BY LINDSEY SIEGLE
Staff Writer
Last year was a pretty good one for the banking industry. For Two River Community Bank, it was a great year.
According to the Federal Deposit Insurance Corp., the independent federal agency that supervises the nation’s banks and insures all deposits up to $100,000, nationwide banks’ earnings rose about 15 percent. At Two River Community Bank, earnings jumped 68 percent, despite the bank facing its first year as a fully taxable enterprise.
Mike Gormley, the bank’s chief financial officer, explained that in 2002 the bank earned $846,000 and paid $103,000 in taxes on those earnings for a net income of $743,000.
Last year, income before taxes nearly doubled to $1,678,000, but the tax bill jumped to $428,000, making the net income $1,250,000.
"We had used up our loss carry-forward," Gormley said in explanation of the sudden increase in the company’s tax liability.
"Our first full year of operation was 2000," Gormley said. "As with any new business, there were losses [$832,000] as we got the bank started. The second year, we opened another branch and had $169,000 in losses. In 2002 we became profitable and had to start paying New Jersey as well as federal taxes."
Two River Community Bank’s expansion continues to go well, with branches in West Long Branch, on Monmouth Road, and Wall, at Monmouth County Executive Airport, being opened in the last month, according to Barry B. Davall, the bank’s president and chief executive officer.
The bank now has six branches, along with its main office on Route 35 in Middletown. Last year, branches opened in Red Bank and Atlantic Highlands, and the bank’s other operations are in Tinton Falls, on Shrewsbury Avenue, and in the Port Monmouth section of Middletown.
"In West Long Branch we expected to have a good opening, and we did, but in Wall it really surprised us," Davall said. "We had a VIP party for local businesses on Thursday [Feb. 26] and had 150 people come. On Saturday there was a steady stream of retail business. We were a little worried because the branch is not right on [Route] 34, but it seems so far, so good."
Small business customers, like those who came out to the opening in Wall last week, are the customers the bank has built itself on, according to Davall.
He said they respond to the bank’s flexibility and local ties, something that larger banks just cannot offer.
"We live in the community," Davall said. "Our decision-makers are local. At larger institutions, that isn’t the case; decisions are made out of the area. … If something doesn’t exactly fit the needs of our customers, we’ll work with them and make it work for them. A lot of big banks can’t do that."
While the bank continues to thrive by serving the small business community, it is finding other outlets for growth as well.
Davall said the bank is looking at growth in areas of fee income and is establishing a residential mortgage operation, a service which the company has been outsourcing.
"We’re also looking into a joint venture which would put us into the title insurance business," Davall said. "Other than that, the plan calls for doing a lot of the same that has been working for us."
New branches also remain part of the bank’s growth strategy. Later this year a branch in the Cliffwood Beach section of Aberdeen is expected to open, and the company has all the approvals needed for a branch it will build in the southern section of Tinton Falls.
Davall said he hopes to have that branch open in early 2005.