Richard E. Taber
Chairman and Chief Executive Officer
First County Bank
Complete Biography                 

Richard E. Taber, chairman of the board and CEO of the First County Bank, Stamford, Conn., started as a part-time teller 42 years ago.  First County Bank is a $1.2 billion (in assets) mutual savings bank that is operated for the benefit of its depositors rather than shareholders. The bank’s mission will always be to serve its customers and the communities in which they live.

 

We caught up with Mr. Taber a few weeks back to get his take on the economy and challenges to our industry.

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In general terms, how did your bank fare financially last year?

We had a solid year given the economic environment: $5.6 million net income with a .46 percent ROA. The bank grew $28 million in loans and $16 million in deposits. Our delinquencies and non-performing loans doubled, but they are still under 1 percent. We are in very good shape financially.

 

First County Bank has routinely conducted customer satisfaction surveys though RFG. Your customer satisfaction scores have steadily increased over the last five years and we’ve seen a corresponding increase in the amount of business your customers bring to the bank. As satisfaction increases, share of wallet increases. Why do you think your scores have improved?

The keys to improving satisfaction are hiring the right people, training, measuring and rewarding the right behavior. Simple and straightforward, but difficult to properly execute.

 

Hiring Philosophy – We only hire individuals who are both sales and service -oriented, and who have strong interpersonal skills. You can teach banking knowledge as long as you hire the right people in the first place. Our employees are a core strength of the bank. We have a very diverse marketplace – it’s common to hear four different languages at the same time in the same branch. Imagine the common bond our teller Grazyna has been able to establish with her Polish-speaking clients. Simply amazing. And the people we hire tend to stay with the bank, which is very important. The average tenure of our employees is 10 to 15 years.

 

Training – Four of our 200 full-time employees are full-time trainers. Our focus is: a) teaching employees how to identify customer needs, and b) teaching bank product knowledge. People won’t sell what they don’t understand. Selling the right product in the right situation is not really selling; we’re simply helping our customers achieve their financial goals. It’s also critical to provide extra staff so employees can leave their posts to receive training, while we still take care of the customers.

Editor’s Note: FCB’s efficiency ratio is around 70 percent, right in line with the national average. This means they use $.70 in expense to make $1 in revenue. However, the bank is driving more than double the average assets per employee, suggesting better leverage of the employee base than the average bank.

 

Measuring Success – We track key metrics like new household cross-sold ratio, online banking penetration, checking penetration, etc. We support “product of the month” sales contests between branches – it really can be quite competitive. We also try to cross-pollinate across all divisions. A good example of this is leveraging the retail lines of business with trust. Our front-line staff possesses the skills and knowledge to identify opportunities across all divisions.

 

Reward/Recognition – Monetary incentives are awarded when employees help customers meet their financial goals; however, this is not a large part of their compensation. A big part of this culture is employee recognition. They really value the recognition.

Are you seeing any customer movement due to the big bank consolidations?

Halfway through 2008 we were well under goal for deposit growth, but in recent quarters we’ve really benefitted from the turmoil surrounding some of the big banks. Our branch managers are seeing a lot of new faces in the branches. The lending officers have forged even closer relationships with our business customers; many of them consult their loan officer prior to making big business decisions, and even consider their loan officer to be their financial advisor.

Recently, we’ve seen a large influx in funds in our Tax Deferred CD and in a promotional CD that allows customers to withdraw 50 percent of their funds, penalty free, at any time.

What’s happening in your local markets? Is this economy changing your business?

Local foreclosures are double what they were, but they started from a pretty low base. Many local residents work on Wall Street, and we are starting to see local job losses resulting from the economic challenges. We are working closely with many of these customers to help them through these challenging times.

Residential lending has been, and will always be, a strength of the bank. In fact, more than half the loans on our balance sheet are first mortgages. We’re still doing a ton of first mortgages and have the capacity to fund and hold very large jumbo loans for the right customers. Many mortgage brokers have headed for the hills, and we are finding that local realtors love us again.

Even though “spec” loans only account for 17 percent of capital, we have decided to back off this type of lending. This economy seems to be changing in waves. The first wave hitting the beach was the real estate and credit crunch, driven by subprime lending. The second wave is job losses. We should find the bottom of the real estate market this year, and hope for improvements in 2010.

How does your organization structure differentiate you from other banks?

We are locally owned and have been in business for more than 150 years. Our customers know we are committed to them for the long term. In fact, we think this is a key differentiator in this marketplace, and we are working on ways to leverage our structure into more profitable growth.

Thank you for your time, Mr. Taber. Any final comments for The Raddon Report readers?

Fasten your seatbelts … it’s going to be bumpy ride. We are really fortunate we didn’t stray far from our mission – we stayed on course and didn’t venture into the subprime arena. For a while we were questioning our mission, wondering if perhaps “vanilla banking” as we know it was a thing of the past. Now we think vanilla tastes pretty good. There are huge opportunities out there for portfolio lenders. Don’t stray far from your mission, and enjoy the ride!

This interview was conducted by Eric Wittekiend in January 2009.

About First County Bank
First County Bank is a locally managed, diversified financial services organization that provides a wide array of banking services, including deposit and loan products; mortgage, trust and investment services; and business banking solutions. Founded in 1851, under the name The Stamford Savings Bank, First County Bank has served the communities of lower Fairfield County for more than 158 years.

 

About Mr. Taber

For additional information, please visit www.firstcountybank.com.

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