PHILADELPHIA -- The goofy stuffed gorilla in the tiny storefront at United Valley Bank somehow commands attention in the forest of steel in downtown Philadelphia.
The gorilla -- representing the bank's "guerrilla initiatives" for bending over backward to help customers -- shares the display-case window with rice pudding and barbecued beans made by a United Valley customer. People on the busy street stop to look.
"I've got to be outrageous to stand out," said Thomas J. Lynch, United Valley's chief executive. "There are eight de novo banks in this city all competing for my business."
Staying Nimble
In this crowded market, where the recent recession burned banks into a kind of numbed standstill, Mr. Lynch, 53, is intent upon keeping his bank nimble and entrepreneurial. And in his unique marketing and business development style lies the reason that United Valley has weathered the storm that engulfed so many start-ups in East Coast cities during the late 1980s and early 1990s.
United Valley had a 1.2% return on its $104 million of assets in the first quarter, a performance that puts it slightly above its peers in Philadelphia. Its loans have grown in each of the last four quarters, both in terms of total dollars and as a percentage of deposits -- a trend that reverses the record of almost all its competitors.
Its nonperforming loans, however, at 2.3% of total assets, also exceed the peer average.
Mr. Lynch's pluck is the kind that led him to string up a $50 banner over his downtown office in the fall of 1990 that blared: "To hell with the recession. Let's do business!" Photos made the local press.
Devotion to Business Clients
Unlike many downtown de novos, United Valley doesn't present itself as a posh, insider-dirver bank for the superrich. Mr. Lynch said he sees his bank as a lean, responsive organization that is devoted to its business clients' interests first.
In fact, United Valley has become a kind of laboratory for Mr. Lynch's long-held ideas about how to treat business clients. These ideas were generated during a 32-year career, four of them as a senior executive at the big Fidelity Bank, but were never fully tested until he became chief executive at United Valley in 1989.
"As bankers, we seem to have an inbred fear of failing," Mr. Lynch said recently over a deli sandwich in his bank's sparse board room. "We get hung up on it. Well, you've got to experiment. You can't be afraid to fail if you want to be a success."
At LaSalle University in Philadelphia, he studied industrial relations, and some of the courses, he says, "bored me to tears." As an upperclassman, he spent more and more time on extracurricular activities like student government.
'Great Innovator'
His student government office was right across the hall from where companies would set up to interview seniors for jobs. He never made it to the sign-up sheets early enough to get a time slot for an interview, but he managed to buttonhole a few executives as they were packing up after a day of interviewing.
And that's how he landed in the training program at Industrial Valley Bank, a small but aggressive commercial bank when he came on board in 1962.
"He was a great innovator," said Joe Gallagher, who first interviewed Mr. Lynch and later became chief executive of Industrial Valley and Mr. Lynch's mentor. "He built great realtionships, and he loved customers. You know, some guys who act like Tom have a wonderful facade, but it wears thin after a while. But Tom is just not like that."
He rose through the ranks and in 1979 became head of commercial lending and retail branches at Industrial Valley. In 1985, Industrial Valley was sold to Fidelity Bank, then a $7 billion-asset insstitution. he became head of community lending -- in charge of Philadelphia-area business lending and private banking operations.
Comfortable Surroundings
"I though I'd made it," Mr. Lynch said of his years at Fidelity. "There were chandeliers on the ceiling, Persian rugs on the floors." But Mr. Lynch said he felt stifled and had little patience for the minutiae such a large bank imposes on its managers.
United Valley was founded in 1988 by a group of enterpreneurs -- accountants and lawyers, and owners of small factories and leasing companies. The bank went through three presidents in its first year and laid the groundwork for serious loan losses in 1989 and 1990.
Mr. Lynch admits that he approached the job with fear.
United Valley's board had a reputation as one that "ate presidents for lunch," said a United Valley competitor, who wished to remain anonymous. "Someone approached me for that job, and I wouldn't touch it. They were having operational and credit problems. It was hard for me to fathom why Tom Lynch gave up his job for it."
But five years into the job, Mr. Lynch isn't scared of the board (he never was, after meeting the directors), he's one of them. He sits on the board's executive committee, owns stock, and appears to have a free hand.
There are no real layers of management: Directly below Mr. Lynch are the chief lending officer and a group of lenders. Just outside Mr. Lynch's office is the bank's tiny employee lounge and desks filled with back-office employees.
Everything that can be outsourced is outsourced. United Valley employs just 26 people.
Portfolio Cleanup Came First
Mr. Lynch spent his first year and a half cleaning up the bank's bad credits, taking a $1 million writeoff in 1989. He closed the bank's Wayne branch, a chronic money loser, and concentrated on its small but highly visible downtown office.
In 1992, Mr. Lynch began formalizing into a concrete program a host of little things that he had always wanted to do at Fidelity. By themselves, they aren't such a big deal. Taken together, they paint a picture of a bank that tries desperately to live up to its promises.
The board has a group of advisers that will lend its weight to any client. Called the Champion Committee, its members will make a call on a zoning problem or try to untangle red tape.
Every banker at United has the home phone number on his or her business card, and part of the job description is meeting with clients on demand -- including nights and weekends.
The bank absorbs all automated teller machine costs and will even reimburse customers the cost of small payroll accounts at other banks so that they can cash their checks near the office.
He gives away weekends in Atlantic City to employees who go above and beyond the call of duty to help a client. He also gives loan officers incentive pay for drumming up new business.
If this doesn't sound like textbook bank lending, Mr. Lynch insists his underwriting procedures are solid. And he notes that, despite incentive pay for loan officers, he and chief credit officer Eugene F. Zuecca make the final loan decisions.
