commit to timely appointments, give objective feedback on their diagnoses, and offer treatment recommendations to return injured workers to the workplace as quickly as medically appropriate. “Our growth is not confined just to acquisitions,” says Kallet. “We create companies where we see the need for a new product or service.”
Kallet stresses that the goal is not just to acquire and grow. “We need to find a good fit that will help us to leverage our assets and create synergies. The companies we target should be free to focus on selling, while our back office [of IT, marketing, and audit] supports their efforts. In the case of Bailey & Haskell and BCG, both were vendors to the bank, and we were comfortable that we could integrate the different cultures into the bank.”
The demutualization strategy has wrought significant changes at OSB. “When Mike and I joined the bank back in 1982-1983, we had 35 employees. Today, [Oneida Financial (OFC)] has 365,” says Stickels. “In 1982, the bank’s assets were $130 million. When we … [initiated] demutualization in 1998, our assets were $220 million. At the end of 2013, OSB posted more than $750 million in assets. OFC’s consolidated [annual] revenues [Dec. 31, 2013] were approximately $58 million and our income exceeded $6 million, with most of the growth coming from our non-banking subsidiaries. (Subsidiary income rose 13.6 percent in 2013.) OSB has expanded to 11 full-service offices, and our equity exceeds $90 million, all while remaining well capitalized. At the time of our secondary IPO in July 2010, shares sold for $8.” Today, Oneida Financial shares trade above $12 (the stock was trading at $12.35 as of late morning, Jan. 21.)
The next step
The day after the SIA deal closed on Dec. 31, 2012, Kallet and Stickels implemented the next step in the strategic plan: they created a new corporation — Oneida Wealth Management, Inc. “Our major concern is client services,” posits Donald J. Abernethy, Oneida Wealth’s president. “We needed to bring … a common vision … to all Oneida Financial companies offering wealth-management services: life insurance, wealth management, the broker-dealer functions, pensions, financial planning, and trust services. A perfect example of the benefits of this approach is our new, centralized [software] platform that integrates our pension, administration, and trust departments so that we can see all of our clients’ needs and respond. The name ‘Oneida Wealth’ also lets us create a single brand as we expand into new markets, such as Albany and Long Island.”
Abernethy continues, “[In short,] our mission is to implement what we call the Premier Advantage, a trade-marked name for providing a comprehensive portfolio of services to help our clients manage their personal and business needs while reducing their risk. The old model of utilizing multiple services and advisers is confusing and often costly because of overlapping expenses and gaps in coverage. With our new platform, all of our programs mesh seamlessly.”
Abernethy joined Retirement Income Services as a partner in 2003, following a stint at First Albany Securities. A 1994 graduate of Siena College, he holds multiple licenses and is a registered principal broker. Oneida Wealth Management also includes Chasity Jaynes, the company’s vice president and COO. Jaynes was the assistant vice president in charge of transition at Cadaret, Grant & Co., Inc. in Syracuse before joining BCG in 2005. She and Abernethy sit on the Oneida Wealth Management board of directors.
New location
The growth of Oneida Financial’s Syracuse–based insurance and financial services business has forced the company to seek new quarters. “We just announced that we are moving [our 110 employees] from the current North Syracuse [town of Clay] location to a building just two blocks from the Syracuse Inner Harbor,” says Kallet. (COR Development is currently planning to build a hotel, apartments, retail space, and other amenities in the Inner Harbor.) “By late 2014, we hope to occupy 28,000 square feet in the old Nabisco plant located at 706-716 N. Clinton St. Andy Breuer (Hueber-Breuer Construction Company, Inc.) and Josh Podkaminer (Emhoff Associates) are developing the former bakery into office space for medical and financial tenants.” Abernethy adds that the staff will initially occupy 20,000 feet, which provides room to grow.
Oneida Financial’s success has been built on a model that closely controls the process. “Ours is a more expensive model than other financial-services companies that outsource many of their functions,” asserts Kallet. “We like to keep as much in-house as we can. We’re convinced that we provide better service … This means a big investment in our technology. [For example,] we were the first bank north of metro New York [City] to offer online banking. As our mobile usage increased, we deployed new software in 2012 to keep up with the changing habits of our customers.”
Even with the investments in technology, it still comes down to the quality of the staff, according to Oneida Financial’s leader.
“Our ultimate success is based on our people,” Kallet opines. “[Oneida Financial] … has a team of long-term employees with talent. We nurture them and invest heavily in their education. We teach them that change is a constant, and they must be facile in responding to it.”
Oneida Financial’s success is also attributable to its management team which includes Kallet and Stickels; Pierre Morrisseau as the CEO and John F. Catanzarita as the COO of Bailey Haskell/BCG; Abernethy at Oneida Wealth Management; and Deresa Durkee as a senior vice president and CFO, and Russell Brewer as a senior vice president and chief lending officer at Oneida Savings Bank.
Kallet, 62, says Oneida Financial has already put a succession plan in place for the company and for all department heads. “Rick [Stickels] will succeed me, although we have not chosen a date. We have worked together as a team for 30 years, and he is intimately involved in our strategy and execution to diversify and grow.”
Kallet, who started in the 1970s with the Bank of New York, says “[t]here has never been a better time to be a community bank. The public understands and appreciates our role as the economic engine of development in small communities. We understand the communities we serve and their needs, and we believe strongly in supporting them.” Looking back on three decades of radical change in the banking industry, Kallet says “I have never been more optimistic of the future. To me, challenges make us better.”
Kallet, a 1972 graduate of St. Lawrence University and a music major who went on to study at the Berklee College of Music in Boston, has orchestrated a major change at what was once a sleepy bank and is now the community’s economic powerhouse. His approach seems to have avoided improvisation, even though he enjoys jazz, instead following a carefully crafted score that has made his stockholders, employees, and the Oneida community smile.
Contact Poltenson at npoltenson@cnybj.com
Solvay Bank plans new branch, technology for 2014
SOLVAY — Solvay Bank has big plans for 2014 that include a new “smart branch” in DeWitt and several new technology components that will improve the customer experience, bank officials say. The bank will soon decide on a construction firm for its DeWitt branch project and expects to break ground within the next month, says
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SOLVAY — Solvay Bank has big plans for 2014 that include a new “smart branch” in DeWitt and several new technology components that will improve the customer experience, bank officials say.
The bank will soon decide on a construction firm for its DeWitt branch project and expects to break ground within the next month, says Paul Mello, president and CEO of Solvay Bank.
He estimates it will take about four months to build the 2,400-square-foot branch at 6828 E. Genesee St. in DeWitt and another month to install equipment and prepare for a summer opening.
“Our goal is to increase our market share,” Mello says. “We do a lot of business in that market now,” he says of the DeWitt area.
Mello hopes the new branch will attract new customers as well as help the bank better serve existing customers in the area.
As a smart branch, the location will integrate new technology with the type of personalized service customer Solvay Bank’s customers expect, Mello contends.
Elements of the smart branch with its free-flowing floor plan include employees trained to perform a variety of job functions in order to improve efficiency as well as improved technology such as using tablets instead of desktop computers.
Other features of the new branch, which will employ five people, will include a conference room for loan closings, a community room, Wi-Fi, a “smart ATM” that makes check deposits immediately available, and a coffee bar. The bank will also provide commercial banking services and may add some other services such as insurance if demand warrants it, Mello says.
“It’ll have some traditional elements because people still want that,” he says of the DeWitt branch but will also be equipped for customers who prefer to use the latest technology.
Technology launches
Solvay Bank will launch two new apps later this year to benefit customers.
First to roll out in the spring is a remote check-capture app that will allow customers to snap a picture of checks and deposit them using the app on their smartphones. The app is a follow up to Solvay Bank’s 2013 launch of its mobile-banking app. That application was so well-received — the bank hit its one-year user goal within six months of launching — that interest in a remote check-capture app seems a given, Mello notes.
“There’s no need to go to the bank,” he says. “That’s the future of banking.”
Within the next month, Solvay Bank will unveil its redesigned online mortgage platform, which is easy to use and features online profiles and portals for each of the bank’s mortgage consultants.
Over the summer, Solvay Bank hopes to launch a mobile-banking app designed specifically for the iPad and other tablets with a system more tailored to those platforms, Mello says.
Finally, Solvay Bank is working on creating a virtual wallet along the lines of the PayPal and Google wallets that allows users to store information such their loyalty program cards and credit cards right on their phones.
“We think there is a huge potential down that road that this will replace your plastic cards,” Mello says. People want secure shopping transactions, he notes, but they also want easy transactions. The virtual wallet is a great tool to put all they need in one safe, secure location. “We think it has a lot of potential,” he says of the technology.
Mello declined to say how much Solvay Bank is investing in the new branch and technology, but says he expects all to combine and help yield another strong revenue year for the bank.
Solvay Bank generated record revenue of $22.3 million in 2013 and forecasts revenue of $23.4 million for this year. “We’re optimistic that 2014 will be a little better than 2013, and 2013 was a little better than 2012,” Mello says.
Between the new DeWitt branch and the new technology offerings, Solvay Bank customers will be able to do business with the bank with ease whether they prefer face-to-face interaction, over the phone, on their computers, or on their mobile devices, Mello contends. “We believe in choice,” he says.
Headquartered at 1537 Milton Ave., Solvay Bank (www.solvaybank.com) is a full-service commercial bank with eight branches located in Solvay, Fairmount, Camillus, Liverpool, North Syracuse, Cicero, downtown Syracuse, and Westvale. The company employs 158 people and reported total assets of $663.7 million as of Oct. 31, when it announced its third-quarter results. The company also operates Solvay Bank Insurance Agency, Inc.
The FDIC ranks Solvay Bank at seventh in deposit market share in the Syracuse metro area with more than $577 million in deposits, or 5.3 percent of the market’s total deposits, as of June 30, 2013.
Contact The Business Journal at news@cnybj.com
Bank economists see stronger economic growth in 2014
This year will be a breakout year for the U.S. economy as private-sector demand accelerates and fiscal drag eases, according to the Economic Advisory Committee of the American Bankers Association (ABA). The committee, which includes 13 chief economists from among the largest banks in North America, predicts inflation-adjusted GDP growth for 2014 will be 3.0
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This year will be a breakout year for the U.S. economy as private-sector demand accelerates and fiscal drag eases, according to the Economic Advisory Committee of the American Bankers Association (ABA).
The committee, which includes 13 chief economists from among the largest banks in North America, predicts inflation-adjusted GDP growth for 2014 will be 3.0 percent, compared to a 2.3 percent annual average since the Great Recession ended in mid-2009 and the post-recession high of 2.8 percent in 2010.
“This will be the strongest economic growth since the expansion began in 2009, and the committee’s strongest forecast since 2005,” Christopher Low, chairman of the group and chief economist of First Horizon National Corp’s FTN Financial, said in a news release. “We expect faster growth in business investment and stronger job creation as the economy improves.”
The bank economists believe the nation’s housing market will continue to grow in 2014 as wages increase and the unemployment rate continues to fall. The group foresees the housing sector gaining strength as home sales recover from depressed levels. The committee forecasts that home prices nationwide will rise solidly and that residential investment will increase 12.3 percent in 2014. The stronger housing sector will in turn, boost consumer spending.
“When families get into new homes, they spend more on appliances, furniture, electronics and building materials,” Low said.
Consumers are also finding themselves on stronger financial footing this year and have regained confidence, according to the ABA’s Economic Advisory Committee. The group believes consumer spending will support economic growth over the year ahead. Automobile sales are also expected to stay strong.
“Some consumers remain cautious due to lingering high unemployment and slow wage growth,” Low said in the news release. “Many have not benefited from the resurgent stock market and personal income growth, and are carefully watching what they spend. But, tax rates will rise much less in 2014, and household balance sheets are healthier than they have been in years. The consumer is the key; if people loosen up their wallets and pocketbooks, economic growth will be even stronger.”
As the recovery improves, the committee believes underlying drivers of economic growth will broaden beyond housing and consumption. Business spending and exports should also be stronger in 2014.
The Economic Advisory Committee believes national fiscal policy will exert less drag on consumers and businesses over the course of next year. The impending passage of a two-year budget agreement without big tax increases or spending cuts is a big change from 2013’s fiscal austerity, reducing economic uncertainty, according to the release. The group forecasts a federal deficit of $560 billion in fiscal year 2014 (down from $680 billion in fiscal year 2013) and below $500 billion in fiscal year 2015. The committee says that higher tax receipts from a stronger economy will account for most of the improvement.
“This year’s bipartisan budget deal will be extremely beneficial to the economy,” Low said in the release. “For the first time since 2009, businesses and consumers can plan with much less worry about disruptive policy battles.”
After slowing in December, job growth will accelerate from nearly 180,000 jobs per month last year to more than 200,000 jobs monthly in 2014, according to the bank economists’ forecast.
“Faster job growth will pull the unemployment rate down to 6.4 percent by the fourth quarter,” Low said. “The Federal Reserve will continue to monitor the job market and taper asset purchases accordingly. In the meantime, watch for investors to shift focus from the Federal Reserve’s asset purchases to its guidance on rate policy.”
The committee expects the Federal Reserve to maintain a very accommodative policy stance, keeping the federal funds rate extremely low.
The bank economists forecast that consumer credit growth will pick up this year, and that delinquencies will remain at low levels both this year and next. In 2014 and 2015, loans to individuals are expected to rise about 7 percent and loans to businesses will grow 8 percent.
The members of the 2014 ABA Economic Advisory Committee are:
· Committee Chairman Christopher Low, chief economist, First Horizon National Corp’s FTN Financial, New York;
· Scott A. Anderson, SVP and chief economist, Bank of the West, San Francisco, Calif.;
· Scott J. Brown, SVP and chief economist, Raymond James & Associates, Inc., St. Petersburg, Fla.;
· Robert A. Dye, SVP and chief economist, Comerica Bank, Dallas;
· Ethan S. Harris, co-head of global economics research, Bank of America Merrill Lynch, New York;
· Stuart G. Hoffman, chief economist, PNC Financial Services Group, Pittsburgh;
· Peter Hooper, managing director and chief economist, Deutsche Bank Securities Inc., New York;
· Nathaniel Karp, EVP and chief economist, BBVA Compass, Houston;
· Bruce C. Kasman, chief economist, JP Morgan Chase & Company, New York;
· Gregory L. Miller, SVP and chief economist, SunTrust Banks, Inc., Atlanta;
· George Mokrzan, SVP and director of economics, Huntington National Bank, Columbus, Ohio;
· Richard F. Moody, SVP and chief economist, Regions Financial Corporation, Birmingham, Ala.; and
· Carl R. Tannenbaum, SVP and chief economist, Northern Trust Corporation, Chicago
The American Bankers Association says it is the voice for the nation’s $14 trillion banking industry and its two million employees.
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