WELCOME GUEST  |  LOG IN
Saunders, Real Estate, Hamptons
27east.com

Business Center

Feb 16, 2010 5:22 PMPublication: The East Hampton Press

Bridgehampton National Bank celebrates its centennial

Feb 16, 2010 5:22 PM

In 1910, loans at Bridgehampton National Bank were settled with a handshake. In 2010, things are not all that different, according to Kevin O’Connor, the president and chief executive officer of the bank’s parent company.

“It’s certainly true that we’re all subject to a lot more documentation and things that we need to do,” he said. “But the basic business, in some ways it hasn’t changed.”

The Bridgehampton National Bank will celebrate its 100th birthday on Friday—complete with cake and balloons at each of its 16 locations across Suffolk County.

The history of the bank finds its roots in the agricultural community that once surrounded it when farmers and merchants needed capital and a lending institution that understood their cyclical capabilities. A bank that began with just $25,000 in capital, about $2,000 in deposits and a handful of employees now has assets nearing $1 billion and more than 200 employees.

Though all of its branches remain on Long Island, Mr. O’Connor said there is one client, a former local business owner who won’t part ways with the bank that he trusts, who banks from as far away as Florida through a special arrangement with BNB. That commitment to its clients shows that BNB’s community values have not changed, bank representatives say.

Tom Halsey, a member of the bank’s board of directors for 41 years, can speak to it best. Mr. Halsey, a Water Mill farmer, became a client at Bridgehampton National Bank early in his career as his financial needs grew. He said that for a farmer, and especially a potato farmer, it was essential to work with a bank that could be understanding about repaying loans—he said he would need a lot of cash in the spring to purchase seeds and fertilizer, and the bank would get paid after the crops were sold in the fall and winter.

He and Mr. O’Connor paint a picture of an institution similar to the New Bedford Building and Loan, the savings and loan business run by George Bailey in the film “It’s a Wonderful Life.”

“The community needed a bank and the bank needed a community,” Mr. Halsey said. “And that’s the way it still is 100 years later.”

Throughout the country’s current financial crisis, he said the bank has continued to provide for its clients in an almost unchanged capacity.

“It was very satisfying being on our board of directors,” he said of a time when the country was pointing fingers at the nation’s biggest banks. “Because the board and the management teams that have been in place over the years have followed a conservative approach, we found ourselves in a very comfortable position while others were failing. It was certainly gratifying.”

Mr. Halsey contributed the success to the fact that the bank’s management and board of directors are local people with ties to the community they work in. They know their clients personally and understand their dependence on bank resources. That’s also true for the bank’s shareholders, he said.

“It would be very embarrassing to me to have to say to the shareholders that we’re having trouble and we can’t pay a dividend,” he said. “I’m a representative, and all the directors are, of the shareholders and they depend on us to not only provide for them a good investment but a good return, too. Many shareholders have been so for a long time and depend on the dividend for their livelihood.”

Small and midsize banks based on Long Island have recovered from the downturn faster than their national counterparts. Commercial and Industrial Loans made by Long Island banks were up 6 percent in 2009, while nationally there was a 15-percent decline, according to an article published in Newsday on Monday. At Bridgehampton National Bank, year-end results just released for 2009 mirrored those findings, showing that total assets for the company grew 17 percent and deposits increased by 20 percent.

Mr. O’Connor said banks like his have survived because they aren’t involved with risky lending practices and they keep their money in the community.

“It’s locally based lending,” he said. “When you make a deposit here it gets invested here. We’re putting it back into the marketplace.”

He described the business of lending at a small institution as a symbiotic relationship. Because the lenders know the people they are lending too, they don’t make loans they know the borrower can’t pay back. They also have the peace of mind of knowing the loan won’t default, and therefore feel comfortable giving out more loans within the community.

“What’s nice about being a local bank is you know the people you’re lending to,” he said. “If this year wasn’t the best year you ever had in your life, if I’m a local bank it’s going to be much easier or feel much more comfortable lending you money.”

1  |  2  >>  

You've read 1 of 7 free articles this month.

Already a subscriber? Sign in