hi everyone it's good to see you thank you for joining us on managing your well i'm here holds deborah frasier welcome to our program the goal of our program is to bring timely and relevant information on wealth management topics to  audience and to interview guests who can help impart knowledge there with help you make better and more informed decisions around managing your well our topic for discussion today is the community bank advantage erik larson who is a senior vice president and team leader for business leading for investors is business lending you're such a leader for investors betting and investors bank is one of the fastest growing financial institutions in the new york new jersey area and since going public in two thousand and five the short hills new jersey bait firm has quadrupled in over nineteen billion dollars in assets and assets and they've also raised their headcount over eighteen hundred and most recently they raised another two point two billion in capital and in a moment dominic is going to tell us what the bank is going to do with all that money so by way of introduction though for i guess dominic cam is senior executive vice president and chief operating officer of the bank since two thousand and eight prior to that he was the chief financial officer and he oversaw the initial public offering of the bank and under dominic's leadership the bank has been named as one of the top twenty five publicly traded named as one of the fortunes one hundred top fastest growing companies and as one of the forbes bets banks in america and on the personal level dominic has been named as executive of the year by the raritan bay medical center foundation and he's also been honored as man of the year by the center for italian and italian american culture so congratulations well thank around the country who fortunately listened to what we had to say we liked what we heard and gave us the opportunity to raise over two billion dollars into equity and well and was that year was that your first i p o are have you been involved in one before that was our second i p o actually our first one was in two thousand and five yes and the second one was in two thousand and fourteen in the first one he raised over half a billion  commercial lending presence and central and southern new jersey and i often think of eric as the face of investors bank because he is the person that we see so much in the area he's very active i know we  yeah he said all the golf tournaments and that that was one of the rare ones i got to play and eric has over twenty five years of experience in the banking industry and he also sits on the board of trustees for the hamilton y m c a and the mid jersey chamber of commerce so it works what is it like for you representing the bank and having people think of you as the face of the bank in the mercer county princeton area but it's a lot of fun i really enjoy it's a great organization to work for and senior management supports or so when i came down to this marketplace about two years ago it's a lot of fun and for me i'm actually coming back home i grew up in the princeton area so me coming back to this area was great to see all the changes all the great things going on just it's a lot of fun all the screen so go back to my original question what is going to do with all the capital it raised well debro we're going to continue to grow as you mentioned you know the bank has grown four fold over the last few years and with this new infusion of equity that we have we're going to continue to grow the bank and we plan with the equity that we have to grow the bank to you know somewhere between thirty five to forty billion dollars in total assets well and i read then you may be looking at ak with this in such as a story a bank and valley national b'nai is in the bank strategy because of the way we've grown over the last few years we have grown by acquisition in addition to organic growth we did eight different acquisitions during the period from because the numbers now outnumbers you know you mentioned one thousand billion dollars in total assets you know our latest public documents you know that we're over twenty billion dollars in total assets and you know we need to continue to grow in certain markets here in new jersey and in new york and we think i mean a is a good way to do that ok so the question that everyone wants to know the answer to our banks lending again well i think the banks are lending again i can tell you that investors bank is lending again you know one of the things that you can look at as a ratio if you will is something that bankers normally refer to as the loan to the posit ratio and basically what that tells you is how many deposits banks have supporting loans in our case we have a loan to deposit ratio of about one hundred twenty three percent which means we have more loans the balance sheet than we do deposits and if you look at banks in the northeast you'll find that that is the norm as opposed to different parts of the country where banks are not growing as quickly and are not or in the midwest is probably somewhere between seventy five to ninety five percent ok and competition how would you say competition is affecting your pricing terms and conditions will competition is intense in the new york city market new york metropolitan market what we find is that the competition drives interest rates lower which is better for the consumer but what we're also finding now is with the level of competition that we have that some banks are relaxing certain standards like credit standards or they may be lending more money against a particular property or a business or they may be lending money for periods without principal repayment those are things that generally weaken the credit structure and we try as a bank investor's bank to try to stay away from that you know i saw the we talked a little bit about acquisitions can you speak specifically about what's going on in the in the new jersey area or in southern new jersey area around bank consolidation industry consolidation over the last t as well as national pan in the marketplace was acquired by p b t in addition hudson city finally was sort of sold to m and t back so what you're seeing in this marketplace is a lot of local community banks are being acquired by larger banks and out out of state banks at the same time i know one of the ways i first became aware your presence is when you took a room a bank right yes in this area so with all of the competition in this area why is it so important for a bank like investment bank and other banks to be here it's a great community and the great market with a lot of businesses if you look at the princeton area  quarter with a lot of businesses you also have a lot of deposits in the community with the princeton area in the lawrenceville area and the customer base is very good for the bank to grow and it's a logical progression for the back if you look at we were b to ask you the same question around industry consolidation do you see that consolidation that's going on crease in the certain opportunities for you as a regional thing think consolidation opportunities really pretty soon present a great opportunity for us because this as eric said one of the things that we've look for is to continue to grow our franchise because deposits franchises are built on the posits and what drives the value of any financial institution is the core deposit base you know i often say that lenders you know we can lend money you know every day of the week the difficult thing about running a bank is grazing deposits because people are tied to their bank they like where they bank and it's often difficult to get people to move from one bank to the other so acquisitions is a good right and we have both their operating accounts we're providing with other services like the merchant card processing if they have that and then we have the individual himself the business owner his personal accounts his family and then the employees of that organization as well through like a workplace tracking program that we offer special things for the business owners employees so there's different ways you can look at that so it's typical relationship is really a total relationship with the customer is there any type of specific industry you know we look at everything there ask him and the bank has many has a number of divisions in the business lending front and so we we specialize not only in small businesses in local communities but we go all the way up to businesses that generate you know eighty to one hundred million dollars in revenue which we refer to as a middle market business ok ok and can you name some of the other products and services you offer you know you have commercial banking i believe you have an advisory arm also and yet so we are we offer typical bank products deposit products lending products and in the lending and lending front we   we often will lend money to individuals or companies that own real estate we do industrial lending for example along the new jersey turnpike you know if you take that eight a corridor or there are lots of warehouses there we love that business and lend a lot of money in that area the commercial real estate business as well as trying to refer to ok before you said the key word relationships so some people think more things for them we can provide them better pricing you know we can not stretch the terms outside of our comfort zone but to look at things differently because we understand what's going on a little better with the person you know the more you know someone the more you can do for them without that and having that relationship and it's a transactional thing if the and help the bank and then we look at the mix of the deposits not only do we look at the loans but we look at the deposits and work on the relationship we have with you with respect to that and what do you really well you know i agree with eric and i often will say at loan committee meetings that one of the c's of credit is character and you know you can look at a customer's ability to repay you can look at their business their cash flows but you really have to learn who they are as a person and their character and character tells us a lot about a person and i can tell you you know  rt from the competition well you know it it's it's an interesting question because we will often talk about the fact that banking now has become a commodity you know you can go from bank to bank to bank and everyone offers deposits and loans and all of the products that we offer as a bank we try to differentiate ourselves obviously as eric said with nurturing a relationship but one of the areas that we also try to focus on is the community we believe it is out sincere responsibility to be part of the community you know as part of our or as part of our public offering in two thousand and five and then the second one in two thousand and fourteen we were able to ask our shareholders and they approved us contributing twenty million dollars of the proceeds from the public offering to a foundation so in two thousand and five we contributed twenty million dollars we used stock as the primary fund funding that stock tripled in value and then in two thousand and fourteen we felt that the community the charitable foundation did so much for our business as well as the communities in new york and new jersey that we asked the shareholders to give us another twenty million and they did and we have now have a foundation that's worth approximately sixty five million dollars and we believe that we can really have an impact on the communities that we serve and we also take a very grassroots approach to our fund our funding for communities yes we do write out checks to the large national organizations but what we really enjoy is putting now money at work in the communities along with out people well you know let's take a look at some of the slides you brought with this and did this i mean pick your say a thousand words right so tell us what some of the different community individuals at the soup kitchen you know one part of that they should also realize is during our onboarding what we do is the employees have a three day on boarding and on the third day they have to spend half the day of the soup kitchen volunteering really that's part of the corporate culture who came up with that do you know that came up with the actual hour out culture department where they put together the onboarding program they realized how important that is to the organization and therefore they put the part of  amazing so they wanted to instill the principles right away yes what were you on that first picture thing maybe i do a song on the first ok and what is this this is cleanup at the beach yes we have volunteers go down to the beach and help clean up every year just from the debris over the winter and just kind of the bridges how were you involved with superstorm sandy we did various programs with the beach cleanup down there as well as part of that one day we spent the day at the beach picking up all the debris on the beach and bagging it up for the summer there was a clear example of how grassroots approach what we did as a bank and when we regrouped after hurricane sandy the first thing we did was look around our employees to make sure our employees were safe second we looked around our communities to find out who really needed us and what we test all of our folks to do is go and find organization that need our help right now who's making sandwiches for or breakfast for volunteers how can we help ourselves and you know i have to say the bank pulled together as an organization and as a community and really worked together with the communities to make cleaning up superstorm sandy a little bit better so we have a major driver like that if i can it's easy to see how you prioritize behind you prioritize which organizations you're going to help and which events you're going to participate in beyond something like a suppressed storm sandy well we generally will allow our regional people you know the folks who are in the community to come up with their recommendations on who to support as you point out their own you know once your reputation gets out there is being is philanthropic is where you are you know they're always along the lines we try not to turn anyone away because we believe that allowing our regional people and how people who are out new communities to be a leader in that organization really does not only a lot for the bank but it does a lot for the individual you know for example eric has come up with a number of events that he supports personally and we believe that for someone like eric to give his time personal time that as an organization we should support him with what we call the treasure well that really is why he's here and his role is to be a part of the community and so you want to follow his best advice he's the eyes you have lot of the employees will find in their local communities with their branches that they'll go once here and clean up a park for whatever reason but they're out there helping clean up the parks and i think green and then our next slide is lawrenceville main street retail network ok ok so we have a few minutes left so west tells you one question though about the state of the economy slow down what are your thoughts about the state of the economy and what should you know if we go to new york city and we go to the immediate area around new york city you know the economy is thriving real estate prices have come back you know people up back to work you know unemployment numbers were much better last week but as we start to move outside that us center of the universe so to speak it starts to deteriorate a little bit more and what i mean is that as we go further and further away from these epicenters you know people are struggling more and even today due to wage earner you know the husband who's a police officer with the wife was a nurse they're still having a hard time making ends  meet the economy has up and down i mean that's one of the reasons why the federal reserve has not raised their interest rates as of yet and they continue you know they see some positives and then right behind those are some negatives and so as i think about the economy i say yes the economy has improved to some degree certainly from where it was back in two thousand and eight to two thousand and eleven but it's not here yet right and even the housing market is bobbie is great here but if you go west it's still depress if you go south is still depressed that's right that's right it what about the global economy what impact is that happening on on our national economy you know these days not these days over the last ten years the global economy has had a much bigger impact on what's happening here in the united states you know recently we saw that despite the u s economy growing with the european economy in a in a in a slump that affected our own interest rate environment because despite where we were as an economy people thought it was still better than being in europe or in some of the eastern part of the world where we're so interconnected this give me what would you say is the bill biggest challenge facing your bank right now well clearly for us it's our ability to continue to grow deposits and for our deposit franchise you know as i said you know eric and his teams down here and out teams in the new york and north jersey area are doing a great job being able to lend money but we need good core deposits and we need branches that have strong deposits to continue to fund the bank and so when i look at that as a challenge that to me is the one thing that keeps me up at night and i know you have a headcount target of four thousand employees how close are you now to the old guard well these days we have approximately eighteen hundred employees and so it's going to take a little time to get to four thousand and i'm sure you will quickly just a few we're seconds we have contact information with eric and linda here if people would like to get in touch with you would you like to have just any final comment that something you would like our viewers to know or to think about with investors think yes i would first i'd like to again thank you for allowing us to be here with you today i think it's been a great experience for us and i would just say to folks out there who have never heard of investors bank give us a try to come into one of our branches and find the difference when we use a protocol called  warm welcome and a fond farewell we take pride in what we do and look forward to building a relationship with many of our customers and i think anybody who comes here investors bank is it relationship based but i think you'll find that the employees and the organization support everyone that is with the organization as a customer as an employee they are behind you and they're there to help you as well as grow with you and on that note we are going to