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Roma Bank started in 1920 has become well knitted into the
Italian community and is now migrating to areas where the population has migrated
Financial
Savings & Loans
(ROMA-NasdaqGSM)
Roma Financial Corporation
2300 Route 33
Robbinsville, NJ 08691
Phone: 609-223-8300
Peter A. Inverso, CPA
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – August 17, 2007
BIO:
SENATOR PETER A. INVERSO
Peter Inverso holds a B.S. in Commerce and Accounting from Rider University and is a
certified public accountant. He has held various positions in international and regional
accounting firms, including partner. He was named to his current position of
president and CEO of Roma Bank in September, 2000. He led the effort to establish
Roma Financial Corporation and to build its new corporate headquarters in Robbinsville,
NJ. He was elected and re-elected to the New Jersey State Senate for four consecutive
terms. Active in many civic associations, he is the past chair of RWJ University
Hospital at Hamilton.
Company Profile:
Roma Financial
Corporation (NASDAQ:ROMA) is the holding company of Roma Bank, a community bank
headquartered in Robbinsville, New Jersey. Roma Bank has been serving families, businesses
and the communities of Central New Jersey for over 86 years with a complete line of
financial products and services, and today Roma Bank operates branch locations in Mercer,
Burlington and Ocean counties in New Jersey.
CEOCFO: Mr. Inverso, what is your vision for Roma
Financial and how do you get there?
Mr. Inverso: “Roma Bank started in 1920 and over
that time, it has become well knitted to its traditional community. For over 80 years, the
bank was solely a residential lender with a loyal and ardent customer base comprised
primarily of Italian-American intergenerational customers. With six branches in Mercer
County, the customer base had become more diverse. It was evident that if the bank were to
grow it would have to expand its lending capabilities to include commercial lending,
embark on a branch expansion program and develop a contemporary branding plan. We designed
a new logo, and implemented image print, radio and cable advertising. We rolled out our
commercial lending initiative in 2001 and opened our first out-of-county branch in 2003.
We constructed a 47,000 square foot corporate office and branch and added an additional
out of county branch over the next three years. In seeking growth opportunities, the bank
is looking to areas where its customers have migrated or where there are attractive
opportunities for market penetration and garnering market share. We recently completed an
initial public offering where we raised approximately $90 million dollars, which we plan
to deploy into additional organic growth as well as the possibility of making an
acquisition. As we bridge tradition and growth in pursuing these initiatives, we will
always be mindful of our core mission.”
CEOCFO: What is the mix between
consumer and commercial?
Mr. Inverso: “As I mentioned for over 80 years
our loan portfolio consisted only of residential loans. Accordingly, our loan portfolio is
still comprised predominately of residential loans. We have eased into commercial lending,
increasing our appetite as we gained more expertise and grew more comfortable with the
risk implications of commercial lending. Since we embarked upon commercial lending, we
have enlarged commercial loans to 16% of the loan portfolio.”
CEOCFO: Would you like to see
the commercial loan side increase?
Mr. Inverso: “Yes. Right now, the residential
housing market is fairly stagnant and it appears that the greatest prospects for us to
grow our loan portfolio will come from commercial loan opportunities.”
CEOCFO: How do you go after
that new business?
Mr. Inverso: “We have in place the platform,
capacity and competency to accommodate the financing needs of the businesses in our
markets. Our stock offering permits us to pursue and compete for larger credits. While we
advertise in business publications and attend business expos, we are attracting more
prospects because of our reputation and growing recognition that we are a community bank
willing to customize its lending products to meet the needs individual needs of the
borrower.”
CEOCFO: What might someone find
at Roma that is different from other banks?
Mr. Inverso: “I think our reputation, borne on 87
years of stability and customer focus, speaks for itself in that regard. Roma is a bank
that is nearing $900 million in assets. Prior to 2003, we only had six branches. On a per
branch basis, we have a very high deposit base, which means that we have great customer
affinity and loyalty. We credit that to the fact that we make a special effort to remain
close to our communities and closer to our customers. Our retail branch
managers are exceptionally well skilled technically and excel in customer service. They
are all long tenured with the bank and with their branch, and have developed strong bonds
with their customers. Additionally, we have an open door policy. Customers know they have
access to the decisions makers. They feel at ease to stop by and meet with our chairman or
me; and often do. These are the defining attributes, which we believe distinguish Roma
Bank.”
CEOCFO: Are there services you
are not offering now that you plan to add?
Mr. Inverso: “We offer a full range of retail
services as well as lending services. However, we do not offer a tiered money-market
product and are assessing the efficacy of adding it. Additionally, we are considering
remote capture services for business customers and borrowers not conveniently located near
one of our branches.”
CEOCFO: Do you have a set plan
for the expansion or is the expansion more opportunistic?
Mr. Inverso: “We have a plan in place. Over the
past four years, we have opened 3 branches, growing from 6 to 9 branches. We intend to add
3 more within the next two years. So, we are not branching indiscriminately. Our existing
marketplace has become intensely competitive and it compels us to look for demographics,
which are conducive to gaining market share. We also closely follow the migration of our
customers in evaluating location opportunities. Our business plan, which supported our
public offering, identified our branch expansion goals. We are following that plan
closely. Geographically, we intend to expand to the south and east because these areas of
our state hold the best promise of population growth.”
CEOCFO: Are there particular
areas of community interaction that you focus on?
Mr. Inverso: “We truly believe in the mission of
a community bank. As we branch, we seek to become wedded to the new community by being
supportive of the local community organizations and their activities. This is consistent
with our history and commitment to our home communities. We created a foundation to aid us
in achieving this purpose, but we also encourage our employees to become a community
resource. We attempt to support a wide variety of non-profit organizations. Our foundation
will consider support of non-profit organizations with missions concentrating on
healthcare, art, housing, history, children and family services and education. However, we
tend to favor those that provide affordable housing opportunities through housing
rehabilitation or creation in inner-city neighborhoods, particularly in the City of
Trenton, since our roots are in the city.”
CEOCFO: As you continue to
grow, how do you maintain the personal connection as you become a bit more removed from
your customers?
Mr. Inverso: “No doubt, growth poses that
possibility and danger. Perhaps, so does the increasing use of internet banking. Customer
access to top management is culturally ingrained in Roma Bank. Additionally, when we
establish a branch, we undertake a commitment to become a contributing member of the
surrounding community. This commitment provides the foundation for developing and
maintaining relationships. Since we do not plan on transforming Roma Bank into a
mega-bank, top management will continue to be visible in the communities we serve and
remain accessible to our customers.”
CEOCFO: Are there many other
local community banks in your area and if so, what sets you apart from the others?
Mr. Inverso: “There are other local community
banks, but we are the oldest. We are recognized as an exceptionally stable and strong
institution that has remained true to its mission, while strengthening its roots and
emerging as a contemporary, full service bank. I should add that individuals who were born
and raised in our community and who are highly respected have always led the bank and that
our growth has been internally fueled. It is this composite that distinguishes Roma Bank
in our market.”
CEOCFO: It has been challenging
for many banks recently; how are you faring under the current industry situation?
Mr. Inverso: “There is no doubt that the last two
years have been most challenging for community banks. The inversion of the yield curve is
compressing margins making it very difficult for banks that principally rely on the spread
between long-term and short-term interest rates to be profitable. While long-term rates
have nudged up somewhat, competition is making it very difficult to significantly improve
loan portfolio yields. Therefore, in addition to taking steps to improve non-interest
income, we have focused on controlling our cost of funds as tightly as we can. We have a
very favorable embedded cost of funds, which together with our strong capital provides us
with a very good net interest margin. Additionally, the public offering permitted us the
luxury to resist the extraordinarily high deposit rates offered by our competitors.
However, the pressure on deposit rates is mounting and as we open new branches, the
deposit mix will probably skew to certificates and put pressure on our overall cost of
funds. Clearly, in this environment, controlling non-interest costs is imperative in
improving earnings. This presents a challenge to us as were adding branches.”
CEOCFO: Why should potential
investors be interested?
Mr. Inverso: “We have an organization that has
great value and a promising future. Our operating performance compares very favorably to
our peer comparisons. We have added to our capital base with our public offering. If we
are successful in deploying that capital as our business plan supporting the public
offering contemplates, we will continue to grow and to add shareholder value. An investor
has to assess whether this makes our company an attractive investment opportunity.”
CEOCFO: Finally, you have your
four pillars of foundation. ‘Strength, Loyalty, Wisdom and Vision;’ will you
elaborate?
Mr. Inverso: “Clearly, if you look at our
metrics, we have a strong capital foundation built over 87 years of serving our
communities. We have weathered the vagaries of the economy and world events over that span
of years. I believe that speaks to our strength. From a loyalty perspective, it is a
two-way street. Our customers are loyal to us. We have families that have been
intergenerational customers. We also feel we have been loyal to our customers by remaining
true to our mission. As to wisdom-it is apparent that the bank has thrived since 1920. It
has responded to the changing banking and regulatory environment, as well as, the changing
needs of customers. You have to have the wisdom to recognize and respond to evolutionary
changes. Vision speaks to the fact that we have crystallized a plan for growth while
transforming our bank into one that provides a full complement of customer services.”
CEOCFO: It sounds like Roma has both a strong history
and a strong future!
Mr. Inverso: “That is well said, we may coin that! We
use “bridging and growth.”
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