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A Stronger Home Savings Marks 125th Anniversary
YOUNGSTOWN, Ohio -- Mark Cole remembers 40 years ago when his parents took him to the Home Savings and Loan Co. “They walked me in with $5 to open a savings account,” he recalls, and he’s remained a customer.
Cole secured the mortgage to his house from Home Savings and “I have several accounts, personal and business,” the registered representative for American National Insurance Co. says.
The staff at the bank office in Austintown, where he lives, “have always been friends,” Cole says. “You felt like you knew them forever.”
Cole was one of the customers and well-wishers who attended the reception Wednesday afternoon at the Tyler History Center where Home Savings frontline staff, senior management and directors celebrated the 125th anniversary of the venerable Youngstown institution.
The president and CEO, Gary Small, and chairman of the board of directors, Rick Schiraldi, candidly admitted there were moments of uncertainty after federal and state regulators issued cease-and-desist orders about whether the bank would see its 125th birthday.
Having survived and overcome its financial difficulties that became manifest in August 2008, Home Savings has emerged a stronger institution and positioned for growth in northeastern Ohio -- including a bigger presence in Akron and Canton --and western Pennsylvania, Small told The Business Journal. Home Savings has one office in Beaver, Pa.
"The reason we're so very confident in our organization's future is because we're so confident in the Mahoning Valley's future," Small said.
The thrift opened in 1889 in the Excelsior block of downtown Youngstown at the corner of West Federal and Hazel streets. Five years later it moved to the basement of the former Mahoning National Bank, today the Youngstown headquarters of Huntington National Bank, paying rent of $300 a year.
Ten years later Home Savings moved to its third address, 129 W. Federal St., where it remained until moving to 275 W. Federal St. It acquired that site in 1916 but U.S. entry in World War I delayed construction until 1918.
As a savings and loan association, its business was originating mortgages, to help residents of greater Youngstown buy or build their homes. Commercial banks did not offer residential mortgages and thrifts did not engage in consumer banking and commercial lending from the onset of the Great Depression until the late 1970s.
It’s hard to appreciate today the breakthrough thrifts achieved in 1974 when they were allowed to offer checking accounts. Thrift customers didn’t write checks, however. They wrote “Negotiated Orders of Withdrawal” on their NOW accounts, which paid interest.
As deregulation of the financial services industry proceeded in the early 1980s, thrifts entered commercial banking and banks began originating mortgages on a much larger scale. Today the casual observer would be hard pressed to tell the difference between a bank and a thrift. Indeed, in the late 1990s, Home Savings realized that to grow and remain competitive, it needed to convert from a mutually owned financial institution to a publicly traded corporation and so formed a holding company, United Community Financial Corp., in 1998.
In doing so, it also created the Home Savings Foundation, a philanthropic entity that has since given nearly $12 million to community nonprofit organizations such as the Rescue Mission.
As Small noted in brief remarks to the gathering, as part of Home Savings observance of its 125-year history earlier this year, the foundation made 125 contributions of $125 to fill “community requests that rarely see the light of day.”
Of foundation support of the nonprofits and communities Home Savings serves, “That’s going to continue in perpetuity,“ Small promised.
Just how many families Home Savings has helped obtain a mortgage over 125 years is something staff is researching, the vice president for marketing, Colleen Scott, said. “Thousands, for sure,” she offered.
Home Savings originates 2,500 first mortgages a year, Small said, and that’s been consistent over the last decade. As interest rates have fallen, refinancing mortgages has seen that number rise. “Mortgages were our bread and butter,” he noted, and “home equity loans [second mortgages] have also been a good source of income.”
While residential mortgages constitute the largest portion of the Home Savings loan portfolio, Small and his management continue to develop commercial lending relationships. “Home Savings lends $625 million in new loans a year,” Small told the gathering, “and we’re going to see more on the commercial ]real estate] and small-business side. We’re aggressively looking to serve our markets.”
The loyalty of Home Savings customers is among the strongest to any company that does business in the Mahoning Valley. As Schiraldi related, directors and management were concerned about losing customers as the bank continued to report losses quarter after quarter in the wake of the cease-and-desist orders.
The number of customers who transferred their accounts elsewhere “was negligible,” Schiraldi says. That was because “We have an incredible service ethic,” the chairman of the board says. “We get a lot of letters telling us how good our people are.”
Small learned this firsthand after he came aboard and made it a point to visit Home Savings offices to introduce himself and meet the employees. He was impressed by how much the staff cares about its customers, he said. “I spent a lot of time in the branches,” he said. “Customers weren’t shy about telling me what Home Savings has meant to them.”
Some of that comes from a veteran staff who have worked to get to know their customers, Small suggested. “We have more staff with 20 or more years of experience than less than 20,” he said.
Pictured: Enjoying the festivities at last night's reception are veteran Home Savings employee Terrie Bennett, manager of the Struthers bank office; Gary Small, CEO, and 40-year customer Mark Cole.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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