Bank of New Jersey Director Shares Benefits of Local Banks
Nancy Graves, President, CEO and Director of Bank of New Jersey, explains the difference between local and national banks, and what consumers can expect in 2017.
"Nancy Graves is president and CEO, director and director of Bank of New Jersey. Good to see you, Nancy. Good to see you. Nancy, welcome. Thank you. Bank of New Jersey is...? Describe it. We are in Bergen County, 11 years old. We have nine locations in Bergen County, and we're a commercial bank. A commercial bank? Yes, mm-hmm. Describe the difference between commercial bank, community bank. Well, we're a community bank and a commercial bank. Mm-hmm. And some community banks do a lot more consumer lending. Thrifts, for an example, would lend mostly mortgages to res... you know, to residential lending, and we do lending to businesses. That's our primary job. And what's the difference between a community bank and a national bank? Well, a national bank... In effect. You're getting complicated, Raf. [Chuckles] No. In effect, how does it differ for the people who bank with you? It does make a big difference because national banks would be banks that are chartered to do business nationally, where community banks are state-chartered institutions. But an interesting fact is 90% of banks in this country are community banks. Mm-hmm. So the 10%, the really large national banks that do hold a lot of the deposits, those are banks like Wells Fargo and PNC Chase. And so they're chartered... they gather deposits everywhere, and they lend everywhere. Community banks, we gather money from our depositors locally, and we invest that capital locally. And how does that affect the consumer, though, your customers? Uh-huh. How would we see the difference? Hmm. Well, I think that sometimes what the consumers don't see is that community banks, the technology has leveled the playing field. So we have all the technology that big banks have. So for consumers, I think it's educational. Sometimes they feel like, oh I need to be at a big national bank to get what I need, when in fact, community banks are more likely able to meet their needs. Nancy, talk to us about interest rates, as we're taping, Raf, on November 3, 2016. Interest rates today, describe them. Well, yesterday we saw the signal, right. Yeah. The Fed said no, it will rise. And yeah, we think that, you know, that was little shift, right? So we would imagine with inflation where it is, jobs where they are, we're going to be looking at an interest rate increase here shortly, maybe December, first quarter. Now saying that, we've all said that for five years, and we've all been wrong. Yeah, I know, I know. [Chuckles] Say it happens, what do you think it means? I don't think it means a lot. I think it's already in the market. We've seen treasuries move up, you know, about 40 basis points from where they were from very low levels of a year ago, right..."