Sullivan County Democrat
Callicoon, New York
March 10, 2009 Issue
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Local banks hanging on amidst uncertainty

By Dan Hust
SULLIVAN COUNTY — If Sullivan County’s banks are any indication, the area may escape the more brutal effects of Wall Street’s ongoing crisis.
Both CEOs of the two banks headquartered here – Jeff Bank and Catskill Hudson Bank – said their businesses are healthy despite what’s being called a recession.
“We’re doing extremely well,” Catskill Hudson CEO Glenn Sutherland remarked this week. “Our growth continues to be great.”
With $215 million in deposits and 11 branches spanning Sullivan, Orange and Ulster counties, the feeling at the corporate office in Rock Hill is cautiously upbeat.
Sutherland thinks the combination of the FDIC’s increased insurance guarantee (up from $100,000 to $250,000) and Catskill Hudson’s customer service have made people comfortable investing their money locally.
The bank has also stuck to tried-and-true principles, like always requiring a 20 percent down payment on mortgages and staying away from investing in Fannie Mae or Freddie Mac.
Plus, “our market is somewhat isolated from the rest of the world,” he added, noting that even with Wall Street just 100 miles away, Sullivan County tends to march to a different economic drumbeat.
Jeff Bank CEO Ray Walter is also positive about his company, the oldest and largest financial institution in Sullivan County, based in Jeffersonville.
“The year-over-year comparison is better than last year,” he said last week. “We’re still well-capitalized after the loss.”
That loss amounted to about $5 million resulting from what seemed at the time to be a good investment in Freddie Mac stocks.
“It was the only equity the bank was allowed to invest in because of its safety and soundness,” explained Walter.
The bank’s chief financial officer lost his job as a result, but Walter pointed out that out of Jeff’s $100 million investment portfolio, “the long-term effect is fairly minimal.”
And with 10 busy branches (an eleventh is planned for the corner of Routes 17B and 55 in downtown White Lake), Jeff Bank remains an integral part of the community.
“Our loan portfolio we feel is strong,” said Walter, noting that around here, the number one reason for foreclosures still seems to be divorces, not insufficient family incomes.
Still, both banks remain cautious.
“It’s a tough environment right now because you have a very low prime rate yet,” Walter observed. “And there’s stiff competition for deposits.”
Jeff Bank has also “put a little bit of a moratorium” on lending for land development, he added, though they continue to welcome mortgages – like Catskill Hudson, at up to 80 percent of value.
As for the future, both CEOs actually see growth.
“Our plan is to continue on a moderate growth strategy,” confirmed Sutherland, who’s looking to expand Catskill Hudson’s presence farther into Orange and Ulster counties. “We’re here to provide a service to our local residents, and I think we continue to demonstrate that.”
“We’re alive and well and looking to expand an office,” said Walter, adding that staffing levels remain the same. “It’s really banking as usual.”

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