Overheard at a Branch Opening

"We're financially lacking in fodder,
As bankers, to earn as we oughter,
When deposits accrue
At zero-point-two
And we lend out at three and a quarter."

Dr. Goose was among the guests at the opening of the Glen Ridge, New Jersey branch of Boiling Springs Savings Bank. As an invited community leader (not as a limericker laureate), I chatted with Boiling Springs' President & CEO Bob Stillwell, who proudly told me of the bank's adherence to the time-honored business of taking deposits and making mortgages. This basic approach has served the bank well from the 1959 founding of its original branch in Lyndhurst NJ, to the opening of its 18th branch today. Not only has the bank stuck to the basics, it has also stuck with Mr. Stillwell, who joined over 40 years ago as a recent college graduate.

One of the ways in which Boiling Springs, a mutual holding company, puts down roots in the four New Jersey counties in which it operates is by supporting local charitable causes. This was evident in the reception's guest list, which included trustees of the Glen Ridge Educational Foundation and the Glen Ridge Community Fund. The bank had actively supported both organizations before even setting up shop in Glen Ridge.

Boiling Springs' head of lending, Frank Weber, asked my opinion on the current interest rate environment, which we agreed was not easy for savers or community bankers. "Margin compression" is a serious concern for an institution whose funding cannot get any cheaper; at 0.15%, its checking accounts now pay three times the national average rate. Every incremental reduction in mortgage rates reduces the bank's interest margin, for which a higher level of refinancing volume is only a partial compensation. Still, a savings bank that has grown slowly and stuck to its knitting through five decades of financial cycles is not likely to let a little margin compression impede its progress.