Clifton Journal
October 21, 2011

Passaic County Board of Chosen Freeholders announced that Passaic County Department of Economic Development and William Paterson University Small Business Development Center will sponsor a free seminar for Passaic County companies Wednesday, Oct. 26 from 8:30 a.m. to noon.

The seminar topic is “How to Secure Financing to Expand and Survive in a Challenging Economy” and will be held at William Paterson University, 1600 Valley Road, Wayne.

Speakers will include Passaic County Freeholder Director Terry Duffy and Freeholder Bruce James.

Kathleen Muldoon, director, William Paterson University Small Business Development Center, will discuss business planning and finance.

Bradley Thomson of TD Bank will discuss securing a conventional business loan.

Albert Traverso of Sax, Macy, Fromm & Co. will discuss how your accountant can expedite the financing process.

Margaret Piliere, regional director, New Jersey Economic Development Authority, will discuss business financing.

Ed Haddock of U.S. Small Business Administration will discuss financing programs for small businesses.

Ted Bossert of N.J. Business Finance Corporation will discuss SBA 504 loan program and Paula Star of UCEDC will discuss the micro loan program.

Participants will have the opportunity to meet invited bankers from Atlantic Stewardship Bank, Bank of America, Capital One, Columbia Bank, Freedom Bank, Lakeland Bank, M&T Bank, North Jersey Federal Credit Union, JP Morgan/Chase, PNC, Spencer Savings Bank, Sun National Bank, TD Bank, Valley National Bank and Wells Fargo.

Refreshments are provided courtesy of TD Bank.

Companies interested in attending should RSVP to Deborah Hoffman, director, Department of Economic Development, 973-569-4720 or ecodev@passaiccountynj.org.

By Richard Newman/The Record
October 20, 2011

Pascack Bancorp Inc., the holding company for Pascack Community Bank, said Wednesday that it has repaid the $3.9 million it received in 2009 from the federal government’s Capital Purchase Program, a component of the Troubled Asset Relief Program, or TARP.

The bank, which has seven offices in Bergen and Essex counties, said it used a portion of the $8 million it raised this summer through a private stock offering to repay the government.

The company paid 5 percent annual dividends to the Treasury while it held the funds, said Bruce Meisel, Pascack’s president and chief executive officer.

“The board and management believe this is the appropriate time for the company to exit the Capital Purchase Program, and thereby reduce the regulatory and reporting burden imposed on the company under TARP,” Meisel said. The capital infusion helped the bank fund nearly $45 million in new loans, he said.

Bankers have complained about the increased regulatory oversight that comes with TARP, and the 5 percent dividend payments are relatively expensive at today’s rates.

By Richard Newman/The Record
October 19, 2011

Fast-growing North Jersey Community Bank in Englewood Cliffs is expanding its reach beyond North Jersey.

CEO Frank Sorrentino hosted a ribbon cutting ceremony Wednesday at the company’s eighth office, in Holmdel Township in Monmouth County. Its other branches are in Cresskill, Hackensack, West New York and Ridgewood and Fort Lee – where it has two.

Sorrentino said the six-year-old company chose Holmdel because it already has banking relationships with small businesses in Monmouth County, including doctors and contractors.

Holmdel, with a population of about 15,000, has median household income of more than $138,000.

Also, “There’s not a lot of competition there from community banks,” Sorrentino said.

The only other banks with branches in Holmdel are much larger national and regional players. PNC Bank is the top deposit holder with a 37 percent market share.

“We are not opposed to competition,” said Kevin Tylus, PNC’s regional president for central New Jersey. “Our retail and business bankers fare very favorably in community-type banking,” Tylus said.

North Jersey Community, formed in early 2005 by an investment group that included Englewood Cliffs Mayor Joseph Parisi, Jr. to serve local developers and small businesses, is one of the few community banks in the area to expand in a sluggish economy, taking market share in commercial real estate lending from larger banks that have been reluctant to lend.

Assets increased 9 percent in the first half of the year to $656.2 million, on loan growth.

North Jersey, which has not yet reported third quarter results, earned $4.7 million last year and $3.2 million in the first half of this year.

By Eliot Caroom/Star-Ledger
October 17, 2011

State officials yesterday closed Cranford-based First State Bank and the Federal Deposit Insurance Corporation announced Northfield Bank of Staten Island will take over so customers won’t lose access to their money.

It was the first New Jersey bank closure in about a year, said Department of Banking and Insurance spokesman Marshall McKnight.

“This has been an issue that’s gone back a couple of years,” McKnight said, adding banking regulators had issued several orders to the bank.

First State Bank, opened in 2006, had two branches, in Cranford and Westfield. A statement from DOBI late yesterday said that both branches will reopen today as branches of Northfield Bank and depositors of First State Bank will automatically become depositors of the Northfield Bank.

“Unfortunately, First State’s poor asset quality made today’s action necessary to protect consumers,” said DOBI Commissioner Tom Considine. “First State Bank’s sale to Northfield is a good result and this transaction will be completely seamless to First State Bank customers. While we never like to see a bank close, this was the best option.”

The choice of Northfield Bank to run First State was made by the FDIC, McKnight said.

“We are pleased to welcome First State Bank customers to Northfield and believe they will benefit from being with a well-capitalized institution, strategically focused on the marketplace, that offers a wide range of innovative business and personal financial products and services,” said John Alexander, chairman and CEO of Northfield Bank in a statement. “Our team is working closely with the FDIC to ensure a smooth transition for First State Bank deposit and loan customers.”

Northfield already has 21 branches in New Jersey, Staten Island, Brooklyn and Manhattan.

“Most of the banks here in New Jersey are adequately capitalized,” said McKnight. “We continue to monitor our state-chartered banks.”

The FDIC also announced yesterday the closing of banks in Georgia and North Carolina, bringing the number of bank closures this year to 79.

By Beth Fitzgerald/NJBIZ
October 17, 2011

The failure Friday of the two-branch First State Bank, in Cranford, and its takeover by Northfield Bank was the 79th nationwide for the Federal Deposit Insurance Corp., but the first this year for New Jersey.

The $201.2 million deposit First State Bank was state chartered. Marshall McKnight, spokesman for the state Department of Banking and Insurance, said “the state-chartered financial institutions that this department regulates are largely well capitalized and operating normally. The department continues to closely monitor our state-chartered financial institutions for safety and soundness.”


John E. McWeeney Jr., CEO of the New Jersey Bankers Association, echoed that sentiment. “By and large, the New Jersey banks are in a strong position, and have weathered the recession and the financial crisis quite well, compared to other regions around the country” like Florida, Nevada and California.


“Our banks are well capitalized,” McWeeney said, citing recent figures from the FDIC that put the total capital of the 117 banks with New Jersey headquarters at $16.6 billion, compared to $14.9 billion on Dec. 31, 2008. He said since 2008, the number of New Jersey-based banks has declined from 126 to 117, though “the capital levels have increased.”


He said a significant share of New Jersey bank deposits are held by large banks based outside the state, like Bank of America and Wells Fargo.

“What you are seeing is consolidation, and we anticipate there will be continued consolidation as we go forward,” McWeeney said. “If you go back to the ’80s, there were about 20,000 banks (nationwide), and now you have about 7,800. That trend will continue, and it concerns us because it’s really important to have community banks be part of the system. They play a vital role.”

By Kirsten Grind/Portfolio.com
October 14, 2011

If you were waiting for a sign that small business—and not Wall Street—is the economic growth engine of the United States, here it is. 

Bank of America was all over the news Thursday (a common occurrence for the country’s largest consumer bank these days) after it announced it would slash 324 Wall Street jobs, including investment bankers and equity traders. The cuts are part of the 30,000 jobs Bank of America plans to cut to shore up its financial position. 

But what went largely unreported is that Bank of America also is hiring—small-business bankers. The bank will hire 90 new employees to work at its branches in New York, New Jersey, and Connecticut, part of 1,000 new small-business bankers it will bring on board by the first part of 2012. 

“Despite the fact that we have talked about streamlining our operations and have announced job cuts, we’ve also said that in areas of growth, we’ll continue to invest,” said Bank of America spokesman Dan Vecchiarello.

A thousand new jobs doesn’t cancel out the 30,000 jobs Bank of America will cut, and the bank is certainly suffering. Its third-quarter earnings next week are expected by analysts to be 26 percent lower than last year, according to Forbes.

Still, Bank of America’s decision is an interesting observation on where the economic growth is located in the United States. By laying off investment bankers, Bank of America is essentially saying that it’s not happening at larger companies. 

“We think there is an opportunity in small business,” Vecchiarello said.

By Richard Newman/The Record
October 14, 2011

New Jersey’s credit unions, locked in a perennial turf war with banks, ramped up their marketing efforts this week to present themselves as potential job creators as they try to get the federal government to ease business-lending restrictions.

The New Jersey Credit Union League on Thursday started running online and radio ads to garner more support for proposed legislation that would more than double their statutory business lending limit to 27.5 percent of assets from 12.25 percent. New Jersey’s 1.2 million credit union members are “ready to help put America back to work” says one online ad.

“We are hoping New Jersey lawmakers wake up to the reality that small businesses need help,” said Paul Gentile, president of New Jersey Credit Union League. “We have a number of credit unions that cannot lend anymore.”

Four of New Jersey’s 15 U.S. representatives, including Democrat Steve Rothman of Fair Lawn, have signed on as co-sponsors of the bill, known as the Small Business Lending Enhancement Act.

Bankers trying to block the bill argue that raising the cap would give the non-profit cooperatives an unfair competitive advantage because, unlike most banks, they do not pay federal income taxes and are not subject to community reinvestment requirements.

The cap has been in place since 1998 and for years credit unions have been trying to have it raised. Now with tighter bank credit for small businesses, the bill is “gaining momentum,” Gentile said. It is unclear if and when it may be voted on by the House and Senate, he said. A subcommittee hearing was held Wednesday in the House.

Industry observers say the weak economy combined with large banks’ reluctance to lend and a tendency to raise fees presents an unusual opportunity for credit unions to expand their market share. “This is an environment with a unique economic climate that is very different from what we’ve seen in the past,” said Greg McBride, senior financial analyst for Bankrate.com. “At a time of serious long-term unemployment, anything that helps move the needle for job creation among small businesses is likely to gain support.”

The Credit Union National Administration estimates that raising the business loan cap would inject $13 billion in new credit for small businesses into the ailing economy and add 140,000 jobs within the first year of enactment — at no cost to taxpayers.

Credit unions, which generally have lower checking and ATM fees than banks, are also out to get checking-account customers from big banks.

By Harvey Lipman/The Record
October 14, 2011

Eleven non-profits in Bergen and Passaic counties received federal grants of as much as $75,000 each to be used to improve security at their properties, the Christie administration announced Thursday.

Most of the 27 organizations statewide that got Department of Homeland Security funds are synagogues, yeshivas and other Jewish groups.

Several hospitals also are sharing in the more than $1.8 million allotted across New Jersey.

The grants must be used for “target-hardening” activities according to federal regulations. Those include the purchase and installation of security equipment and security-related training programs for organization workers.

Several of the hospitals received grants because they’re part of the emergency response systems that would be charged with helping respond to a terrorist attack. The Jewish groups are classified as maintaining sites “with symbolic value” that make them “attractive targets.”

Overall, the government gave out nearly $19 million in grants this year to organizations located in what it has designated as 31 “high risk” urban areas. This year’s grants total $400,000 more than Homeland Security gave to non-profits in New Jersey last year.

Determining which groups receive the funds is a joint state and federal process.

“The organizations submit the grant applications to us,” said Dominic Rota, spokesman for the state Office of Homeland Security and Preparedness. “We review them, score them and send them to the Department of Homeland Security.”

TRENTON, NJ – Governor Chris Christie today announced that the State of New Jersey has been approved by the U.S. Department of Treasury for $33.8 million in funding through the State Small Business Credit Initiative (SSBCI), part of the federal Small Business Jobs Act of 2010, to encourage small business lending and job creation in the state. The intent of the SSBCI, which is to create jobs and strengthen state lending programs, mirrors New Jersey’s recent efforts to enhance its support of the state’s small business community.   

“Small businesses are the job creating engines of New Jersey’s economy and we’ve made support for small business a top priority through targeted tax cuts, regulatory relief and lending programs,” said Governor Christie. “This funding being made available through the State Small Business Credit Initiative will strengthen our ongoing efforts to help small businesses succeed and grow in our state and create good paying, lasting jobs for New Jersey families.” 

Governor Christie has made economic development a top priority by ensuring that New Jersey becomes a business-friendly state. Through the New Jersey Partnership for Action, under the direction of Lt. Governor Guadagno, the Christie Administration has implemented an aggressive economic development agenda, including overhauling state government’s regulatory system and reducing the red tape that stifles economic growth and imposes costs on businesses and citizens. The Governor’s Fiscal Year 2012 Budget provided for $185 million in targeted, job creating business tax relief and incentives to spur growth. When fully phased in over 5 years, the Governor’s tax policy changes will provide $2.35 billion in job creating tax relief. By implementing these policies, Governor Christie has ensured that New Jersey will once again be “Open for Business.”  

The funds from SSBCI will be received by the New Jersey Department of Treasury in three tranches over two years, based upon at least an 80-percent commitment of the first and then second distributions. Through a Memorandum of Understanding, the New Jersey Economic Development Authority (EDA) will use the funds to deploy loans, credit guarantees and loan participations through its existing small business lending programs, and to make a venture capital investment. Funds will be targeted to small businesses, small manufacturers, and women and minority-owned enterprises, with a particular focus on businesses that are located in underserved communities throughout New Jersey.   

As part of this effort, the EDA Board today took action to enhance its portfolio by expanding access to capital for small businesses. The Board approved an increase in the funding available through the EDA’s Fund for Community Economic Development (FCED) to support micro lenders, Community Development Financial Institutions and Urban Enterprise Zones that have a successful lending track record in their local communities. Under the “Loan to Lenders” component of the FCED, organizations with a successful EDA history will now be able to qualify for up to $750,000, an increase of $250,000 from what was previously available; new customers may qualify for up to $500,000. The loan term has been extended to up to 15 years, with interest-only payments for up to five years. Previously, terms were available for up to ten years, with interest-only payments for up to three years. Additionally, the use of funds has been expanded to also include lines of credit.   

“As the state’s ‘bank for business,’ the EDA has a successful history of partnering with financial institutions to leverage its resources and ensure small businesses have access to the capital they need to remain and grow in New Jersey,” said Lt. Governor Guadagno. “By utilizing EDA’s existing partnerships within the lending community, New Jersey will be able to strengthen its current portfolio of assistance and help our small businesses secure the funds they need to expand and create jobs.” 

For information on EDA’s small business programs, visit http://businesslending.njeda.com. To learn more about opportunities for business growth throughout New Jersey, visit the state’s business portal at www.NewJerseyBusiness.gov or call the Business Action Center at (866) 534-7789.

By Dan Serra/McClatchy-Tribune News Service
October 12, 2011

Small businesses are the lifeblood of the American economy.

And the people who run them are the heart that pumps out successful stories. But the small-business owner is also at risk.

The number of people who are self-employed is down by 2.1 million since 2006, according to the Bureau of Labor Statistics. The struggling economy makes it harder for individuals to start or grow a business.

But another factor that hampers a small business is the lack of a plan.

Small-business owners can be so busy trying to start or keep their business going that they have little time to plan for the future.

The lower number of self-employed could also be attributed to the lack of planning for handling difficult times.

Here are some essentials for small-business owners to plan to increase their chance of success:

• Funding: Most need to make sure they have saved enough to help them get through slower sales periods.
• Insurance: Some have failed because of not being adequately insured to pay for losses from a disaster. Business insurance and life insurance for the owner are essential to keep a business going.
• Savings: Piling money in the bank or making investments to create future funding is important. Not all the profits need to be spent when business is going well. Owners should also make sure they are saving enough in retirement accounts.
• Succession: About three out of five small business owners do not have a succession plan in place for retirement or death.
• Taxes: How and when money is earned and spent can affect income taxes. Working with a tax planner can help small-business owners put the tax laws on their side.
• Processes: To keep a business running smoothly, especially when the owner is away, having written processes can help anyone perform tasks consistently and on time, creating happier customers.
• Strategic initiatives: Every year, a business owner and any employees should meet to discuss what goals are to be accomplished for the year. Goals that are written down have the best chance of being met.

A small-business owner needs to do more than open the door in the morning, serve customers and close the door at night.

Working with financial experts who specialize in helping small businesses can pay off and prepare a business owner for most economic challenges.