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Provident Bank: Focus on Risk Management

By Linda Goodspeed

In the Depression of the 1930s, Provident Bank was the only bank in the Hudson Valley region that did not have to close its doors. Today, in another era of turmoil for the banking industry, Provident Bank is once again a bastion of strength and stability. In fact, it’s growing.
For the fiscal year ending September 30, 2008, Provident reported net income of $23.8 million, or [Article].61 per share, compared to $19.6 million, or [Article].48 per share, in fiscal 2007.
“We are very proud of our heritage,” said Steve Dormer, executive vice president of strategic planning and commercial lending at Provident. “Embedded in that heritage are two guiding principles. One: we will always be there for our customers, and Two: we’re able to be there for our customers because we manage our business prudently. Risk taking is part of any business. We focus on risk management.”
That two-pronged philosophy of risk management and customer service has made Provident Bank the only remaining independent community banking institution in the Hudson Valley. Founded in 1888, Provident has $2.8 billion in assets, 600 employees and 33 branches in Rockland, Orange, Ulster, Sullivan, Putnam, Westchester and Bergen Counties.
Provident eschewed the subprime mortgage market. But it has been a relentless promoter of small businesses, and today is the area’s largest small business lender, making it both a target and suitor for other banks.
“We are committed to staying independent,” Dormer said, adding that Provident is actively looking for opportunities of its own. Over the years, growth has come in part through a series of strategic mergers and acquisitions, including Orangetown Savings and Loan Association of Sparkill, First Federal Savings of Suffern, National Bank of Florida, The Ellenville National Bank and Warwick Community Bancorp, Inc.
“We see the current climate as a tremendous opportunity for us,” Dormer said. “But you can’t predict when these opportunities might present themselves. Any acquisition always has to be the right fit – the right strategy, the right geographic area. You can’t make it happen. But we are certainly keeping our mind and eyes open.”
Besides conservative lending and risk management practices, Provident has distinguished itself through its service. It was first in the region to offer both Saturday and Sunday banking hours, and the first to open a supermarket branch. Today, it offers a full range of in-house, telephone and Internet banking, remote deposits for businesses and other products and services. Its Provident Bank Charitable Foundation has returned thousands of dollars and hundreds of employee hours back into the community.
“I think service is easier said than done,” Dormer admitted. “We’re battle trained. We’ve had to distinguish ourselves through service to the point where it’s become second nature to us. We have a relentless focus on our customers. If we change something, we always ask, ‘How will it affect the customer’? On the front end, are tellers smiling at customers? Do we answer the phone promptly? Do our brochures make sense? We have training programs on customer service. We measure it constantly. It is a big commitment.”
That commitment starts at the top. Provident’s president and CEO George Strayton has led the bank since 1982. Many other top and mid level employees also have long tenures, giving the bank deep and entwined roots in the community.
“Risk management is all about having the right people,” Dormer said. “We’ve had a lot of stability at the bank, a good mix of home grown people and talent brought in.”
“George Strayton is one of the best business leaders in the county,” added Ken Mahoney, president of Mahoney Asset Management in Chestnut Ridge and publisher of the Rockland Business Digest. “He is a very big part of the business community; very focused, very organized, very goal oriented. Most important, he’s a visionary. He puts out the big picture of what he would like the bank to be and then empowers those around him to execute that vision.”
Dormer says that while he expects the number of traditional banks will continue to shrink, the vast array of financial, investment and lending alternatives will continue to expand. Where does Provident Bank fit? “I think there will always be a place for community banks,” Dormer said. “They may look a little different than they do now, with different types of products and services. But I think there will always be a desire among businesses and consumers to deal with somebody local, somebody face-to-face, who they know and who knows them.” 

Linda Goodspeed is a freelance writer based in Vermont.

Posted on Monday, January 19, 2009 (Archive on Sunday, April 19, 2009)
Posted by Scott  Contributed by Scott


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