ABA Banking Journal - October 2010 - (Page 16)
ABA Community BAnking | nichE banking
COMMUNITY BANK OF THE FUTURE: WHAT WILL IT LOOK LIKE?
Niche in your future?
Doctors, N.Y. cabbies, and “green”—three ways banks sample a niche strategy. Regulators are a challenge
by StEvE cochEo, ExEcutivE Editor
16 | aba banking JournaL | october 2010
im Gray could be described as a “serial banker.” He’s been with, and started, a string of banks. He had sold one with a trust specialty, a few years back, with many doctors and dentists as clients. When some of those professionals came to Gray and his team in 2003 with the idea to start a commercial bank that would serve medical clients, he was intrigued. Today, Beach Business Bank, a $282 million-assets institution in Manhattan Beach, Calif., maintains a service-marked brand, “The Doctors Bank,” that serves practitioners both locally and nationally. This division, representing about 15% of the parent bank’s business, has proven a strong source of core deposits as well as some solid loans. The Doctors Bank serves as a lat-
ter-day, limited example of a strategy once pushed as the future of the community bank—the niche bank. Some of them succeeded, some flopped. Will it fly now? Niches to the right degree Gray never had in mind to wholly specialize in doctors’ needs. “Regulators are never thrilled about niche banking,” he says. Management assured regulators that medical clients were a specialty only. In the wake of troubles arising
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