Bank Profile | By Linda Goodspeed
Nationally, small business lending is down almost 25 percent since the Great Recession, but don’t tell Kinderhook Bank that.
The small upstate New York bank has been growing its commercial loan portfolio at a double-digit annual clip for the last several years, including during the Great Recession.
“The great thing about the Capital Region is that the economy hasn’t seen big ebbs and flows like a lot of the national economy. It’s a stable economy,” said Lee R. Carman, senior vice president of commercial lending.
State government, nanotech, health care, higher education – it all adds up to a stable, growing economy that in turn feeds residential growth. The town of Kinderhook (population: 8,500), located 25 minutes southeast of Albany, is well-positioned to take advantage, and the town’s namesake bank is too.
Kinderhook Bank, the only bank headquartered in Columbia County, first opened for business in October 1853. In the 163 years since, it has grown from $125,000 in assets and 10 original investors to $433 million in assets and eight locations in Albany, Chatham, Delmar, East Greenbush, Greenport, Kinderhook, Latham and Valatie. The region is a highly competitive banking environment. But with its top-rated service and an opportunistic eye, Kinderhook has thrived.
In the first three months of 2016 Kinderhook reported record quarterly earnings and its highest-ever quarter-end balances in assets, net loans and deposits. “Phenomenal” loan growth has helped fuel the bank’s rise. Net loans were up 15 percent in the quarter, and 17 percent for all of fiscal year 2015.
“Our commercial lending has been growing 12 to 17 percent the last five to six years,” Carman said. “We’ve made a name for ourselves in the market. We’re competitive on every deal. We’re small but nimble. We’re also aggressive, going out and being a community bank with good service. We take the time to understand our customers and their businesses and what they need without increasing our risk.”
The bank’s commercial loan portfolio of about $325 million is powered largely with commercial real estate loans, but also includes a full range of other small business lending products. Loan size ranges from about $50,000 to $5 million.
More Growth Planned
Kinderhook’s current growth started in 2007, just when the national economy began to nosedive, when it opened its first branch outside of Columbia County in East Greenbush. As other banks pulled back on lending, Kinderhook stepped in to fill the vacuum. In 2010, it opened a branch in Delmar, its first foray into Albany County.
In 2013, as part of a succession plan to replace longtime President and CEO Robert A. Sherwood, Kinderhook named John A. Balli its CEO. (Balli was named president in December 2015.) One of Balli’s first moves was to recruit Jeff Stone, former Albany market president for Key Bank, with a mandate to grow Kinderhook’s Albany presence. The bank opened a branch in downtown Albany in 2014, and another one in Latham in April 2015.
“It’s all about relationships,” said Stone, senior vice president of retail and business development. “Hiring the right people, developing the right relationships. We’ve got a niche and can deliver in ways bigger banks can’t. We have a little more flexibility because of our size. We can get it done.”
Stone said the bank is continuing its expansion plans, focusing on increasing its branch network, growing deposits and C&I lending, as well as its retail portfolio.
“We’re developing new small business products,” he said. “We want to be the go-to bank for small businesses. It’s an area of growth, along with residential mortgages and the home equity side.”
Stone said Kinderhook is also positioning itself to take advantage of the upcoming market disruption in the Capital Region when Key Bank completes its acquisition of First Niagara.
“They are going to close 30 branches in October, and more in 2017,” he noted. “We’re interested in finding a couple of those branch locations to complement our strategy of growth. We want to be aggressive in acquiring those customers. It’s a focus of attention for us as we go through the balance of 2016.”
Another focus is community involvement.
“We have very traditional values and a longtime legacy of giving back to the community,” Stone said. “We’re very involved in the community. We support local organizations, both financially and with volunteers. It’s part of our history, and as we go forward, will probably expand.”
Technology is another expanding focus. The bank has full-function ATMs that take deposits and dispense cash in multiple denominations. It uses the universal branch model with all people doing all things, and has a strong mobile platform that will roll out a remote capture function later this year.
“We’re traditional in some ways and cutting edge in others,” Stone said. “It’s very exciting to be part of a small bank in growth mode.”■