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Adirondack Bank: The same mission since its founding
UTICA— On Halloween of 1898, while many Saranac Lake residents thought of ghosts and goblins, some were busy incorporating the Saranac Lake Cooperative Savings & Loan Association. The S&L’s charter was premised on providing banking services to the area based on integrity, frugality, and community involvement. While the nation has experienced many changes in the […]
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UTICA— On Halloween of 1898, while many Saranac Lake residents thought of ghosts and goblins, some were busy incorporating the Saranac Lake Cooperative Savings & Loan Association.
The S&L’s charter was premised on providing banking services to the area based on integrity, frugality, and community involvement. While the nation has experienced many changes in the past 114-plus years, the original mission is unchanged even though the bank has undergone name changes — today it’s called Adirondack Bank –— and changes in corporate status.
“Change is good,” says Gary Walter Kavney, Adirondack Bank’s president and CEO. “I like a changing landscape, because it provides opportunities [for growth].” With all of the merger-and-acquisition activity in the area disrupting people’s banking relationships, Kavney sees “… the potential to attract new clients and to generate more business.” He also has hired talented bankers available due to mergers and acquisitions, thus improving the quality and capabilities of his staff.
In 1936, the co-operative changed its name to Saranac Lake Federal Savings & Loan Association. Saranac Lake Federal ran into financial trouble during the savings-and-loan crisis of the late 1980s and was recapitalized in 1990 as a stock corporation, owned by one individual — Harold T. (Tom) Clark, Jr., who is chairman of the corporation. In 1995, Clark re-chartered the bank as a community bank and changed the name to Adirondack Bank N.A. At the time Clark moved the headquarters from Saranac Lake to 185 Genesee St. in Utica, he converted the bank in December 2003 from a federal to a state charter. Adirondack Bank is privately held by 30 stockholders with the Clark Family Trust holding a majority of the shares.
Kavney assumed the role as president and CEO of Adirondack Bank in 1998 after a three-decade stint with First Trust & Deposit Co., which was later acquired by KeyBank. He started at KeyBank as a teller, posting records in pen and reviewing checks by hand. When he left KeyBank after working in a number of upstate cities, Kavney was the senior vice-president of private banking and wealth management with responsibility for Key Trust Co. Clark was a client of KeyBank and, over time, “…convinced me to make the move,” says Kavney. “I had the opportunity to shape the direction of [Adirondack Bank] … with an entrepreneur [Clark] who never sees any barriers [that can’t be overcome] … I took the challenge.”
Since his arrival 15 years ago, Adirondack Bank has generated steady growth. The assets have grown from $130 million to more than $600 million at the close of 2012. From its current 17 locations in the North Country, the Mohawk Valley, and Central New York, the bank, which employs 165, annually generates $25 million in gross revenue and nets more than $4 million. Under Kavney’s watch, Adirondack Bank has also diversified, creating in 2009 the subsidiary Adirondack Insurance Services, which offers life- and property-and-casualty insurance products to the bank’s clientele. The bank also has an affiliate — Adirondack Financial Services Corp. — which is wholly owned by Clark and headed by William F. Locke. Locke sits on the bank’s board, and the financial-services office is located in the bank’s headquarters building in Utica.
“This growth has been achieved while guaranteeing [financial] safety and soundness in our operations … The bank operates well above its regulatory capital requirements,” says Kavney as he proudly points to the most recent Bauer Financial report, which has given Adirondack Bank an “excellent” rating for 24 consecutive quarters. Bauer evaluates an institution’s capital level, profitability, reserves, asset quality, regulatory compliance, and many other factors. Financial safety and soundness are critical to the bank’s mission, but it is not the only focus. “Adirondack Bank prides itself on giving back to the community by donating a significant amount of its net income to community events and charitable organizations as well as donating thousands of hours of staff time to civic groups, youth organizations, and senior citizens,” adds Kavney.
The business community is never far from Kavney’s mind. “For the last four years, Adirondack Bank has been the number-one SBA lender in Central New York,” says the banks CEO, pointing proudly at the plaques in the bank’s boardroom. The bank loaned $1.1 million to small businesses in the 12-month period closing Sept. 30, 2012.
Kavney, 67, also is focusing on managing succession at the bank, creating mobile-banking applications, and developing long-term relationships in the community. “We don’t serve customers,” says Kavney, “we serve clients. Customers are transaction oriented; clients are relationship oriented.”
Kavney’s goal is to implement Clark’s vision of growing the bank to $1 billion in assets, remaining independent, and increasing the profits. He recognizes the challenges of the regional economy which grows slowly, a requirement to invest heavily in technology, and a regulatory burden that places increasing costs on the bank’s operations. “Loan quality used to be the most important concern in banking. While it is still a major component of banking operations, IT and compliance have now risen to the forefront,” says Kavney. “IT has five to seven people and compliance has [another] seven. Compliance alone now costs the bank $500,000 a year.”
Despite the obstacles, Kavney is optimistic. “The bank isn’t trying to attract shareholders [like a public company]. We have a long-term focus to grow the bank carefully and responsibly without [distorting] our balance sheet,” says Kavney. Nor is he concerned by the merger-and-acquisition activity of competitors. “We prefer to grow organically by listening to our clients, continually looking for opportunities, and thinking out of the box,” he adds.
“Much has changed at the bank since it was incorporated, but not the mission,” says Kavney. “[More than a century later], we still provide banking services based on integrity, community involvement, and a word not heard very often today — frugality.”
Kavney and his wife Judy live in New Hartford. They have four daughters and a son plus 12 grandchildren, who all live in Upstate. Kavney’s son is the regional president of Central New York for First Niagara Bank, and one of his daughters manages the Adirondack Bank branch office in downtown Syracuse.
Contact Poltenson at npoltenson@tmvbj.com
Burrows Paper expands international reach
LITTLE FALLS — “On Dec. 3, 2012, Burrows Paper Corp. completed the acquisition of the remaining 75 percent equity interest in a joint-venture it had established with Innopak Hong Kong, Ltd. in 2008. The deal transferred total ownership of Innopak Heshan — an operating company that converts specialty paper and board-based, foodservice packaging products —
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LITTLE FALLS — “On Dec. 3, 2012, Burrows Paper Corp. completed the acquisition of the remaining 75 percent equity interest in a joint-venture it had established with Innopak Hong Kong, Ltd. in 2008. The deal transferred total ownership of Innopak Heshan — an operating company that converts specialty paper and board-based, foodservice packaging products — to Burrows,” says Rose Mihaly, Burrows’ chief operating officer (COO).
The converting company is located in Longkou, Heshan, Guangdong China. “Bill Burrows [the third-generation CEO] knows everybody in the industry,” adds Mihaly. “Following the joint-venture, Burrows set up a representative office in Shanghai. [The holding company agreement] allowed either party to buy out the other … Setting up a packaging operation was part of the strategic plan.” The move expands Burrows’ international reach by offering Asian customers products such as specialized hand-carry bags, grease-resistant wraps, and color-printed clamshells for a variety of food items.
“Burrows Paper Corp. is a worldwide supplier of light-weight, specialty-paper products, controlling 10 percent of the world market,” says the company’s COO. With headquarters in Little Falls, the company owns five paper machines located in Little Falls, Lyons Falls, and Pickens, Miss.
Burrows serves the food, industrial, consumer, and medical markets with a variety of products including fruit wraps; lamination paper; candy wraps; filtration paper; paper for medical packaging, hospital gowns, specialty wipes, doctors’ examination tables; battery tissue; and sewing-pattern tissue. Burrows Corp. has developed unique paper-performance attributes, in part by sourcing its pulp worldwide, and has the capability of producing relatively short runs. About 10 percent of Burrows’ paper production is shipped offshore and about 33 percent is consumed by Burrows’ own packaging plants. To ensure continuous operation, the company has not only established a number of mills, but also has rebuilt some of its machines with duplicative capacity to guarantee an uninterrupted supply.
The packaging facilities are located in Reno, Nevada; Fort Madison, Iowa; Franklin, Ohio, Kerkrade, Netherlands; and Guangdong, China. Burrows offers takeout-containers and wraps for the quick-service food industry to ensure that the food is fresh, appetizing, and hot. “Our products balance moisture, resist grease, and retain heat while serving as an eco-friendly alternative to polystyrene products. We have followed the quick-service restaurant growth throughout the U.S. and Europe,” says Mihaly. “Our customers include the major chains like McDonald’s, Burger King, and Subway, as well as bakeries, cafés, and supermarkets … We’re [focused] on penetrating the converting (packaging) market … We offer our clients a complete service from the manufacture of the paper to a superior presentation” including design, 8-color custom-printing capability, die-cutting, and coating options.
Burrows currently employs 888 worldwide, with 236 employed in Central New York. The company now generates about $250 million in annual sales. Twelve employees are dedicated to the research and development office. “Fifty percent of the revenue comes from our papermaking operations and the other 50 percent from packaging,” says Burrows’ COO … Papermaking accounts for one-third of the company’s employment with packaging comprising two-thirds.”
Burrows is focused on growth. According to Mihaly, “… the company is looking ahead six years to its 100th anniversary with a goal of doubling in volume to $500 million. Our growth will come both from our paper-making production and from our converting operations, mostly in food-service … We will grow organically as well as through acquisitions … Our strategy calls for being a global leader in supplying industrial, medical, decorative, and flexible packaging.”
Burrows competes with large, international corporations like International Paper, Georgia-Pacific, Domtar, and Huhtamaki.
Paper-making in Little Falls dates back to 1831. In 1913, Charles Burrows became manager of the Hoffman Paper Co., which was in legal reorganization. His brother Andrew joined him as treasurer and in 1919, the two established the Burrows Paper Corporation. Upon Andrew Burrows’ death, his son Ralph William Burrows succeeded him as president.
Ralph William (Bill) Burrows, Jr. is the current president, CEO, and chairman. No member of the fourth generation has joined the firm. The corporate stock is closely held with the family as the majority stockholder.
Burrows Paper works with Bank of America for its capital investments, the international law firm of Baker & McKenzie for legal services, and Dannible & McKee, CPAs for accounting services.
Contact Poltenson at npoltenson@tmvbj.com
BHL expands in Capital District with Schenectady agency acquisition
ONEIDA — The recently closed acquisition of an insurance agency in Schenectady gives Oneida Financial Corp.’s insurance unit a stronger foothold in the greater Albany market. McMahon, Fenaroli and White, which does business as Schenectady Insuring Agency (SIA), was merged into Bailey, Haskell & LaLonde (BHL), a subsidiary of Oneida Financial (NASDAQ: ONFC), on Dec.
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ONEIDA — The recently closed acquisition of an insurance agency in Schenectady gives Oneida Financial Corp.’s insurance unit a stronger foothold in the greater Albany market.
McMahon, Fenaroli and White, which does business as Schenectady Insuring Agency (SIA), was merged into Bailey, Haskell & LaLonde (BHL), a subsidiary of Oneida Financial (NASDAQ: ONFC), on Dec. 31. Financial terms were not disclosed.
All 12 SIA employees came aboard and continue to operate from the agency’s leased office at 155 Erie Blvd. in Schenectady, says John E. Haskell, CEO of Bailey & Haskell Associates, Inc., which does business as BHL.
Haskell explains in an interview that the acquisition of 100-year-old SIA made strategic sense for a number of reasons.
First, BHL had already been writing policies in the Capital District. In fact, BHL’s director of risk-management services, Paul Coderre, lives in the region.
“We do business in that area, but this is our first brick and mortar location we’ve had there,” says Haskell.
Getting an office in Schenectady also makes geographic sense for BHL. “It’s in between Long Island and Central New York. It’s kind of a natural for us,” Haskell says, noting that BHL has one office on Long Island and five locations in Central New York.
Specifically, BHL has offices in Oneida (headquarters), North Syracuse, Cazenovia, Chittenango, New Hartford, and Malverne (Long Island). It also has a location near Buffalo as well as one in South Carolina, just outside Charlotte, N.C.
The agency has consistently pursued acquisitions to grow over the last decade. “We’ve probably done 6, 7, 8 [insurance agency] acquisitions in the last 10 years in an around upstate New York,” says Haskell.
When deciding which acquisitions to pursue, Oneida Financial and BHL have focused on identifying agencies with highly qualified people in new or adjacent markets.
“We’re looking to acquire talented, quality people. We’re looking for certain geographic and market segments where we can expand our business, and where it makes sense,” Haskell says.
He adds that SIA fits the bill because, “they’re an agency that’s been around a long time. They’re very talented people, well known in the area. We’re looking forward to have them working for us.”
When asked if BHL might pursue additional acquisitions in the Albany market in the future, Haskell says, “We’re always looking…”
BHL generates between $150 million and $200 million in annual insurance-premium sales, according to Haskell. The agency offers personal, property and casualty, business, and cyber liability insurance, and a host of other products and services.
BHL now has about 160 employees total, including Benefit Consulting Group (BCG), another Oneida Financial subsidiary that provides employee-benefits consulting and retirement-plan administration services. Together, the two units have been a strong driver of sales growth at the parent company in recent quarters and years. Through the first nine months of 2012, Oneida Financial’s commissions and fees on sales of non-banking products increased nearly 12 percent to almost $4.8 million from nearly $4.3 million in the year-earlier period.
Oneida Financial reported total assets of $677 million as of Sept. 30. It’s the holding company for Oneida Savings Bank, State Bank of Chittenango, BHL, BCG, and Workplace Health Solutions, a risk-management firm specializing in workplace-injury claims management.
Contact Rombel at arombel@cnybj.com
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Stay up-to-date on the companies, people and issues that impact businesses in Syracuse, Central New York and beyond.