Tioga-Franklin Savings Bank
Cradle of freedom, home of the juiciest cheesesteaks and golden soft pretzels, land of the traffic-choked “Sure-kill” Expressway, the scarred Liberty Bell, the mighty Delaware River, Rocky, and the brashest of sports fans.
For Tioga-Franklin Savings Bank, sandwiched squarely along East Girard Avenue in historic Fishtown, the City of Brotherly Love has been home sweet home since 1873, formed during the unlikeliest of times, in the economically-depressed, post-Civil War days.
The bank has been a one-branch operation its entire life, reflecting a fiercely independent streak and a survival instinct that endures like each profound word of the city’s signature product, the Declaration of Independence.
The bank’s president and CEO, John T. Coleman, has worked in the world of banking since 1972, first learning the ropes at a trust department at another institution in Philly. Coleman then ran a bank in South Philly in the ‘90s.
Even when Coleman thought he was ready to leave banking behind, like a perpetually frustrated Phillies fan, he kept coming back.
For the longest time, the bank was a building and loan, named Tioga Building and Loan, which operated from space within a real estate office.
In 1973, Tioga Building and Loan merged with Franklin Savings and Loan to form the Tioga-Franklin Savings Association.
In the summer of 2000, the spunky little community bank became Tioga-Franklin Savings Bank and members of the Federal Deposit Insurance Corporation.
About 11 years ago, the bank moved its solitary branch and headquarters out of the real estate office to its own location—a whopping 100 feet away.
“A hundred feet in Fishtown is a long distance,” Coleman joked.
Fishtown is an old, dyed-in-the-wool Philly neighborhood, suffused with traditional working class roots and a rich sense of place. The “fishy” name is derived from the Delaware River, which centuries ago was the backdrop for a bustling fish and produce trade. And despite its name, no lingering steamy fish aroma assaults the senses. Fishtown is more likely to smell like pepperoni pizza or grimy industry than the core of the commercial shad fishing industry.
Today, the old harbor town is being rapidly transformed into a harbor for artistic, culinary and musical ebullience. The narrow streets lined with modest row homes now exude an ultra-cool, exhilarating vibe.
But the historic town’s angling history is as close as the local Arts Association logo, with its wooden banner of an etched fish.
In the heart of Fishtown, along the scenic riverfront, is Penn Treaty Park, the pivotal site where William Penn signed a treaty with local Native Americans, negotiating over land and promising peace and friendship under a leafy elm tree that has come to epitomize settler-Native American relations.
Reeling in Investors in Fishtown
The city keeps the park in pristine condition, though Coleman acknowledges that the green space is surrounded by the relics of modern industry and dilapidated city living.
“The town itself has undergone a tremendous change in the last 15 years,” Coleman said. “In fact, even in the last five years, the change has been earth-shattering.”
The town has “become a mecca for millennials,” he said.
He attributes the area’s resurgent appeal to a solid public transit system and nearby twenty-something hubs such as Temple University.
The town and the bank are capitalizing on that blossoming renaissance. The city is rejuvenating its main arteries, and chic, upscale bars and restaurants are flooding back in, especially along Frankfurt Avenue.
In Fishtown, “real estate values in our zip code have taken off tremendously,” Coleman said. In fact, the vibrant redevelopment has almost priced people out of the market.
Today, a 90- or 95-year old rowhouse, with two beds and one bath, may sell for $200,000. If modernized, it may sell for $350,000, Coleman offered as evidence.
“It’s amazing what is going on with real estate values,” Coleman said.
As a happy consequence, the market is attracting a tremendous number of investors looking for rental properties, Coleman said.
“It’s hard to find a property in Fishtown,” he said.
In neighboring Port Richmond, investors are starting to see the same thing happen.
New construction is taking place as well.
“I can look out my window and see five projects,” Coleman said.
He has noticed the trend of entrepreneurs buying vacant buildings and then erecting condominiums and townhouses on the site. Instead of building single-family row homes, many visionaries are building multi-family pods, for young Generation X-ers accustomed to dorm and casual group living.
Coleman points to the building right across from his bank. The buyers purchased an old stone church and secured a piece of ground next to the church, where they are building a townhouse that is all ultra-modern steel, slate, glass and stone. The stone matches the church. The construction cost is approaching $600,000—for a rowhouse, Coleman marvels.
“It started taking off in Northern Liberties and it overflowed in to Fishtown,” Coleman said. “The change happening has been very fast and very dramatic.”
This change in housing stock and culture has affected the bank’s customer base.
“Our traditional client base has been disappearing,” Coleman said.
“We are now shifting to young professionals and millennials in general, and they don’t deal with banks. It’s all electronic. When they need to borrow money, they borrow online.”
It is those bank-shy millennials who are buying houses now.
“Our tradition was we took passbooks and CDs, and lent money in community-based mortgage lending.”
Their clients were the type of persons who couldn’t go to Quicken loans or a similar lending firm.
Now buyers are purchasing homes, not for themselves, but to rent out.
The Post-Recession Cloud—and Sun
When the market lurched dangerously downward in 2008, the economic upheaval caused trouble in the bank’s portfolio, as it did for nearly all banks. Tioga-Franklin was a small bank, doing well, but the economy pulled the rug out from under them.
Coleman joined the bank in early 2015, when “we were still in a crunch, and like all banks, facing regulatory scrutiny,” Coleman said.
At the time, the bank had five employees, who responded to every issue under the sun.
Coleman’s predecessor had retired after putting in 45 years in banking. He acknowledges it’s “hard to take on this headache in a small institution.”
So why did he jump into the murky waters?
“I’m crazy!” he joked.
He pointed out that he is a “semi-local guy.” He lives close by in South Jersey.
He has worked for several community banks. One was a start-up, one, a turnaround.
“We apparently did too good of a job, because the bank was sold to a larger player in Delaware. The shareholders did really well and were exceedingly pleased,” Coleman said.
Coleman headed the transition team at that bank, under contract to stay for just a short while.
Coming to Tioga-Franklin, he confessed that the banking industry was a challenge, but what he saw here “was a bank that was not ingrained in a certain business model.”
When he came, he had to basically scrap the old business model and begin anew.
Today, they have grown the amount of loans made by over 20%, with a staff of seven employees–some workers telecommuting because, “I don’t have office space, I don’t have parking. How can I get someone to come into the city?” Coleman asks matter-of-factly.
Coleman notes that his bank is not like a branch in the midst of cornfields and horse farms, or along a busy Norman Rockwell-esque Main Street with a high volume of walk-in traffic.
“Our front door is locked. Customers have to ring the bell to enter. We don’t get a lot of walk-in traffic, just neighbors who bank here. We never had transaction accounts.”
Clients may occasionally come in to make a deposit or a mortgage payment, but he estimates that he only sees about 10 customers a week.
He notes that they had an “extremely limited product line.”
“We convinced the board we had a game plan to turn the whole model around and provide better service to the community because the community has changed.”
In 2015, the bank finished the clean-up of regulatory issues and laid a foundation for changes to come. Coleman accomplished both.
For the bank, 2016 was the “year of implementation. It was a good year for us. 2017 promises to be an even better year,” Coleman said.
Elevating their Profile through Facebook
This year, he has three objectives: “marketing, marketing, and marketing.”
It’s working, Coleman said.
Exhibit A: just the other day, someone from North Jersey contacted the bank with interest in opening a special escrow account because of the bank’s Facebook ad.
That all happened because the bank hired an enterprising young college senior from Temple University who had launched his own public relations company. The student, as a highly connected, highly motivated millennial, had taken the initiative to go from bank to bank.
“We engaged him to do a PR campaign for the bank, and eventually he got the contract” to spearhead the bank’s outreach and prepare and post content for social media via Twitter, (@tiogafranklin), Facebook and LinkedIn.
Coleman confesses that the bank website is now a “poor stepchild” as they concentrate on more active social media. The site was prepared by the bank’s old technology company, but it will be updated and overhauled soon to mirror their social media.
Coleman also confesses that, “We are not Citibank, but we are getting a following,” with over 350 shares of their ad and 1500 likes.
“It’s amazing how many people share our bank ads on Facebook.”
“Here we are a seven-person bank in Fishtown and many residents of Fishtown don’t even know we exist.” But no more. Before, they catered to a specific type of customer—an older customer with money saved up, or money needed to buy real estate.
Now from 2015 on, they are doing mortgage loans and putting systems in place to do their processing.
“We haven’t set the world on fire, but…” Coleman thinks they could.
“Our goal is to expand that and set the world on fire. We don’t need a big piece of pie, but we will take a few bites.”
In addition to conventional mortgages, they are also doing more business lending.
They are offering Small Business Administration loans, completing eight in the past year.
With $37 million in assets, but they just did $9 million in SBA loans—and another $2 million will be offered in the coming weeks.
“The model is starting to work.”
The bank continues to build business relationships. The old banking model is yielding to the electronic.
“Millennials don’t care if I have a locked door on my branch because they are not coming here.”
The bank now offers checking accounts with rewards checking, debit cards, and a full range of E- and mobile banking. “One byproduct is the ability to do virtual banking for small businesses. That part of it has been very active.”
Living to Serve
When it comes to community service, Tioga-Franklin adopts that familiar Philly, full-steam-ahead stance.
“We want to be an active player.”
The bank supports the Fishtown Neighbors Association, both financially and through their attendance at meetings. They are also active in the Fishtown Business Association.
Another project for hungry children is in the works.
“We hope to start a conversation with top chefs,” Coleman said. He points to world-renowned chef, restaurateur and author Marc Vetri and the nonprofit Vetri Community Partnership. Vetri teaches grade school and high school kids how to cook and eat healthy, using the freshest foods, and a mobile preparation site and kitchen. The bank is currently working with the organization’s CEO to find ways in which the bank and its staff can be more involved in their efforts.
Penn Treaty Park would be a superlative site for the mobile truck, Coleman said.
The bank is also active with the New Kensington Community Development Corporation. “We support them financially. We take an active role in pushing projects through.” The group is devoted to strengthening the economic, social and physical fabric of Kensington, Port Richmond and Fishtown by being a catalyst for development and community building. Each year the CDC serves more than 30,000 low- and moderate-income families and 60,000 residents, creating jobs and community wealth.
For example, Coleman recalled, neighboring businesses wanted to digitize the avenue, arming it with videocameras to monitor and prevent crime.
The bank itself has a Cadillac system of cameras of its own, and thanks to the city stipend, the whole avenue is now digitized, Coleman said.
Around the bank are retail shops, but many stores are being converted back to residential living.
Only five banks operate now in Fishtown, and “the area is now more residential than ever.”
The buildings immediately around the bank are residential, then there is a real estate office, a former law office, an antique store that no one ever seems to be in, and two restaurants.
“It’s not a bustling area, this part of Fishtown. There’s not a lot of foot traffic. West of us, about four blocks away is where all the bars and restaurants are, and where millennials flock.”
The Tioga-Franklin Philosophy
Coleman’s philosophy, and the secret to the bank’s success, is first, that even though they are small, that smallness has allowed them to know their customer base. Board members have been here a long time, Coleman pointed out.
“We know the community well. We know our customers. By design, we kept the bank small because we still want to know our customers. Even with a lock on our door, we want to serve the community. Our customers love us.”
They will expand to do more lending, and it will, again, be all about knowing our customers.
“You can’t do that if you have 10 branches in two counties. We have a desire to do this because of our size and the necessity to do this because of our size.”
“We know our customers’ sons’ names and grandson’s names. We know who had four tickets at the Diamond Club at the Phillies’ stadium for 80 games.”
While Coleman may be a master tactician, he doesn’t like to use the term “turned the bank around.”
“I met with staff originally, and we said, ‘We need to have a website, checking accounts—things started moving rapidly.”
But “turnaround?” It’s more like “runaround.”
“I run around in circles all day long. We are all wearing 10 hats.”
He hopes to bring in more staff eventually, but right now they all perform at maximum efficiency.
“As crazy as it may sound, it is fun.”
“It’s a great opportunity for me and the bank to take the concept of community banking and take it more into the virtual world. It’s all about personalized service and customized service, delivered electronically.”
“We can’t afford ten branches and we don’t need them for the model we’re adopting.”
“You can call us, the little bank that could, like Thomas the Tank Engine.”
As the grandfather of four himself, he has no plans to retire.
“I will continue to do this as long as I stay healthy, and banking stays challenging and fun.”
He has helped to make a century-old bank, like Fishtown, a valuable, up-and-coming catch.