|
|
VSB Bancorp, Inc. (VSBN) |
|
|
|
CEOCFO Current
Issue |
This is a printer friendly page! VSB
Bancorp, Inc. – with a competitive advantage because the bulk of their business is in
industries where many of the larger banks have difficulty lending VSB Bancorp, Inc. (OTC: VSBN) is the one bank holding
company for Victory State Bank, a Staten Island based commercial bank with four full
service locations in Staten Island; the main office in the Oakwood Heights Shopping
Center; the second on Forest Avenue; the third on Hyatt Street; and the fourth branch on
Hylan Boulevard. “VSB has been around for about five-and-a-half
years; the Bancorp owns Victory State Bank, which is a commercial bank headquartered with
all branches on Staten Island. The need for a small bank to serve professional and
commercial customers as opposed to consumers is based on the ability to know your
customers better,” explains Mr. Merton Corn, CEO
of VSB Bancorp, Inc. “This allows you to service their
needs better, and make commercial loans to brand new businesses and to retail businesses
that never show a profit but have been around for a long time and always pay their bills,
but don’t demonstrate; in their financial statements the ability to repay debt. That
capacity is lost in larger banks that now do computer-based screening for loan
applications, so if you don’t’ pass the screening, you don’t get the loan.
While commercial loan officers in those banks, are entitled to override those screenings;
they do so at their own peril; if they are wrong, they have to justify the decision.”
Mr. Corn tells us about the unique environment in Staten Island, NY. “Staten Island is an entrepreneurial community and it is only seven
by fourteen miles in size. The fact that it is an island creates a bit of chauvinism in
the residents; they like to feel distinct from the rest of the city, and a bank based on
Staten Island instead of a New York City bank like Citibank, or Chase, is a shorter
shrift. People like to identify with the Island, and therefore, Victory State Bank
gets the benefit. Victory Boulevard is a main thoroughfare in Staten Island, and everybody
understands the name is identified with Staten Island. So firstly, it is an
entrepreneurial community and it is a community with a relatively high household income,
partially because often there is more than one generation living in the household, unlike
the rest of the city, the nuclear family is not the mainstay of the family; the
non-nuclear family is. When we look at the loan application, we will see that a 28 or 32
year-old will live at home with his parents, and that is not typical of the rest of the
city.” VSB reaches new customers with a very personal approach.
Mr. Corn states, “We go out and knock on doors. We
contact all new businesses on Staten Island by mail, and we follow-up by telephone. We
contact existing businesses by telephone and then follow-up by personal visits. By the
time I reach someone I haven’t talked to before, he is already upset because I
haven’t reached him, he says, “What am I, chopped liver? You talk to my
next door neighbor and my previous employer, why haven’t you called me?” The
people on the Island expect to be reached by us on a very personal basis, and we try to
comply with that.” As to why potential investors should interested, Mr. Corn comments, “The bank has
shown dramatic increases in both size and earning per share. That is partially attributed
to the fact that we are operating form a small base and it is easy to leverage that small
base. On the other hand, the bank broke even in only eleven months, which is far more
rapid than is typical. The plusses are that we, the management team and I, know the Island
well because we have been here a long time and are known to the Island so that people come
to us to do business. The drawbacks are equally obvious; because of our size, certain
segments of the market are not available. Because of our choice of market, we are leaving
some money on the table in the mortgage market. The things that I would consider as an
investor, is the ability of the bank to continue to grow and increase its profitability as
it becomes larger and as it becomes more difficult to steal market share from our
participants. We have been able to do that and I think we will be able to do that for some
time. When we would reach a plateau, is somewhere in the future that I can’t
identify, but as an investor, that would be my area of concern.” |
|
|
|
To view Releases highlight & left click on the company name!
|
|
