A Message From The President
I just returned from a trip to Washington, DC to visit our legislators. I must say, I am disturbed at the general misconception that banks are not lending. I am not sure where the information is coming from, but there is a strong underlying current that banks have curtailed their lending. I can assure you that banks throughout New York State, and throughout the country, continue to lend to their customers. Lending at Tioga State Bank increased nearly 10% between year end 2007 and 2008. In talking with other bankers, I am told they have also increased their lending. So why do people feel lending has stopped? There are a number of factors that appear to be causing this impression. I do think that many banks have reinforced their loan underwriting standards. Tioga State Bank has maintained our sound underwriting standards. However, I think many people have heard stories of someone who has been turned down for a loan. Without knowing the full story behind the credit decision, it is difficult to know why someone may not have been approved for a loan. Prior to October of 2008, there was a very large market which securitized loans and sold them to investors as different types of bonds. This secondary securitized loan market, which included mortgage loans, credit cards, student loans and small business loans, virtually disappeared overnight last October. This market was generating a volume of loans that was much larger than the volume of bank loans made in this country. With the securitization market dropping off the cliff, there is indeed a void left which banks are beginning to fill. However, the securitization market also provided loans to many borrowers who may have been unable to borrow from banks. The country is in the midst of facing economic adversity not seen since the Great Depression. Typically during these business cycles, the demand for loans decreases. People cut back personal consumption and businesses delay investing in projects; thus, loan demand decreases. I hear evidence of many bankers looking for quality credits but unfortunately there is currently a lack in demand. Looking back upon all the factors, we realize that some of the lending provided by the secondary securitization market was not prudent. There were loans made to individuals and businesses that were based upon the thought that real estate will always appreciate over time. Tioga State Bank has always believed loans should be made based upon a customer’s ability to repay the loan. This underwriting standard goes back 145 years to our start in 1864. It is a core fundamental of our loan business. Tioga State Bank continues to adhere to sound fundamentals. We were recently awarded the Five Star rating by BauerFinancial, an independent bank rating firm, for the 69th consecutive quarter. For over 17 years we have achieved the highest rating awarded by BauerFinancial. Less than 10% of the banks in the United States can make this claim. We are very proud of this achievement. As always, if you have questions, stop into any of our 11 community offices. We always welcome the opportunity to chat with you and share information. We continue to be here for you - yesterday, today and tomorrow.
Sincerely, FOR IMMEDIATE RELEASE July 10, 2009 Information Contact: Kim Depew, Marketing Manager, 607-565-3570, ext. 227 Tioga State Bank Earns a 5-Star Rating for the 70th Consecutive Quarter Tioga State Bank has been awarded BAUERFINANCIAL’s 5 star SUPERIOR rating, the highest rating awarded, in each of the most recent 70 consecutive reporting periods. BAUERFINANCIAL Reports, Inc., the nation’s leading bank analyst, recognizes Tioga State Bank’s exemplary financial strength and performance through this prestigious rating. Tioga State Bank is a member of an elite group of banks – those banks that have achieved BauerFinancial’s highest 5-star Superior rating for at least a decade. This achievement earns Tioga State Bank BauerFinancial’s coveted Exceptional Performance Rating, a distinction only 7% of the nation’s banks may claim. The rating is based on an analysis of current financial data as filed by Tioga State Bank with federal regulators, supplemented by historical data. “We are honored to receive this prestigious award for our stability and soundness, especially in today's economy," said Robert M. Fisher, President & CEO. “Tioga State Bank continues to lend money and provide top-notch consumer, business and investment products and services to residents throughout the Southern Tier.” “Tioga State Bank has avoided the lending and underwriting problems that have plagued much of the banking industry,” said Karen L. Dorway, president of BauerFinancial. “It is clear that the staff of Tioga State Bank, under the direction of Robert M. Fisher, CEO, remains diligent in adhering to sound banking principles and standards.” Established in 1864, Tioga State Bank operates 11 conveniently located community offices and can be found on the internet at www.tiogabank.com. MEMBER FDIC To view TSB Services, Inc. Consolidated Statement of Financial Condition for end of year 2008, click here. © 2005 Tioga State Bank | All rights reserved | Member FDIC |
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