2 min read April 2022 — Tom Iadanza, president at Valley Bank, says that jumping into new industries in New Jersey and new national trends helped the bank expand and be more profitable. In an interview with Invest:, he said the cannabis industry and fintech competition have made Valley Bank more nimble and responsive to client needs than ever before.
What challenges or successes marked 2021?
At the beginning of 2021, we faced a number of challenges, and we still are dealing with some of them. The labor shortage would be an example. Very early on in the pandemic, we were nervous and uncertain as to what was going to happen in the economy. But we were able to retain most of our customer base because we are very close to them. They have matured with us and have survived past downturns. We saw a shift, after the first quarter of 2021, in which some of our clients started exploring new industries and expanding into new territories. One result is that we have had record growth in the last three quarters of 2021, with the most liquidity we have ever seen.
How fast is the banking industry changing?
Banking is changing every single day, not just technologically but the legislation is constantly changing as well. This was particularly true with the PPP loans. One positive trend is we are providing new opportunities for minority populations to expand their businesses and gain access to capital. It is our priority to give people access to the new grants that have become available. For example, we have provided up to 97% of financing under the Community Advantage Loans program that funds first-time home buyers that are low- to middle-income households.
There is also a need for small businesses, specifically minority-owned businesses, to access capital and to have liquidity. In fact, COVID actually helped us solidify this relationship with customers because it made us focus on the recovery of our own community. We have been maintaining the quality of our backyards, so to speak, helping to keep the small business community alive so they can come back stronger. To that end, we provided approximately $2.4 billion in PPP loans in 2020 and another $900 million in 2021.
What sets Valley Bank apart from other banks and what segments offer potential growth for the bank?
We have both commercial and personal banking clients. The retail side is incredibly competitive. The commercial segment is one-to-one relationship driven. To satisfy our commercial clients, we are quickly switching to more online and digital products. What sets us apart from other banking institutions is that we have found niches on the commercial side, particularly in the healthcare and cannabis industries.
Nationally, the cannabis industry is not widely legal, and although we speculate that it will continue to become increasingly decriminalized and more regulated, many other banking institutions are not comfortable yet dealing with cannabis businesses. For example, we have helped our customers in the cannabis industry accept and collect payments. These are businesses that have large cash transactions and multistate operations that need a solution to protect their business. We have five to 10 clients in that industry, and we expect to continue to grow in that regard.
How essential is technology for banking and how disruptive is it?
Traditional banking institutions have to adapt and offer their clients these new technologies, such as fintech or crypto. Our bread and butter is still taking in deposits and making loans. We are partnering with fintechs for things like payments and creating financially sound projects and are able to sit down and talk to our clients about these new technologies. That’s what clients are looking for; they’re looking for an innovative banking partner that can give them quick solutions. We have a mini incubator that enables us to be the first to have these conversations with our clients. If a client is asking us for bitcoin, we have to be nimble, otherwise fintechs and crypto currency companies will steal the client.
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