When senior management believes in community reinvestment, good things happen. This is the case at Susquehanna Patriot Bank (SPB), which has received top grades for its Community Reinvestment Act (CRA) performance.
Susquehanna Patriot Bank (SPB) is a $2.1 billion bank headquartered in Marlton, New Jersey. It is a wholly owned subsidiary of Susquehanna Bancshares, a $7.3 billion, multistate holding company. It serves six Pennsylvania and New Jersey counties in the Philadelphia metropolitan area and three counties in the Reading and Allentown-Bethlehem-Easton metropolitan areas. SPB has a total of 36 branches: 22 in Pennsylvania and 14 in New Jersey.
Ellen Crain, senior vice president and CRA Officer for SPB, credits Michael Quick, former president of Equity Bank, and now executive vice president of Susquehanna Bancshares, with leading the charge at SPB. He was responsible for implementing a CRA process that included the entire bank. And the new president, David Swoyer, has kept that process in place. All department officers and lenders must demonstrate that they are meeting credit needs in low- and moderate-income communities within their individual business lines. Even SPB’s board is involved in community reinvestment, Crain says, primarily by introducing SPB officers to people in the community.
SPB’s major business lines include commercial loans and mortgages and residential lending. It also provides construction and land development loans and, at a smaller level, loans for multifamily properties. All of these major business lines dovetail with the needs of low- and moderate-income people and communities.
SPB has an extensive record of meeting commercial and residential lending needs in its market area. The specifics are detailed in its 2004 CRA performance evaluation, but three or four community development efforts are indicative of how responsive SPB is to community credit needs. All of the loans, services, and investments were developed in conjunction with nonprofit partners.
For example, for five years SPB worked closely with organizations like St. Joseph’s Carpenter Society, a nonprofit community development corporation (CDC) working in east Camden, New Jersey, to stabilize the neighborhood, improve the housing stock, and increase homeownership. As individuals or families graduated from St. Joseph’s homeownership education and counseling courses, and renovated properties were available for sale, SPB provided mortgages to the prospective home buyers.
To meet the needs of these and other home buyers, SPB offers an array of mortgage products, including the Fannie Mae Flexible 97 and Flexible 100 programs for borrowers who have little or no funds available for down payment and closing costs. SPB also has participated in the Home Buyer Equity Fund of the Federal Home Loan Bank of Pittsburgh (FHLB-P). Homebuyers receive a $3 match for every $1 they contribute toward the home purchase. All home buyers must participate in homeownership counseling before being eligible for the FHLB-P program.
In addition to these programs, SPB offers its own community development mortgage that provides flexible underwriting, low down payments (3 percent), and rate reductions (of ½ to 1 percent). SPB holds these loans in portfolio. Homeownership counseling is required, but there is no private mortgage insurance and SPB does not use FHLB-P’s Home Buyer Equity Fund to match the borrowers’ savings.
The relationship with St. Joseph’s has led to a new opportunity for SPB and the nonprofit. To assist St. Joseph’s in continuing its plans to acquire scattered-site properties and renovate and sell them to low-income families, SPB has provided the nonprofit with a $1 million line of credit. Pilar Hogan Closkey, executive director of St. Joseph’s, reports that this credit facility allows the CDC to act quickly when properties are available and keep construction going as it lines up the subsidy funds to make the units affordable to the target market.
In other metropolitan areas, SPB has financed the acquisition and rehabilitation of small multifamily properties that provide affordable housing for low- and moderate-income families and help stabilize the neighborhoods in which they reside. For example, SPB provided a local housing authority with financing to purchase a 10-unit rental property.
But if asked to pick her favorite community development activity, Ellen Crain talks of SPB’s new relationship with Open Hearth, a nonprofit in Chester County, Pennsylvania, that is promoting asset-building by low- and moderate-income families. The Commonwealth of Pennsylvania has an individual development account program that provides a match for low-income savers, but it does not do the same for moderate-income families. To rectify this situation, SPB has decided that it would offer the match for moderate-income families, and if more money is needed to match more savers, SPB will consider additional funding or ask its fellow bankers to contribute to the pool.
Susquehanna Patriot Bank has demonstrated that building relationships with community partners and having senior-management support for community reinvestment breeds high levels of success for itself and the community.
For information, contact Ellen Crain at (856) 478-2642, ext. 21030, or firstname.lastname@example.org.