Table of Contents
Cover Story:
The Tourist Trade
We need 'em, We want 'em, We got 'em.
Feature Story:
How'd He Do That?
Some words of advice from Union State Bank's Tom Hales
DEPARTMENTS:
Economics Roundup
• The Smart Investor
Bold moves can be exciting, but also fruitless
• Economic
Viewpoint
The Fed's bark may be worse than its bite
Business Roundup
• Technology Viewpoint
Five steps to drive more traffic to your website
• The Fine Art of Advertising
Building a good campaign - how would you rate you?
Retail Round-Up
• Retailers Seeing Green
Shoppers plan to open their wallets this holiday season
Invest in Your Community
• Get The Ball Rolling
Learn how your company can help Meals on Wheels
Odds & Ends
• From The Publishers
• PR Patter
Dedicated Section:
Rockland Business Association:
The President’s Desk
Want to help Rockland and the business community gain some respect?
Here's how.
Bridging
Borders EXPO 2006
Recent Business-to-Business Expo a great success
RBA Happenings
• Other News
• Committee and Council Info
• Calendar of Events
• New Members
How’d
They Do That?
How Tom Hales built
Union State Bank
into a nationally respected financial
institution,
yet still remains true to
his—and the bank’s—bedrock
beliefs.
By Ken Mahoney
Under Tom Hales’ leadership, Union State Bank has become one of the fastest growing independent banks in New York State, with assets of approximately $2.91 billion and nearly 30 branches in the Hudson Valley region. The Bank’s parent company, U.S. B. Holding Co., Inc. has reported record earnings for 25 consecutive years.
For all of the numerous awards and accolades, not the least of which come from satisfied shareholders, Hales is a modest and self-effacing chairman, preferring to give credit to his employees for the bank’s success. He is also a philanthropist, insisting that his company give back to the communities which support it, and USB’s firm financing backing has helped causes as large as the USB Cancer Center at Nyack Hospital and as small as a the Paramount Center for the Arts.
Tom Hales is one of Rockland’s biggest—and best known success stories—although his acumen for banking and his generosity of spirit are known much beyond the county’s borders.
Rockland Business Digest had the opportunity to visit with Mr. Hales on a picturesque fall day at Union State Bank’s headquarters in Orangeburg. His gestures and intonations showed a passion for what he has done and what he is doing. We were fortunate to be able to interview him for his many words of wisdom, and if you are interested in growing your business, Mr. Hales has some ‘words of wisdom’ for you.
RBD: In 1982, you had two branches and $27 million under management. Today, USB has 30 branches and $2.9 billion under management (making the top 200 in the country). What strategies did you use to achieve this, or more simply put, how did you do it?
TH: It is kind of interesting because when I first came here, I really didn’t start with strategic planning. We didn’t have “strategic planning” in America until after World War II, and when you think about this, major corporations back then were run without strategic plans. After WWII, the U.S. Army had strategic plans and management in America started saying “wow, how do you get someplace if you don’t tell everybody where you want to go”? It’s the unknowing telling the unwilling to do the unnecessary. America has grown more since WWII than it did up to WWII. In the 70’s college professors were teaching and lecturing about strategic planning but it really wasn’t perfected until the late 70’s and early 80’s.
At that time, my wife and kids were going to college and we moved from Sleepy Hollow to Boston. I was doing well with my accounting practice, but I was a CPA who would fall in love with the banking business.
After I met and befriended then Union State Bank Chairman Bob Jackarusso, I then purchased stock in the bank. At that time, USB needed to raise more capital. I put up some money, along with several other investors, and that was the beginning.
The first thing I did was to develop a strategic plan. We were going to buy four branches from the Bank of New York; they had to divest themselves. So I needed a plan. We evaluated what we had and what we didn’t have, and we needed to set up a holding company and get SEC approval.
RBD: What would you say to those who in business right now reading this article but do NOT have a strategic plan?
TH: If you’re a very dynamic guy or gal and you can operate without a plan, I guess you could survive. But to me it would be like if you were going to Albany and you didn’t know what road to take...you would never get to Albany! Now, in order to have a real strategic plan, you need to evaluate your strengths, evaluate your weaknesses, and make sure that you address your weaknesses. Your objective requires that those weaknesses be strengthened. My big job when I first got here was to get additional capital in order to acquire the four branches and get SEC approval for a holding company. Then I put my own detailed plan together and this was the document given to the top guys.
RBD: In 1982 was there a strategic plan to eventually have 30 branches and $2.9 billion in assets?
TH: Our main objective, then, was to get the four branches. I was fairly new to the business, but I had people working with me that knew the business well. Guys like Bob Mackenzie, and Pete Reeves who was the President of the bank, knew what they were doing. We formed a management committee and obtained that extra money and then we had a working strategic plan. I surrounded myself with very bright, aggressive, hard-working gentlemen who became our first management team.
RBD: After you put together your strategic plan, how did you get people to ‘buy into’ it?
TH: You form your management committee and then you have to go over it. They thought I was an academic and this was new to the business then. So, first I had to convince them that it was important to have a strategic plan. I once read a quote about the traits of being a leader and it said there are three P’s of being a leader; passion, perseverance and poise. And nothing can be achieved without passion and poise and to persevere you must stay focused, push forward and never waiver. Poise is about temperament, as Hemingway said, “exhibiting grace under pressure.” I’m not sure how I exhibit that when it comes to my kids, but on a business level I try to live by that.
RBD: Of those three, passion, perseverance and poise, which of those do you feel best describes you?
TH: Well, I’d love to say that I’m strong equally in all three, but I think my greatest asset is that I have passion. I took a look at this business and said, “Wow, this is a very important business”! I’m going to make people’s lives in this business. We’re going to help get them money to buy a dream house, or car and help educate their kids. Or even go into business. This is a place where dreams are made and I approached it with great passion. Now in selling this strategic plan, I approached it with great poise. We approached the plan in several meetings, broke it down and analyzed who would be in charge of what section, and it just went from there.
“Some people think a community bank is a small bank. We can compete with the big guys and yet we still can focus on the Hudson Valley. That’s a great asset to have. Passion, perseverance and poise. Have the courage to let your people do it!”
TH: The strategic plan doesn’t change, but we changed the format a little bit—which is being done by the head of marketing now–and we get the ‘buy in’ and we have people that are familiar with it. I must tell you that we don’t have people who read it every day, but we hope they read it and revisit it once in a while. We revisit it every year as part of our budgeting process.
A lot of people say a strategic plan helps you grow. Not true; a strategic plan makes you respond to the people that you are responsible to, for example stockholders, employees, regulators, customers and the community. In the banking business, you need to make some choices. Do you want to do acquisitions or do you want to build internally? We chose to build internally on the basis that creating stockholder value was very, very important to us.
That covers the employees as well as the stockholders and provides growth within the organization because employees own 10% of the stock. When you buy somebody else’s business, that’s a specialty on its own. So we didn’t have to get into that specialty. We only made one acquisition during the whole process. That was the strategic choice that we made. We didn’t exclude making acquisitions, but we didn’t have to make more acquisitions because our plan was to grow organically. As a result of that, stockholders and employees did very well. The community, because we are a community-based institution, also did very well.
We have worked on the Union State Bank Cancer Center at Nyack Hospital, you’ve got the Birthing Center at Nyack Hospital, and the donation to the Maria Fareri Children’s Hospital at Westchester Medical Center. We’ve participated in our communities as best as we could; probably better than any other institution in the Hudson Valley.
RBD: Seems like you had many ‘good times’ and helped the community in the process. What about some of the downturns? I’m sure there were some along the way. How did you handle them?
TH: Oh sure! In 1986 when Congress passed a tax bill regarding real estate (what did this bill do the real estate industry?), all of the large institutions bailed out. They went and settled for so much on the dollar and actually it worked out well for us. Now we had something that was being loaned against originally at 100%, and they probably loaned 70% of the value, and now they were settling at maybe 50% of that value. So we solicited and eventually got the business and that was really the beginning for us. We stayed with them right through the early 90’s and there have been downturns.
RBD: A lot of things we’ve discussed today were regarding strategic planning. What other tools or ideas could you share with business owners as they are trying to grow their business?
TH: Number one: Your customer has got to trust you. Trust is the key. Number two: You must have a passion about your business. You have got to love your business and think about it all the time. You have got to be willing to do whatever it takes, which means pick up the paper on the way in. Pick up the paper. Read about what’s going on in your community. Be informed. You have to do things the simplest way possible so that they get done, because there’s always small stuff that gets in the way of the big stuff. So if you let that mount up, it’s going to kill you. You need something that keeps you focused and that’s where the strategic plan comes in.
Also, you can’t sit with it at your desk all alone. You’ve got to take the people that are responsible for the important parts of your business and you’ve got to share it with them. You have to have management meetings. People that will read it and be interested in it and will come to you and say, ‘I’m not sure we can do it this or that way.’ Don’t forget, our plan is in detail.
Additionally, businessmen and women who own their own businesses really need to network and get themselves out there in the community to help their businesses grow. Talking to other people within their industry and communicating with them helps them learn so much.
RBD: What traits would you say make for a great ‘leader’ in business?
TH: A leader’s responsibility, in addition to the three P’s I mentioned earlier, are the three C’s; criticism, coaching and courage. A leader’s responsibility is to set clear standards, pass critical judgments as to whether those standards are consistently being met, and have the courage to know when to pull the plug. To be legitimate leaders, they must coach as well as judge and have the patience to command respect. It is all about courage and you have to give people a chance to do what you are asking them to do. And that takes courage (and not micro-managing).
People have accused me of micro-managing, but I sit in on almost every important meeting that has to do with a major risk for the bank. It may look like I’m micro-managing, but 99% of this bank just happens and generally I am not directly involved with every aspect and detail. We have very strong, confident employees and I trust them. I have been in management my whole life. This is all I ever wanted to be.
“In the banking business, you need to make some choices. Do you want to do acquisitions or do you want to build internally? We chose to build internally on the basis that creating stockholder value was very, very important to us.”
TH: As long as my health holds out! But we’ll see what happens...you just never know.
RBD: As you know, this magazine is read by a lot of prominent businessmen and women throughout the county. What would you tell them about business contingency plans?
TH: You really have to decide early and often whether you’re going to keep it or whether you’re going to sell it. Then, based on that, you need to determine who within your organization will have the same passion to run it as you have. There’s a major risk when you go outside of the company and hire a CEO. You need to develop a person internally, in my opinion. There’s a tremendous risk in succession. If I were advising anybody, I wouldn’t wait too late to decide a successor.
RBD: Who is your choice for successor?
TH: Right now, Raymond J. Crotty, who is the president. This is a very unique organization. People have been here for a very long time and their attitudes are different. They love the business. Every day is another challenge.
RBD: You seem to have so much energy. How do you do it, or do you get burnt out? What do you do to rejuvenate yourself?
TH: The analogy I can give you is one in baseball, Ted Williams, the greatest hitter of all time. If he didn’t like hitting the baseball, he wouldn’t be swinging that bat more than anybody else! Now, my wife is a golfer who never practices. That means, she plays golf, she has fun, but she’ll never be a professional golfer. What happens in business is that if you’re doing something you like, you really don’t burn out. You may go home very tired, but you don’t burn out that easily. I go to Florida for the month of January and sometimes into a bit of February, but in fact I’m always doing some sort of business through that time.
RBD: On a personal level then, what is your golf handicap?
TH: I’m 13.
RBD: Favorite baseball team?
TH: Mets. I think the Mets can do it.
RBD: Does that make you a Jets fan?
TH: Jets; isn’t that funny...yes.
RBD: What
do you like to read?
TH: Everything — from John Grisham novels
to The Wall Street Journal. More often than not, I read several
books at one time.
RBD: Musical tastes?
TH: Frank Sinatra
RBD: Best advice you have received:
TH: Life is not a dress rehearsal. I have six
kids and a loving, wonderful wife.
RBD: Famous person you would
like to meet:
TH: That’s a very good question, there
are so many. I suppose it would be the Pope. The Pope seems very
profound and strong.
“I thought, I’m going to make people’s lives in this business. We’re going to help get them money to buy a dream house, or car and help educate their kids. Or even go into business. This is a place where dreams are made, and I approached it with great passion.”
TH: We take great pride in that! As a matter of fact, we take a trip each year and show some of the projects at our convention. We put up the faces of the people within our company up on the screen and we’re prouder of them and the projects than they are! We were very instrumental in rebuilding White Plains and New Rochelle. If it weren’t for us, Rockland would have had tough times in the 90’s.
Last year at our holiday party, I said to our people ‘where would Rockland and Westchester counties be without Union State Bank?’
We push our employees, but it’s worth it. We contribute a little more than the norm, but it makes a difference in the whole life of a community. If the community is strong, then the real estate within that community is worth more money and the infrastructure is better...all of it comes back to you.
Some people think a community bank is a small bank. We can compete with the big guys and yet we still can focus on the Hudson Valley. That’s a great asset to have. Passion, perseverance and poise. Have the courage to let your people do it! RBD
Union State Bank
At A Glance
Products & Services
• Internet Banking
• Personal Services: Checking and savings accounts; CDs; consumer,
mortgage and home equity loans; IRAs; debit and credit cards.
• Business and Professional Services: Business lending; business
checking, statement savings and money market accounts; business
credit cards; cash management; lock box service; retirement accounts.
• Commercial Banking Services: Loans and leases; business
deposit accounts; commercial real estate lending; cash management;
business credit cards.
• USB Credit Card
Parent Company: U.S.B. Holding Company, Inc.
Year Founded: 1969
Total Assets: $2.91 billion (fiscal 2003)
Total Employees: Approximately 385
Total Branches: 29
Stock Symbol: UBH (NYSE)
Web site: www.unionstate.com
Branch Locations:
• Rockland County: Nanuet, Orangeburg, Monsey,
New City (2), Haverstraw, West Haverstraw, Spring Valley (2), Central
Nyack, Pearl River, Chestnut Ridge, Stony Point, Suffern.
• Westchester County: Tarrytown (2), White
Plains, North White Plains, Yonkers (2), Peekskill/Cortlandt, Ossining,
Bedford Hills, New Rochelle, Eastchester, Rye Brook.
• Orange County: Goshen
• New York City: Manhattan
• Connecticut: Stamford
