When he ran New York's Green Point Savings Bank, Michael J. Gagliardi had a marketing staff to handle the thrift's advertising.
But as chief executive officer of Ironbound BankCorp in Newark, N.J., Mr. Gagliardi himself designs and writes the $112 million-asset bank's ads- in English, Portuguese, and Spanish.
"It's harder to run a small bank than it is a large bank," Mr. Gagliardi said. "At a large bank, you can just go to any of these experts for advice, whether it be computer, branch, or lending. At a small bank, you're everything."
Mr. Gagliardi likes being "everything" at Ironbound, a 10-year-old community bank in Newark's ethnic Ironbound neighborhood.
Since joining it four years ago, he and his staff have managed to reverse the fortunes of a bank that wasn't making money.
Typically, a start-up begins making money in its fourth year. But Ironbound would have posted losses in 1991, 1992, and 1993 if it hadn't made gains on the sale of securities.
The bank's asset quality was weak, and it struggled under the weight of an unwieldy 18-member board, Mr. Gagliardi said.
But by 1994, the board was slashed to nine people. The new management pursued delinquent borrowers and started actively going after new loans.
"It's just a matter of plugging away at it," he said. "There's no secret formula."
Ironbound ended last year with a respectable 1.14% return on assets and 11.68% return on equity. Net income increased 49% in 1997 to $1.26 million- smashing the bank's goal of $1 million.
"We first had to get income squared away," said Thomas R. Lupo, Ironbound executive vice president and chief loan officer. "We think this is now a nice time to begin our expansion program."
With about 14% of the commercial bank deposits in the Ironbound section, the bank lags larger competitors such as First Union Corp. and PNC Corp. The neighborhood, an area of little more than a square mile bounded by railroad tracks, is home to about 90,000 people, many of whom are Portuguese and Spanish immigrants.
Ironbound plans to open its fourth branch late this year in Union County, N.J., and possibly another in 1999.
"We're in the process of moving out beyond the Ironbound community," said Edward Cruz, Ironbound's chairman and founder. "We want to move where the neighborhood people have moved."
The bank's target market is the area's thriving immigrant population, particularly small-business owners. Front-line employees speak Portuguese and Spanish, as well as English.
The bank's focus will remain on catering to locals who need commercial loans, mortgages, and consumer loans, Mr. Gagliardi said.
"All our deposits are generated locally, most of our loans are generated locally," Mr. Gagliardi said. "We are a community bank."
Mr. Gagliardi and Mr. Lupo were hired at the same time. Both had been interviewing for the top job. Mr. Gagliardi, 57, said it was his gray hair that got him the job over Mr. Lupo, ten years younger. He said image and age are very important in the Portuguese community.
The two men said there were no hard feelings. In fact, they said they knew right away they would work well together.
Mr. Lupo, a community banker for 29 years, brought needed small-bank experience to the mix, Mr. Gagliardi said. Mr. Lupo had expertise in commercial and consumer lending, and branch operations.
Mr. Gagliardi brought marketing, mortgage lending, and strategic planning skills from his experience at Green Point.
He left $14 billion-asset Green Point in April 1993, shortly before it converted from mutual to stock ownership. During his tenure, the Brooklyn thrift ranked as one of the highest-earning, fastest-growing institutions in the state.
Mr. Gagliardi would not discuss his departure from Green Point. But at the time, sources said he quit after a bitter dispute stemming from his opposition to the thrift going public.
After he left, Green Point's $800 million conversion turned controversial. After a challenge from depositors, New York State regulators cracked down on Green Point executives who had gained $40 million in stock and other incentives from the deal. State regulators forced the company to develop a business plan to reinvest in the community $1.5 billion in capital raised from the conversion.
Though Mr. Gagliardi escaped the controversy, some bankers in New York still questioned why he would go to a small community bank. He said he has never regretted the move.
"I think it was the right move for me at the right time of my life," Mr. Gagliardi said. "When you work for a small bank, you really feel like you're trying to do something to help the community. I know that sounds corny, but there is that element here that you don't get when you're at a large bank."
