Friday, December 23, 2011

In a New York Village, the Bank Around the Corner -

In a New York Village, the Bank Around the Corner -

"This has not exactly been a time of great love for bankers. From the continuing foreclosure crisis to Occupy Wall Street’s campaign against “the 1 percent,” it is easy to forget that not all banks are complicated giants, trading in derivatives and re-hypothecating valueless collateral. The Bank of Cattaraugus, for example, is by asset size the state’s smallest bank (one branch, eight employees, no credit default swaps) and yet it plays an outsize role in this hilly village an hour south of Buffalo: housing its deposits, lending to its neediest inhabitants and recently forbearing on a mortgage when the borrower, a bus mechanic, temporarily lost his job after shooting off his finger while holstering his gun.

If it sounds old-fashioned, it is: It’s not the kind of bank you’ll find anymore in New York City, where multiple branches and capitalizations counted in 10 figures are the norm. With $12 million in total assets, the Bank of Cattaraugus is a microbank, well below the $10 billion threshold that defines small banks. It exists in a seemingly different universe from the mammoth money-center banks-turned-financial-services-conglomerates, like Citigroup ($1.9 trillion in assets) or JPMorgan Chase ($2.25 trillion).

With obvious exceptions, business at the Bank of Cattaraugus hasn’t changed much since 1882, when 20 prominent residents — among them a Civil War surgeon and a cousin of Davy Crockett — established the bank to safeguard townsfolk’s money and to finance local commerce.

In its 120-year history, the bank has rarely booked a profit for itself in excess of $50,000 (last year, Mr. Cullen said, it made $5,000.) He and his officers are industry anomalies: bankers who avoid high-risk and high-growth tactics in order to reinvest the bulk of their earnings in their community’s economy."

This bank is run by the Cullens, a family who has sent many through SBU and I had two of them as students (Tom and Tim). Great people! (also active in BonaResponds!)

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