April 17, 2009 Issue
The Most Powerful Name In Corporate News and Information
CMS Bancorp, parent of Community Mutual Savings Bank, Is Focused On Being A Customer Oriented Bank, Building Shareholder Value, And Conservatively Increasing Loans And Deposits Through The Community They Serve In The Westchester, New York Area
Community Mutual Savings Bank was founded as a Mutual Savings Institution in 1887 and originally operated out of a single branch location in Mt. Vernon, NY. Since its founding, Community Mutual has expanded its branch banking network to include three additional retail offices located in Eastchester, West Harrison and Greenbugh, NY. In the spring of 2009, a new branch will be added in Mount Kisco, New York. The bank's Corporate Administrative Offices are located at 123 Main Street, White Plains, New York.
John E. Ritacco
Mr. Ritacco has had a longstanding career in the banking industry bringing over 30 years of banking accomplishments to his role as President and Chief Executive Officer of Community Mutual Savings Bank.
Mr. Dowd has over 30 years of
financial management expertise that he brings to Community Mutual, most
recently as Chief Financial Officer of Leveraged Technology Inc. in New
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – April 17, 2009
Will you tell us about the area that you service and how they are faring in
the current economy?
CEOCFO: How do you break down between consumer and business and would you like to see the mix change?
Mr. Ritacco: “We went public in April of 2007, but we have historically been a mutual savings bank. In addition, our business has historically been one to four family residential mortgages, which we have continued for the last several years. However, we have been in the transition to change the mix to a more balanced mix of commercial real estate and other conservative lending.”
your strategy and focus changed in the last few months?
CEOCFO: What is the competitive landscape like and why are people choosing Community Mutual?
“We are local, our decision-making capabilities are local. We believe in
delivering a high-quality service, and our technology platform is what we
believe to be fairly good and state-of-the-art. We can deliver much of what
the larger institutions can deliver except we deliver it in a more
community-oriented friendly, user-friendly manner. The Westchester landscape
has historically been made up of many community banks along with the big
banks. Over the last several years many of those good, strong, solid
community banks have been bought up by other institutions. Hudson City,
Bank, Sleepy Hollow National Bank, Union State Bank and City and Suburban,
among others have all been acquired by larger banks. There are a number of
really good community banks that have been bought up and really left for us
an opportunity within our marketplace that hasn’t existed for a very long
do you take advantage of consolidation and get new business?
Beyond experience, what are the intangibles you look for in the people you
CEOCFO: What might someone experience that is outside of the norm in terms of customer service at CMS?
Mr. Ritacco: “We cater to our senior citizens. We have attended March of Dimes walks; we attended a West Harrison Columbus Day parade. We support the community, we give not only donations, but our people are out there in the community making sure that the customers in those communities really understand how important they are to us in their respective communities.”
Mr. Dowd: “It is not unusual for one of our branch managers to help out a senior citizen by going to their house to help them take care of some sort of a banking issue. It is not unusual for one of our loan officers to stop by one of our business accounts to help them out with some issues like filling out mortgage applications or anything that would make their life easier”
you find that many of your customers take advantage of a variety of
CEOCFO: Do you find a lot of your customers are coming to you for advice and reassurance these days?
Mr. Ritacco: “Yes, in particular since the financial crisis of September, more and more people are concerned about FDIC insurance than ever before. More people are enquiring on the stability and the strength of the bank to the best that they can glean from financial information. They really look for the branch manager’s comfort by seeing them on a regular basis, knowing that they can be assured that the bank is in good shape and they have to trust that the individual branch manager that gives them a level of security and comfort.”
CEOCFO: What is the financial picture for the bank?
Mr. Dowd: “In terms of the financial picture, all of our capital ratios are very strong. As of September 30th the minimum ratio that you need to have in what is called the total risk-based capital ratio is a 10% ratio to be considered well capitalized. We were at 14.28%, well above the well capitalized level. There are some other ratios, one called the tier-one ratio where the minimum to be well capitalized is 6%, and we were at 13.8%. Another ratio that the regulators look at is called the leverage ratio, where to be defined as well-capitalized you need 5% and we were at 7.23 %. When you factor in the additional capital available at the holding company level, the ratios are even stronger. We do have a very strong capital position that will let us grow the bank over the next couple of years.”
CEOCFO: Why your decision not to accept TARP funding?
Mr. Dowd: “With regard to our decision on the TARP funding, to just give you a little history, there was a relatively short period of time that banks had to actually apply for TARP; I believe the cut-off was in November. We didn’t feel that we had enough time to fully evaluate whether we could use that capital well, and applied for it, knowing that we could withdraw the application. In the ensuing weeks’ we did a lot of analysis and a lot of work on how we might put that capital to work to help us grow the bank and grow our income and increase shareholder value. We ultimately concluded that we really didn’t need that capital over the next couple of years to grow the bank in a sound consistent manner the way we have over the past three years, and believe that when and if we need additional capital, it will be available from other sources that do not have the restrictions associated with TARP. Therefore, we decided that since we didn’t really need that the capital now and couldn’t put it to work effectively to increase shareholder value, that we would withdraw the application.”
Mr. Ritacco: “Especially when the regulations were pushing, as you saw in the hearings yesterday, the folks from the big banks to pinpoint exactly how they have lent that money out. We still have capital available to lend out, so we felt as though perhaps we didn’t need the additional capital, particularly with the strings that are attached to it. In addition, perhaps it might be a bit more difficult to segregate the amount of capital that we got from the TARP vs. the excess capital to show that we have done our extra lending. It was just a much more conservative financial place for us.”
do have a stock repurchase program; please tell us what that will do for
CEOCFO: What is ahead for the company?
Mr. Ritacco: “We will continue to grow the bank. We will maintain our conservative lending and investment strategies of the last three years. We will be opening a new office in Mt. Kisco; that will be our fifth branch office, probably some time in early April. We will continue to focus on building our customer relationships. Our hope is to continue to focus on our increasing our interest income, controlling our expenses and obviously building profits and shareholder value in the long-term.”
closing, why should investors be taking a look at CMS Bancorp?
Dowd: “Over the
last three years we have spent a lot of time and effort to transform the
bank, to take what was a sleepy mutual bank, with some very old outdated
branches, old outdated technology, and almost no growth in the years
preceding the time John arrived here into something better. Over that
three-year period, we think that we have built a real strong platform, a
strong infrastructure so that we can grow in the future. We think that we
have a great market place here and that we have things positioned to take
advantage of the opportunity. We have a strong strategy and infrastructure
in place including some great people we have added. We think that the
marketplace that we are in provides some tremendous opportunity for us to
grow, to become more profitable and to return some real value to our
“The vision at CMS Bancorp is to be a consumer
oriented bank focused on building our shareholder value, and conservatively
increasing our loans and deposits through our community.” - John E. Ritacco
ceocfointerviews.com does not purchase or
recommendation on stocks based on the interviews published.