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Solid Citizens
CORPORATE CITIZENSHIP
Gormley and Citizens are banking on the future of urban lending in Connecticut
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Business New Haven
1/24/2000
By: Lori Green
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It's not always the same thing to be a good bank and a good citizen.
Though there weren't many banks around in the 4th century, Greek philosopher Aristotle had a similar notion when he wrote, “It's not always the same thing to be a good man and a good citizen.” One of the earliest proponents of democracy, Aristotle believed that citizenship brought with it a defined set of rights, privileges and, yes, responsibilities.
First and foremost, to be a citizen is not the same as being an individual, a separate entity. Rather, it is to exist and thrive as an integral part of something bigger, something more consequential. Sound abstract? It's not, if you take a close look at how Citizens Bank has linked itself to the people and neighborhoods it serves.
Or ask Bob Gormley, the bank's president and CEO. He's now at the helm of an organization that has spearheaded nearly a dozen initiatives over the past few years aimed at enhancing the quality of life in Connecticut's communities.
Here's a bank that's figured it out: Being a good bank and a good citizen is possible, even desirable. It boosts the bottom line - and takes the neighborhood up with it.
As Gormley puts it: “Community involvement is one of our core values. We feel that doing the right thing for our customers, communities and our employees makes good business sense. The returns on these investments will be positive and differentiate us from our competition.”
Distinction noted. This is a bank that has gone on record to affirm that “Everyone has the right to homeownership.”
Such proclamations might be regarded as just so much mission-statement puffery, coming as it does from the hard-nosed financial sector. But there's the $5 million in zero-down-payment mortgage financing for qualified homebuyers that Citizens has funneled into New Haven, Middletown and New London. That program alone would give Citizens the aura of being an equal opportunity lender which is bolstering the American Dream with more than marketing glitz.
Then there's Citizens' Inner City Mortgage Program, which allows New Haveners with incomes of at least $46,000 to secure a 30-year loan for $100,000 at an advantageous interest rate and manageable monthly repayment terms.
And if you don't qualify for that, there are several other Citizens-supported mortgage options.
“We try to tie corporate giving to the success of our company. As we continue to grow and prosper here, our investments in the community will also grow,” Gormley says. “We see New Haven, in particular, as having tremendous potential.”
Beneficiaries of Citizens' largesse include a host of outreach programs targeted to small businesses and prospective home-buyers. Other recent initiatives launched in New Haven County include: dollar matches for “micro-lending” to businesses located in New Haven's Empowerment Zone; the Citizens Bank Charitable Foundation to provide funding to nonprofits whose missions support affordable housing activities; the Greater New Haven Loan Fund; the Federal Home Loan program; and the Connecticut Housing Investment Fund. All this, as Citizens aggressively grows its customer base, now at roughly 240,000 accounts.
Quite a feat having moved into the Nutmeg State only five years ago. Yet, the company is far from a newcomer to the region.
Citizens first opened its doors as the High Street Bank in Providence, R.I. back in1828. Through a myriad of bank acquisitions in Rhode Island, New Hampshire, Massachusetts and Connecticut, today's Citizens Financial Group Inc. is a $22 billion company. The bank currently operates 43 branches in Connecticut as well as 47 ATMs. Completion of recent acquisitions of the Bank of New Haven and UST Corp. will ramp Citizens up a to $28 billion organization, the second-largest bank holding company in New England.
Should the bank's early 19th-century American pedigree fail to impress, consider Citizens' royal parentage: the company has been a wholly owned subsidiary of the Edinburgh-based Royal Bank of Scotland Group, PLC since 1988. The Royal Bank of Scotland was founded in 1727.
A thoroughly New World citizen with an Old World propensity to take the long view. Here in New Haven, Citizens Bank's approach to community investment is strategic, unrushed and tolerant of some risk in order to bring about substantial future gains. Indeed, while writing out all those checks to nonprofits and mortgage funds, bank managers keep a sharp eye on the balance sheet.
Explains Gormley, “The bank payback is a little longer-term with community initiatives. For instance, the program in place for first-time homebuyers will take up to 18 to 24 months before we see direct results. We believe that helping people purchase their first home will turn them into loyal customers who will likely tell their friends and family about us.”
Citizens is also looking out 18 months before measuring the success of a new deposit-training initiative. The bank has partnered with Neighborhood Housing Services to match dollars contributed by 15 families who attend monthly workshops on how to save for a home down payment.
In 1998, Citizens' outright charitable giving in New Haven County totaled $130,000 - and close to $200,000 in 1999. Then add on the $350,000 to the Greater New Haven Community Loan Fund. Not to mention the $5 million zero-down-payment program.
According to Gormley, who took over the reins last October, Citizens has a long track record of promoting community service among its employees and fostering urban economic development.
Last December, Citizens Bank became the state's first bank to receive a $38,000 U.S. Treasury's Bank Enterprise Award. The award recognized Citizens' achievements as a leader in community-development lending and investing among tradition financial institutions.
And, no, the bank didn't pocket the cash. The award money was turned over to the Connecticut Housing Investment Fund to use for expanding and maintaining affordable housing for Connecticut's low- and moderate-income residents.
One of the bank's sponsored programs that has produced desirable results is the Small Business Institute, which operates in conjunction with the Greater New Haven Business & Professional Association. Through the institute, start-ups and expanding companies have received technical assistance in business operations, planning and financing.
Citizens' participation in the Community Development Loan Program enables non-profits to apply for loans and receive the underwriting they need, as distinct from the forms of financial support required by traditional borrowers.
Of the bank's approach to community support, Gormley says: “We target giving to causes that fit with our own corporate principles. Often we are partnering with an agency or group that can help us to leverage our dollars invested more than they might be by giving money to a capital campaign.”
In addition to the various forms of cash infusions into ongoing community initiatives, Citizens generously offers New Haven the services of its own employees - at its own expense. The bank provides employees with a three-month paid leave in order to work in the community. Beneficiaries include a local women's center and children's home.
The bank's “Citizens Unite” program encourages employees to perform volunteer work, and community involvement is considered an essential element of employees' performance evaluations. Citizens awards employees for their public service each year and contributes up to $1,000 to an agency of the recipient's choice.
The bank also works with Hillhouse High School to mentor and train students as though they are prospective employees. Students in the program receive one-on-one, on-site job-shadowing experience.
Citizens is confident about New Haven's future growth - and is putting its money and people in the service of that vision. BNH
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