Newly founded Resurgens bank was opened in Northlake in 2008 “due to the strong consumer demographics, knowledge of the market and large number of small business, especially in the Tucker area”, according to the bank’s CEO Charles M. DeWitt. Resurgens is headquartered across from Northlake Mall and iconic Bambinelli’s Restaurant on the ground floor of an office building. DeWitt, a former SunTrust Bank executive claims that Tucker has more small businesses than any zip code in the Atlanta region. One of the most recent banks to open in Georgia (there are three more recent); the community bank has only to weather the slow-down in business borrowing to thrive here.Positioning Resurgens
The big question is can the smallest community banks succeed in an extended recession with slow borrowing? Maybe, as long as the start-up capital lasts through the “Big R” Recession. FDIC data confirms that the bank was formed with $12.8 million, and Dewitt says it has $75 million in assets. It is one of nine banks opened in 2008, only months after the now-infamous Shearson-Lehman bank failure. According to the FDIC, thirteen of the 98 community banks opened in Georgia after year 2000 have failed—two having opened as recently as 2006.
“My heritage was the old Trust Company” (understood as a conservative pedigree in the banking world), DeWitt confided. He is modestly confident that Resurgens has the right ingredients to succeed. The bank does mainly local loans and has done little construction lending.
The banker says his customers are converts from large banks rather then other community banks and the depositors and borrowers have unique requirements that can best be served by someone who has lived here and understands the community. DeWitt, originally from Chattanooga, has lived off of Briarcliff Road for fourteen years, having become familiar with the area via his wife, who grew up in Hawthorne and attended Lakeside High School. Dewitt serves as a Trustee with Northlake Community Alliance and Senior VP Patrick Putman recently served a term as Chairman of the DeKalb Chamber of Commerce. The bank sponsors Lakeside High School football program and Tucker Youth Soccer.
Last Saturday, Resurgens hosted a "Community Shred Day", doing its part in keeping locals' identities secure from cyber-fraud.
The former SunTrust and Trust Company executive describes his market as a wedge with $4 billion in customer deposits that starts at Morningside (Atlanta) through “submarkets” in Virginia Highlands, Toco Hills, Northlake and Tucker. Anyone along the Northeast I-85 corridor knows that those are all small business centers with specific neighborhoods that are attracted to them. Northlake banks have a higher deposit total than any Resurgens’ target submarkets, with $750 million.
Why Target Lending to Local and Small Businesses?
Community banks strengthen the economy in two ways; they provide a forum where residents and businesses can receive service from a local bank with local values, and they create an investment opportunity for individuals and businesses that want to put their money in a place where it will bring a positive return, while at the same time supporting the community. A 2003 FDIC study concluded that consolidating community banks increased small business loan growth while consolidating large banks resulted in lower small loan growth. The same survey stated, “traditionally, (small business) lending has been local in nature—often to firms having idiosyncratic credit needs and risks tied to the prospects of the local economy.”
What is so important about small businesses and their link to local financing? A survey in Maine found that national retail chains return only 14.1 percent of their local revenue to the local economy, mostly in the form of payroll (compared to over 45% from locally-owned businesses). The survey also found that the local businesses contributed 0.4 percent of their gross revenue to charity. That's four times as much, relative to overall sales, as Wal-Mart gave to charity in 2002, and twice as much as Target gave.
Northlake Area Is Unique
Bank managers in the Northlake Regional Center (the overlay district) have said that there are more millionaires doing business with them than any other of their banks’ branches—including in many other states. They characterize these stingy bank depositors as mostly “millionaires next door”, meaning older long-time savers. In today’s banking environment, that kind of profile might mean a welcome degree of stability.
At the August, 2009 one-year anniversary celebration of Resurgens, I met a 65-plus year old Henderson Road resident in ruffled cloths who surprisingly admitted he was looking for a local bank to deposit over $200,000. It seems he believed in having several banks for shares of a much larger sum. I also met a woman from a nearby well-to-do “ITP” neighborhood who has invested in the bank. The Northlake Mall manager also attended, along with as many people as I would recognize standing in line at an election precinct location.
In so many words, banks in the Northlake/Tucker area are may be in good shape if they can fill a local business borrowing vacuum when the economy recovers—by applying a “millionaire next door” deposit base to the largest concentration of small businesses in the Atlanta region.
Why was the name “Resurgens” chosen for a new community bank in Northeast Atlanta? DeWitt replied, “We wanted a name that was unique (not a First Community Bank type name) but had a tie to Atlanta. As you know, Resurgens is the seal of Atlanta dating back to the Sherman burning his way through the city. We believe Resurgens captures both.”
Tom Doolittle and family are 17-year Northlake residents, children having attended Lakeside High School. The author was the founding treasurer of Northlake Community Alliance, Inc., authored its 501-c-3 application to the IRS for charitable status and incorporation documents with the Secretary of State. He also ran the Northlake Business forum and wrote “The Northlake Romance” column for Community Review/Journal newspapers, contributes research to Henderson Middle School’s Henderson (History) Project and Northlake news to GoDeKalb.com.
I have been meaning to open an account there because I've suffered at the hands of Bank of America for far too long. Reading this may push me over the edge.
ReplyDeleteIt sure seems like someone is scared that this could be a much more interesting investment vehicle for individuals. It is really sad that securities laws are holding back the smaller investors. I think it goes hand in hand with social media. People are scared of it and don't understand it so they try to avoid it. Since they don't understand it they don't think it should exist. We need to educate people.
ReplyDeletesmall business loan