Hancock County Savings Bank

Hancock County Savings Bank

Q: What is the importance of community service to Hancock County Savings Bank?
Comm: The community is our customers and our employees. We are here to serve them. We gather up their local deposits, and then we lend these dollars to local persons who need it. That is how we serve our community. It is more than just benefiting the bottom line; it is a way of marketing to our potential customers. The people get to know our employees, our board members and our management. They get to know the type of people we are and that we are here to help.
Ferrari: Community involvement and volunteerism are a way of life for our employees. The bank encourages these activities at the highest level, from the Board of Directors down through management. It is our civic obligation.

Q: What should be the focus of community banks?
Comm: The purpose should be to present a fair loan product with good deposit offerings. We have certain delineated lending areas, and we lend only to these areas and take deposits only from these areas. 
Ferrari: Homeownership. Our goal should be to help people purchase their family home. We need to ensure that our customers are given every opportunity to choose the mortgage lending product that best meets their needs.

Q: Your bank has a community foundation. Could you tell me a little bit about what it does and its history?
Comm: Several years ago the bank realized a sizable return on an investment, and we converted a million dollars of that to a foundation. Since then the foundation has donated $400,000.00 to our local area organizations, which have been experiencing difficult times recently because of the depressed economy. The yearly total of the grants that we give to these organizations within our service area is usually between $28,000 to $60,000.
Ferrari: Yes, we give to non-profits and schools, but not just through our community foundation. The bank has a yearly line item in our budget for our donations to the community, which are made throughout the year.

Q: What are the best opportunities for growth of community banks?
Comm: Stay focused on the community, your products, and what you know.  I like to tell people that it is about adapting to change. "You have to stay on the balls of your feet at all times." One such change that we see coming is in technology. Technology is generally very expensive, and our bank has traditionally been very conservative in nature, fiscally and otherwise. We want to ensure that the technology we provide to our customers is safe and does not jeopardize any of their personal information. We see that the cost of some technology is going down; but as I said, we will stay on the balls of our feet and be there to answer the needs of our customers.
Ferrari: A community bank should be focused on the community and remain a "people's" bank. Your tellers should listen to the needs of the customers and that communication moves on up to management and the Board of Directors. Listen to what the community is saying and adapt for that. Our bank just established a new technology department because we do see that as a growing need for our customers. Our board is cautious and uses good judgment, and we will find the best way to serve our customers. The next logical step is in mobile banking, and that is where I expect our bank to go. There remain some security issues, but those are being addressed.

Q: What do you believe the community banking industry will be like in 10 years?
Comm: They will remain community focused. There may be some differences in the means of providing services to our customers, like the interaction one has with tellers; but one thing is clear, Hancock County Savings Bank will be there to serve our customers.

Q: As a whole, what do you think community banks are doing right? Where are they falling short?
Comm: Years ago when I got the job as president, a friend of mine that was a Wall Street banker, asked me when was I going to get the black heart to go with the job. It struck me that this is not Hancock County Savings Bank. We are a community bank, and we don't have black hearts here. We take deposits from members of our community and loan money back out to the people; no black hearts needed.
Ferrari: The banks are falling short by failing to differentiate themselves from the failed banks. Hancock County Savings Bank is strong, as are many community banks. We are not offering these flashy products. We don't sell our loans. All community banks need to do a better job of stating how we are different and that we love and are invested in our communities.

Q: How has the recession affected your lending?
Comm: There has been no effect. We are stable, and we are lending money. As a matter of fact, West Virginia banks have been lauded for being so safe and secure in this downturn.

About Hancock County Savings Bank
Hancock County Savings Bank consists of four branches in and around Chester and Weirton, West Virginia. The Bank was formed in 1899 and granted its first mortgage in 1900. The Bank had deposits at the end of 2010 in the amount of $247,118,728.08. Click here for more information.

Noteworthy Takeaways
by Timothy R. Moore

Last Thursday and Friday, I was in Charlotte for the UNC School of Law Banking Institute. The conference is very deserving of its great reputation (albeit after almost 6 hours of Dodd-Frank analysis on Thursday, I was just glad to be able to stand). The panels and speakers consisted of attorneys, representatives from the Federal Reserve, FDIC and OCC, and bankers, including BB&T President and CEO Kelly King and Fifth-Third Bank Executive Vice President and Chief Administrative Officer Paul L. Reynolds. Considering the wealth of insight and information shared, I thought I would pass along some of my community banking takeaways.

Read the full article on our website.

In March 2011, the Fourth Circuit issued a decision that has potentially substantial impact on the banking community at large, especially as it relates to decisions on whether to extend credit to a debtor after he or she receives a discharge in bankruptcy. In Maryland v. Ciotti (In re Ciotti), 2011 U.S. App. LEXIS 4492 (4th Cir. Mar. 8, 2011), Chief Judge Traxler issued a decision that, while fact-specific, could lead to continuing tax liabilities after discharge for a number of debtors. The decision serves as an important reminder to the banking community that not all debts are discharged, and it also reveals that tax liabilities that a potential borrower asserts have been discharged should be viewed skeptically when assessing a potential borrower's financial statements.   

Denise Ciotti filed Maryland state income tax returns for each year between 1992 and 1996. In 1998, the IRS issued a Letter of Determination making adjustments to each of Ciotti's federal returns for those years that significantly increased her federal adjusted income. Maryland taxable income is based on the federal adjusted income, and Maryland law required Ciotti to report the amount of changes to her federal adjusted income to Maryland tax authorities. Ciotti did not report the changes; however, the IRS forwarded its determination to the Maryland Comptroller, and the Comptroller made adjustments based on the determination resulting in an assessment of more than $500,000.00 in taxes, penalties and interest.

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As expected, the FDIC moved against the former key officers of Washington Mutual Bank, namely its former President/CEO, COO and Home Loans President in March. The FDIC believes that these three people are responsible for WaMu's higher risk lending program, which accounted for the bank's huge losses. It is reported that the damages being sought against the defendants may be in excess of $900 million, which should grab anyone's attention. In addition to the eye-popping damages figure, the case is important in helping officers and directors understand the importance of their duties and their potential liability if they fail to uphold them.

The claims essentially remain the same as those discussed in my earlier articles about FDIC actions. The usual claims of gross negligence, ordinary negligence and breach of fiduciary duty are all present. As such, a more noteworthy aspect is the factual allegations made that form the basis for their claims. It is from reviewing these allegations (and these are only allegations at this point) that we discern the specific behavior that the FDIC would find objectionable - many allegations boil down to the FDIC expecting sound management principles.

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