The fledgling Community Bank of Sullivan County in Montecillo, N.Y., is banking of rebound in its Catskill Mountains service area.

Formally opened Dec. 13, the bank is Sullivan County's first new bank since 1913 - when big resorts like Grossinger's were economic mainstays.

Though the heyday of Catslike tourism is long, Community Bank CEO George E. Dunkel says there's reason for optimism.

And he must be right, since most other start-up efforts in the region are being delayed by capital shortfalls.

"There's a trend toward bank formation in New York, but most of the charters are being issued to ethnically oriented banks in New York City," says John L. Pitchard, executive director of the New York Independent Bankers Association.

"People are still tryiing to start banks upstate, but most of them are having difficulty finding enough capital."

The New York Banking Department allowed Community to start up with $1 million less than the $6 million minimum, mainly because "I think they were really impressed with our board," says Mr. Dunkel. "We met with several officials and explained that we're in a rural environmental. But I feel it was the in-depth market knowledge of the directors - all of them working businessmen - that swayed the officials."

The directors deposited two-thirds of the $1 million put in Community during last week's "soft opening," when the doors first were opened, if not with fanfare.

By the time of Mondy's grand opening, the bank had started running print ads pledging to reinvest deposits in Sullivan County, where Norstar, Key Bank, First Nationwide, and the Bank of New York are the top players.

|We Have No Real Industry Here'

Before Community was started, there was only one bank headquartered in the county.

That bank - five-branch, $180 million-asset First National Bank of Jeffersonville - is the institution started in 1913. Its CEO, Arthur E. Kessler, "welcomes the challenge of another community bank," and wishes the new bank well. He adds, however, "We have no real industry here.

"The hotel industry has been phasing out for some time, the farms are slowly dying, and real estate is very depressed."

Nevertheless, there are signs of renewal, says Mr. Dunkel, who formerly was president of Westchester State Bank and, earlier, business development officer for Hudson Valley National Bank, Westchester, N.Y.

"Nynex has installed fiber-optic cable throughout the county, so it's readily availble to business that need it. And we've had two corporations, Frontier Insurance Co. and Cablevision Industries, establish their national headquarters here." However, Mr. Dunkel says his bank is pinning its hopes primarily on lending to the "many entrepreneurs we've always had here."

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