We sat down with Bridgehampton National Bank CEO, Kevin O’Connor, the bank’s chief retail banking officer, James Manseau, and chief lending officer, Kevin Santacroce, last week to talk about the state of the economy, the health of the bank and prospects for this coming year.
Q: 2011 was a good year for BNB. Why is that?
KO: We’re building infrastructure within the organization. There’s been a steady growth in deposits, loans and capital. We’re seeing 20 to 21 percent loan growth, a lot of commercial loans, loans in every category. There’s been a 50 percent increase in commercial real estate loans, 20 to 25 percent in residential, 15 to 20 percent in business financing, a lot of owner-occupied construction.
KS: We try to loan where there’s a lot of equity, where it’s less speculative. There are over 1,000 properties on the South Fork in foreclosure, mostly those spec houses in the $1 million to $5 million range. We’re involved in the Highlands subdivision by Northville Turnpike. We’re seeing a consistent sale of homes there. We’re also financing the Summerwind 48-unit housing complex in downtown Riverhead.
Q: How do the changes in banking regulations since the economic meltdown affect BNB?
KO: The soon-to-be promulgated Dodd/Frank regulations are expensive to deal with. We struggle with that. We have seven people in our compliance division. It’s a very senior area of our corporation.
KS: I would like to see more regulation in the mortgage business.
Q: How would you rate the financial health of the business community?
KO: People here weathered a difficult storm, but they’re better business people for it, and they have less competition than they ever did. I’m looking at peoples’ financial statements and they’re looking better.
KS: There’s more liquidity. People have eliminated inefficiencies. They understand their businesses better than ever. They’ve paid down their debt. Now will they expand? That’s the million dollar question.
JM: Some of the best loan decisions are “no.” People will thank us later for not letting them get in over their heads.
Q: How is the bank looking to expand?
KO: The North Fork’s a big part of what we do. We’re talking about a branch on Shelter Island.
KS: We’re not just going west. We have a brand new facility in East Hampton.
JM: Greenport had our largest growth in 2011. The branch manager, Emily Healy, knows everyone in town.
KO: We’re a product of our customers’ success.
KS: At bigger banks, there’s a disconnect with the decision makers. Comparing us to, say, HSBC, is like comparing your local hardware store to Home Depot.