ABA Banking Journal - September 2009 - (Page 14)
Community Banking Pass the Aspirin: Holding down people costs, p. 17 Want to “prescribe”? E-mail to email@example.com Billboards, web, Twitter spearhead bank’s comeback SpurTheEconomy.com, Royal Bank America’s special small business website, aims to help the bank reduce CRE concentration ommunity banks venturing into social media remain a minority of the industry, and those using Twitter represent a smaller slice of the pie yet. Many are simply dipping their toes. But at Pennsylvania’s Royal Bank America, management has moved into Twitter and a related website in a big way. How big? Billboard-sized big. C estate lending specialist. At the end of 2008, the bank’s portfolio of nonresidential real estate and construction loans represented 71% of total loans. “It was a market that we knew and understood,” says Robert Tabas, chairman and CEO of the bank, and son of Daniel Tabas. However, as commercial real estate and construction and development began to deteriorate, the bank’s results began to sufA need to shift the message fer, and management came to realize diversification was needed. This marketing effort came about as the result of a major change While this was seen in 2007, some of what was already in place in the bank’s circumstances. Royal Bank America is the $1.14 in the bank’s loan and investment portfolios had already planted billion-assets main subsidiary of Royal Bancshares of seeds of trouble, and 2008 saw a large loss of $38.1 million. Pennsylvania, based in Narberth. Its prime markets are in south- Among the reasons: a significant rise in loss provisions due to a eastern Pennsylvania, as well as New Jersey. higher level of nonperforming loans; impairment losses on mortSince the 1980s Royal Bank, publicly traded today, was under gage-related securities and losses on other securities; falling the control and active management of the Tabas family. Dan interest income due to the substantial variable-rate lending done Tabas, who died several years ago, was patriarch of a clan active by the bank; and the payout of the former president’s contract in commercial real estate development, hospitality, and enter- when it was decided to make changes in the management team tainment—notably dinner theatre locations—and it was a natur- effective at the end of last year. al development that the bank evolved increasingly into a realWhile this was going on, regulators stepped up their involvement, culminating in a consent agreement with FDIC and the By Steve Cocheo, executive editor. This article originated when Pennsylvania Department of Banking that was announced in ABA Banking Journal tweeted, “What’s your favorite bank web- mid-July 2009. The order addresses agreements to reduce classisite?” You can follow us on Twitter at ABABankingJourn. Share fied assets, to preserve capital, and more. Plus mutual recognition social media strategy—or web favorites—at firstname.lastname@example.org of the need to diversify away from commercial real estate led the 14 SEPTEMBER 2009/ABA BANKING JOURNAL Subscribe at www.ababj.com
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