by Alexis Ann
Dime Bank’s Nick Caplanson, who has just celebrated his first full year as the 13th President and CEO of the $700 million, 11-branch bank in Eastern Connecticut and Rhode Island, acknowledges that times are tough, and that this region may be too dependent on just a few big employers. But, he maintains, “community banks remain connected and competitive.”
The Resident invited Nick’s opinions on “Banking on Main Street” which affect not only his 143-year-old institution, but the families and businesses large and small in our area.
He is off to a good start, and was recently named a “Community Bank Hero” by the prestigious journal, The Commercial Record. Further, Dime Bank on September 21 was named one of the Top Workplaces in Connecticut—one of the top four of 600 examined by a survey sponsored by the Hartford Courant and FOX CT. And Cheryl Calderado, Dime Senior Vice President, was named in August as the Commercial Record’s 2012 “Women of FIRE” award winner in the finance, insurance, and real estate sector. Accolades, indeed.
Here’s what Nick has to say:
Alexis: What have you done administratively to help meet the current downturn?
Nick Caplanson: “We wanted to broaden the range of opinions we get from our senior people in all areas of our bank operations. We now have about 16 or 17 people on our management committee–operations, lending, retail banking, investments, etc., who can talk not only about strategic things but bank-wide initiatives. It’s been extremely helpful.
Alexis: The biggest banks have been hard hit lately. Is there a “golden age” of smaller banking taking their place?
Nick: There’s no question that there’s a movement away from larger institutions and Wall Street-based firms back to the community-based organizations who know their customers and who know their communities. Though smaller, you don’t have to sacrifice service, and we service the needs of the majority of people pretty well. There’s no question that community banks can stay connected and competitive.
Alexis: What about Credit Unions?
Nick: Community banks can remain competitive with Credit Unions despite their tax advantage. From the service standpoint we can compete, and I’m not pessimistic about them; there’s room for everybody.
Alexis: The mortgage crisis is real. But who is going to assume the risks inherent in mortgages. The government? Fannie Mae?
Nick: It’s incredibly complicated. It’s a very low-earning asset class, so the best bet is to sell them to Fannie Mae, have us collect payments and service the loans, keep the service here, and transfer the interest risk to them.
Alexis: What do you think of Wall Street-style trading in loans?
Nick: No, we do not buy and sell investments every day to create income. We’re more conservative. It’s not in our business model, and we want to keep to a relatively simple business model.
Alexis: What about the government covering home or business foreclosures?
Nick: There are a lot of government programs, but most are to help business out. I think a conscious effort should be made to keep people in their houses. At Dime Bank we do structured-payment plans and work-outs; doing what’s best for customers is ultimately what’s best for us. We want to keep ‘a light at the end of the tunnel’ for our customers.
Alexis: What’s the bank’s focus for next year?
Nick: We have three: customer, employees, community. Ultimately we have to keep that balance: one helps the other helps the other. If it’s any single one…forget it! There must be reciprocity.
Alexis: What are the challenges that you face?
Nick: The biggest challenge is the regulatory climate. It’s not good for banks, and it’s never been more difficult than now. The regulatory response to the 2008 collapse has been unbelievably labor-intensive and expensive whether you have $50 million or $500 million in assets, so it hits smaller institutions hardest. Government is not helping in a lot of ways, and it’s unfortunate to say that right now. Yes, we need regulations, but not those that stand in the way of service. It’s very, very costly and the costs have never been higher.
Alexis: Are we becoming like the U.K., losing a middle class?
Nick: It is unbelievable. It seems like the middle class is getting squeezed out. The income tax structure needs to be revised, and there need to be decent-paying jobs for the middle class. We need to be really more focused on job creation.
Alexis: What about our own, local region?
Nick: I’m not trying to be an optimist or a pessimist, but to be realistic: there are certainly some highlights and some good economic things going on in selected pockets, but we are very dependent on some key, large employers. There’s good news from tourism, but it’s not enough. We need diversity. ‘Cautious’ is the best word for now, out there.
Alexis: And the bank itself?
Nick: So far 2012 has been a robust year for us. We have a great team here that can reach out to, for one example, the medical profession. Real estate, equipment purchases, are helping the medical area grow for us. Likewise, we recently plugged in to a few municipalities, helping them save on bonding costs. But there is not a lot of real-estate developing—people are not out there buying homes yet.
All in all, it’s certainly challenging, more than it’s ever been, but I think that if institutions can execute well it truly makes a difference. Just last week a customer walked in and said, ‘I just got great service from so-and-so!’and goes on to tell a great story. As president and CEO it’s the greatest thing that you can hear. As far as executing well, it’s a great time. And it’s fun!
by Alexis Ann