Community Broker News and Views

For Better or Worse? How Big Bank Marriages Affect Local Business Owners.

Do you BB&T take Susquehanna Bank to be your lawfully wedded financial partner?

To have and to hold your business customers from this day forward?

In good times and bad?

To cherish them as long as their businesses shall live?

The announcement has been made. The plans are being drawn up. Winston-Salem based national banking behemoth, BB&T, has selected its new financial partner – Litiz-based Susquehanna Bank. The union will make BB&T a $200 billion+ financial institution with a stronger presence in the Mid-Atlantic, including Maryland and now Pennsylvania.

While some market analysts may consider the merger good business, many local business owners may discover that it’s not really good for their business. Yes, shareholders of both banks may be dreaming of higher profits, while business owners here at home may have to deal with significant losses, including:

Access to local decision makers. There’s a big benefit of working with a locally based bank; It’s called access to decision-makers. Business owners like to feel important and to share their vision with the folks who make the decisions. It’s hard to have that level of accessibility when you’re dealing with one of the largest banks in the country, and decision-makers who don’t know you or your business.

Trusted and familiar advisors. It’s tough going in the business climate. Today’s businesses owners need more than just loans and deposit products; they also need business bankers who understand their business and can provide advice and access to local resources to help them manage their day-to-day challenges. Often big bank mergers result in local businesses losing that personal guidance and assistance. In some cases, business owners no longer even know the name of their banker.

Local knowledge. Local banks have one unique advantage over their national bank counterparts – knowledge of the local marketplace. If they know a business owner, they may be able to weigh a business owner’s character in rendering decisions not solely based on credit scores. This is also important in challenging economic times when businesses owners need their banks to stand by them. Local banks understand how important businesses are to the strength of the local communities, and have a vested interest in helping them succeed.

There’s no question that larger banks offer a significant advantage in terms of depth of branches and ATM locations. However, technology has leveled the playing field. With services, such as mobile banking and remote deposit capture, business owners banking with local technology-focused banks like DNB First can connect with their money any time. And even more importantly, they can connect with their local business banker (the one who knows them and their business) any time just by picking up the phone.

Now that’s long-term commitment.

Women-Owned Businesses: Hear Them Roar

There are more than 9.1 million of them in the United States.

They employ more than 7.9 million people.

And generate 1.4 trillion in sales.

They represent a variety of industries. And are only growing stronger.

In fact, according to a report from American Express OPEN, in the past 17 years, the number of them has increased at a rate of 1.5 times the national average.

They are women-owned businesses and a powerful force that contributes to the success and vitality of the United States economy.

Yet, despite their success and position as the fastest growing business segment, women-owned businesses still must overcome some major challenges, including their biggest one – getting credit. These businesses not only don’t get the credit they deserve for helping boost the economy, but also don’t get the credit or financing they need to help grow their businesses.

Why is that?

One reason is that women-owned businesses tend to be newly established businesses with little collateral. As such, it is difficult for them to obtain bank financing as banks have tightened credit standards for these types of businesses. Another reason is that they typically don’t have access to sources of external funds, such as venture capital firms, which are more available to their male counterparts. Because of this, they really only have one source of financing – banks. And that brings up another problem – many financial institutions don’t understand them. Women business owners are very cautious about their borrowing. They don’t just want capital; they want networking and information opportunities so they can learn how to grow their businesses.

As part of its focus on serving the needs of ALL small businesses, DNB First recognizes the importance of meeting the needs of each and every business, including those owned by women. That is why we have a dedicated female Small Business Relationship Manager who is well attuned to the unique needs and challenges of this growing market.

In the coming months, DNB First will continue to work on helping women-owned businesses connect to the resources and information they need to succeed. Because let’s face it, when women-owned businesses grow, our economy roars.

All Business Growth is Local

It’s long been said that “all politics is local.” One needn’t look further than the current political signs placed on lawns and in the hands of supporters on busy street corners to see proof of that. But if you look closely at the signs that adorn Main Streets across America, you’ll see that it’s not just politics that’s local, but the growth of business. Or in particular, small business.

Anyone who knows business, however, knows the term “small” shouldn’t be used lightly. Small businesses are, and have always been, the engines that fuel the job market and the entire United States economy. These businesses make up 99.7% of employer firms and create 64% of net new private sector jobs according to the Small Business Administration (SBA).

The power of the small business people.

With the impact of small businesses on our economy, business owners are in a position of power when it comes to their banking relationships. Small businesses are a critical market for financial institutions and should be treated as such. That means business owners should demand that their financial institution not only understand their financial needs, but also be able to help solve them.

For example, their financial partners should understand that without the resources and staffing of larger organizations, small business owners have to do much more with a lot less. Business owners should not only be able to bank and manage money conveniently, but also experience streamlined credit applications that make it easy for them to get the credit they need, when they need it.

As a bank dedicated to supporting local communities, DNB First has made a strategic effort to respond to the needs of local business owners. The Bank has partnered with the Small Business Administration (SBA), local Small Business Development Centers, and Chambers of Commerce to help support the gamut of businesses – through all stages of growth.

Understanding businesses also means leveraging technology and people to provide solutions to help fuel the growth of small businesses. This is why the Bank has heavily invested in services, such as remote deposit capture, lockbox, online and mobile banking with mobile deposit, and payroll services, which give businesses owners the freedom to bank and manage cash flow more efficiently and centrally. And with local people, the bank is able to supplement that technology with personal attention from people who understand the local marketplace. That’s why DNB First recently launched a Small Business Division with a dedicated Small Business Relationship Manager.

DNB First’s local presence also allows the Bank to quickly respond to the credit needs of business owners. With decision-making and underwriting conducted locally, the Bank is able to streamline the credit application and approval process and give business owners access to decision makers – something that’s often not possible with those too-big-to-fail banks.

With this local presence and technological strength, DNB First is truly able to bring banking right to the people, making the bank a very strong financial candidate for earning the business and trust of local business owners.

To learn more about DNB First, including special events and activities, such as Small Business Saturday on Saturday, November 28, visit dnbfirst.com.

Does Your Financial Advisor Even Know Your Name?

…Sometimes you want to go
Where everybody knows your name,
and they’re always glad you came…

These words written by American singer and songwriter, Gary Portnoy, are best known as the theme song to the sitcom, Cheers. On this 1980’s hit show, patrons of a local Boston bar came to gather with familiar people and avoid their problems.

Today, those very words ring true of a problem that many investors today can’t avoid – getting their financial advisor to know their name.

It’s hard to believe that so many investors have left something as important as their financial futures in the hands of complete strangers; yet in truth, that’s what has happened. Fearful from the financial crisis of a few years ago, these investors have opted to entrust their wealth and financial goals to larger, “too-big-to-fail” institutions. What these investors have quickly learned, however, is that choosing bigger institutions actually means getting less of what they need most today – personal guidance and attention.

This is particularly concerning as investors are navigating serious world economic and political uncertainty, which can significantly impact financial markets. And that’s not even mentioning one of the most staggering facts about the need for investment guidance today: baby boomers are entering retirement and America must prepare for what will be the largest transfer of generational wealth in our country’s history.

Another alternative closer to home.
Fortunately, today’s investors have an alternative for getting the personal attention they need and the trust and stability they require – wealth management where they bank. Many community banks, including DNB First, now offer a full menu of financial and wealth planning services delivered by licensed, professional advisors. These advisors work closely with their clients and their clients’ accountants and attorneys, allowing them to truly customize their financial planning and investing to meet the unique needs of each individual client. And because they are local, providers like DNB First make it easy for clients to remain in contact with their financial advisors to ensure they adjust their financial plans as their life circumstances or market conditions change. Makes sense, since it sure is a lot easier to stop by Main Street than Wall Street.

Banks like DNB First offer another advantage – they have in-depth knowledge of the local marketplace. That means if there’s an investment opportunity closer to home, they’ll know about it. It also means they are able to support the growth of local companies, which help fuel and strengthen our community. It may sound cliché, but there’s definitely something good about investing local.

But perhaps the biggest advantage is that financial institutions like DNB First can do something many “too-big-to-fail” investment firms simply can’t or won’t do – know your name.

Learn more about DNB First, including our latest earnings report.

When Soaring College Costs Hit Home

“Poverty is hereditary – it comes from your children.”

Comedian Phyllis Diller may have been joking when she said that, but anyone who is raising a child today knows that there’s nothing inexpensive about having kids. In fact, according to a report from the U.S. Department of Agriculture, “it will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years.”

If that doesn’t shock you, consider an even more eye-opening fact: that figure doesn’t include one of the most expensive costs for parents – financing a college education. According to The College Board, an “in-state public college for the 2013–2014 academic year averaged $22,826 while a private college averaged $44,750.” In the last 30 years, college costs have quadrupled.

A shared burden

The burden of financing college education isn’t just falling on parents; today’s students are amassing significant debt. As the infographic below shows, the average student graduates with nearly $25,000 in debt, giving them an uphill climb on the road to financial success. The burden of this debt may be why they delay getting married and purchasing homes.

So how can parents help their children finance the costs of college and fill the gap where Financial Aid and other student loans leave off? One popular solution is actually close to home — home equity credit. With home equity, parents can borrow off the equity in their homes to pay for college costs, and take advantage of some very significant benefits, including:

Lower rates than those available with private student loans.
Potential tax savings.
The ability to borrow and repay funds with a home equity line.
Interest-only options to keep payments low.
The flexibility to use funds to cover any educational expense — from books to computers to room and board and tuition.

Here to Help.

At DNB First, we have competitive home equity options, including a special rate on a home equity line. Stop by or call us today to learn more. Of course, as with any financial decision, it’s important to carefully weigh your options. After all, college is one of the biggest investments you will make as a parent, so you’d better do your homework.

10 Mind-blowing Facts About The Cost of College Tuition Created by: TakeLessons

Avoiding Jeopardy with Reverse Mortgages

It’s Final Jeopardy. Contestants eagerly await as Alex Trebek, the man with all the answers, smugly reads the final clue of the game.

“A type of mortgage where the bank pays you.”

Within a millisecond, the Jeopardy champion pounds the buzzer and proudly declares “Reverse Mortgage.”

After the dreaded “fail” buzzer goes off, Alex disdainfully declares, “No sorry, that is incorrect. The correct answer is “What is a Reverse Mortgage?”

In reality, this question – What is a reverse mortgage? – has been posed more and more frequently today as mature adults and baby boomers struggle with rising expenses and their adult children worry about how they can help their parents manage them.

So what exactly is a reverse mortgage?

By definition, a reverse mortgage is a type of home loan that lets borrowers age 62 or older receive cash payments based on the equity in their homes. So instead of a borrower making payments to a mortgage lender, the lender makes payments to them, hence the term reverse mortgage.

A growing trend for those growing older.

Reverse mortgages offer some unique benefits, not the least of which is that they generally allow aging homeowners to remain in their homes (borrowers usually do not have to pay back loans until they are no longer living in their homes). Reverse mortgages can also provide a steady stream of income to help seniors manage rising expenses – a benefit that’s become increasingly attractive as cost of living and healthcare expenses have risen.

But despite their popularity, reverse mortgages come with many drawbacks, including risk of foreclosure and higher costs than those associated with traditional loans. Because of the risk involved, potential borrowers must complete a counseling program from a government-approved agency to help them evaluate the pros and cons of obtaining a reverse mortgage. And, they must be careful to avoid overzealous lenders who might try to sway them toward reverse mortgages when a traditional option, such as a home equity loan, or no loan at all, may be a wiser decision.

A model reverse mortgage success.

If used properly, a reverse mortgage can be a very wise investment decision as demonstrated by a retired family friend. The friend had inherited an older home in an affluent community. Though he owned the home outright, the home needed major renovations, including upgrades to the electrical and heating systems. Without the savings to finance these expenses, my friend was faced with three choices: to sell the home and rent, tap into his retirement savings to pay for the repairs, or obtain a reverse mortgage. He chose the latter and received a lump sum distribution that he used to finance repairs and renovation in the home. It proved to be a wise decision as the renovations helped improve the home’s value, and of course, allowed my friend to remain in the home and avoid renting or depleting his retirement nest egg.

Not always the best move.

Reverse mortgages are not for everyone. Because of their high cost, and the risk involved with putting one’s home at risk, borrowers and their children must be careful to use reverse mortgages wisely and not for frivolous purposes. Such decisions can put a homeowner in a more tenuous situation than they were in before they sought the reverse mortgage – in real jeopardy.

How Smart Home Equity Borrowing Can Take You Where You Want To Go

When I got my driver’s license at the age of 16, I repeatedly asked my parents to borrow the car. As you might imagine, back then, our views on “borrowing” were markedly different. For me, having access to a car was the fulfillment of a dream and freedom. For them, it represented a tremendous responsibility and potential danger.

A lot has changed since then (I have my own car now and kids of my own who plead to drive it), but borrowing hasn’t. Borrowing is and will always be a responsibility that gives us the freedom to reach our goals – whether it’s to buy a home, pay for college, or even manage debt.

That’s especially true of one type of borrowing – home equity borrowing. With the freedom to leverage the equity in one’s home to borrow for ANY purpose, home equity borrowing is an attractive way for people to get the money they need to reach their goals. But like newly licensed drivers, home equity borrowers won’t always have someone in the passenger seat telling them how to use it. It’s entirely up to them to proceed cautiously and avoid dangers, including the biggest one – losing their homes.

A few years ago, during the housing economic crisis, many people learned this lesson the hard way. They took out home equity loans to buy things they didn’t need, and lived beyond their means. Some lost their homes to foreclosure, while others still remain trapped living in homes that they can’t sell because they now owe more than their homes are worth #underwater mortgages. In these cases, the very benefit that made home equity attractive – the freedom to use it for any purpose – became their biggest downfall.

As a leader at a financial institution that’s heavily involved in home equity borrowing, I can tell you that home equity is still a solid way to borrow. It offers lower rates than those available with other types of credit as well as potential tax savings (consult your tax advisor) that can make it a very smart way to accomplish your goals and dreams for life. For example, home equity financing is a great vehicle for making home improvements to increase the value of your home, arguably your greatest asset. It also presents a “smart” opportunity for parents to provide a child with a higher education and brighter future. Other responsible uses of home equity borrowing include using it to consolidate debt or start a business.

There’s no question that if you’re fortunate enough to have equity in your home (a luxury that many people don’t have today), you have access to a powerful vehicle that can help you reach your goals. The most important thing to note, however, is that your ability to effectively use that vehicle to get where you want to be is your responsibility. You are after all, the one in the driver’s seat.

To Buy a Home or Not to Buy a Home Now? Survey Says…

Knowing when to buy and when to sell is the biggest challenge of successful investing. Of course, that’s also true when it comes to one of the biggest investments most people make in their lifetimes – home purchasing. You could ask 10 different people if now is a good time to buy a home and get 10 different opinions and rationale for them.

In their National Housing Survey for August 2014, Fannie Mae did ask 1,000 consumers. The results showed an interesting finding – the percentage of people who think now is a good time to buy a home dropped to its lowest level – just 64%. Not surprisingly, the number of people who think now is a good time to sell also dropped to just 38% as shown below.

Source: Fannie Mae National Housing Survey August 2014 Data Release

So what does that mean? Do the people in this survey know something that others don’t about home buying? Economic statistics aside, the decision of whether or not to buy a home really comes down to one single, but highly complex factor – you. You may have to purchase a bigger home to accommodate your family, or downsize to a smaller home that works better for your budget.

Whatever your need, there are some reasons that still make now an attractive time for home buying. Mortgage rates, for example, are still at relatively low levels (4.24% APR on a 30-year mortgage in bankrate.com’s weekly national mortgage analysis on September 3). And though housing prices have grown some, they are increasing at a slower, steady pace. Add to that, the fact that rent prices have increased significantly, and you have a strong case for home purchasing.

The good news is that lenders are still making mortgage loans. At DNB First, for example, we are more committed than ever to making homeownership possible through our new mortgage lending division. You can learn more about our mortgage offerings at dnbfirst.com.

So when it comes to that all important question of “to buy or not to buy,” it really comes down to one thing – you.

The Funny Ritual of the American Family Vacation

One of the funniest movies of all time… Next to Christmas Vacation!

Humor in America

A Celebration of thirty years of National Lampoon’s Vacation.

In the summer of 1983, Americans were treated to one of the best comedy films to examine the American family vacation and its inescapable heart of darkness: National Lampoon’s Vacation, directed by Harold Ramis and written by John Hughes, who based the screenplay on his short story “Vacation ’58.” The film stands as the best cultural document to exploit the humor of the American family vacation, that mainstream celebration reasserting the right to own the landscape and be miserable in the process–and all at great expense. There is no cultural behavior that is so consistently marked with promise year after year and also, in equal proportions, disappointment–unless we talk about marriage itself, but I dare not suggest that.

Few movies tapped into the zeitgeist more effectively than Vacation. This is not only evidenced by its success in the…

View original post 950 more words

The National Italian American Foundation’s Voyage of Discovery

The executive vice president and chief banking officer with DNB First, Vince Liuzzi has a long history in the banking industry. Vincent also supports charities ranging from low-income housing programs to the Boys and Girls Club. Additionally, Vince Liuzzi has served as an executive member for the National Italian American Foundation (NIAF) for more than 10 years.

Founded in 1975, the nonprofit National Italian American Foundation strives to promote Italian-American heritage by researching the group’s history and culture, funding scholarships and grants, and supporting youth programs and the teaching of the Italian language in schools across the country. The NIAF also offers Italian-American students the chance to travel to Italy and experience 10 days of programs through the Ambassador Peter F. Secchia Voyage of Discovery Program. Designed to strengthen the bonds of the visiting students to the country of Italy, the program includes the opportunity to perform community service in the host city. Open to students ages 18 through 23, the program offers a visit to a different region each year.