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Project Fibonacci converts STEM into STEAM
ROME — “Make your lives extraordinary … be individuals,” John Keating, played by Robin Williams, says to his high-school students in the 1989 movie “Dead Poets Society.” “Carpe Diem,” he continues: “Seize the day.” Williams’ character inspired his students through unorthodox teaching methods: standing on a desk to look at life differently, ripping out the […]
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ROME — “Make your lives extraordinary … be individuals,” John Keating, played by Robin Williams, says to his high-school students in the 1989 movie “Dead Poets Society.” “Carpe Diem,” he continues: “Seize the day.”
Williams’ character inspired his students through unorthodox teaching methods: standing on a desk to look at life differently, ripping out the introduction to a poetry book which rated poetry by means of a mathematical formula, and even inviting students to create their own style of walking.
Motivating U.S. students to understand and explore the power of their potential is a national priority. Last year, President Obama announced a $240 million initiative underwritten by the private sector to encourage youngsters to pursue STEM (science, technology, engineering, and math) fields. The initiative included a national competition to create media that inspires young people, a promise by 120 universities to train more than 20,000 engineers, and a CEO commitment to expand effective STEM programs to another 1.5 million students within the year. The president previously inaugurated a program to prepare 100,000 STEM teachers over a decade. To date, his “Educate to Innovate” campaign has generated more than $1 billion in financial and in-kind support for STEM programs.
STEAM
“STEM is very important, but we need to tie science and the arts together,” asserts Andrew (Andy) Drozd, president and chief scientist at ANDRO Computational Solutions, LLC. “Everyone is focused on innovation to transform our economy in the 21st century. To accomplish this, we need to add an ‘A’ to STEM for art, creating the … [acronym] STEAM. I think back on what is the first great period of scientific discovery — the Renaissance (1300-1600). Da Vinci was a painter, scientist, and inventor; Michelangelo was a sculptor, painter, and architect; and Copernicus was a mathematician, astronomer, physician, economist, and jurist, just to name a few. These men all blended science with art and design. Their example is my motivation for launching Project Fibonacci.”
Project Fibonacci STEAM Youth Conference, conceived by Drozd, is scheduled from July 31 to Aug. 6 at the Beeches Professional Campus in Rome.
Drozd has hired Daniel Kostelec as the STEAM outreach coordinator. “This is a first-of-its-kind event in the Mohawk Valley,” says Kostelec. “We’re reaching out to high schools, colleges, universities, government, and business to create a unique opportunity for students to discover their passion, explore a career, and realize their dreams. The program includes a wide variety of topics: the cosmos, neuroscience, the human body, art, graphics, photography, music, math, engineering, and science.”
Kostelec’s goal is to show the students that “Science without art lacks imagination; art without science has no form.” Project Fibonacci’s specific goals include broad community involvement; motivating and enlightening the next generation; creating scholars, musicians, artists, and engineers; making the Mohawk Valley an entrepreneurial hub, and helping to attract local tourism.
“We have established several benchmarks for grading the success of the program. First, will we draw the 250 to 300 attendees projected? Second, how many will return in 2017? Third, did the program generate a [financial] surplus to aid subsequent programs? Fourth, how many local internships were created? Fifth, what was the level of interest from private industry? And sixth, did the program have a positive impact on local college enrollment?” says Kostelec.
For this year’s conference, Drozd and Kostelec are planning on 75 percent of the attendees being 11th and 12th graders, with the other 25 percent college students.
“The tuition for the conference is $1,500,” says Kostelec, “It covers food, lodging, internationally recognized keynote speakers, transportation for offsite tours, and incidentals. The program is not accredited this year, but we are planning on affiliating with a local college in the future to grant credits. Also, this year there is no designated scholarship fund, but any surplus earned this year will go to seed next year’s event, which will include scholarships. I am happy to say that in lieu of a designated 2016 scholarship fund, a number of local school districts and companies have voluntarily provided scholarship assistance.”
Fibonacci
When this reporter asks why the project is named Fibonacci, Drozd smiles. “Leonardo Fibonacci (the son of Bonacci, 1170-1250) was a medieval mathematician who discovered a branch of mathematics that neatly describes emergent patterns in the realms of science, engineering, nature, art, and music,” explains Drozd. “He introduced the decimal system and the use of Arabic numerals into Europe and wrote extensively on business problems, such as how to calculate profit, how to price goods, and how to convert currencies. He is best known for the Fibonacci sequence (each succeeding number is the sum of the two preceding numbers), which appears in many different areas of mathematics and science.” Fibonacci was recognized all across Europe for his innovations, and his hometown of Pisa gave him a salary in recognition of his advising on matters of accounting and teaching the citizens of Pisa.
Drozd’s inspiration to create Project Fibonacci came from personal experience. While in high school, his son attended two Envision programs sponsored by George Mason University in Virginia. The experience had a profound effect on him. “I saw the impact the program had on my son,” notes Drozd. “Students face real challenges in understanding the opportunities available to them and a vision of how to go forward. Academic success is not enough today. In addition to knowledge, they need passion, innovation, and a plan to reach their goals. The Envision program seeks students with high academic achievement, leadership potential, a desire to build a focused career plan, and the maturity and confidence to meet the challenges of the program. The students are nominated by their teachers or are selected by an admissions board. It’s a great model that has worked for decades.”
Project Fibonacci is proceeding apace. “Registration doesn’t formally begin until April,” Kostelec says in a March interview, “but we have already received over 200 nominations just from emails, word-of-mouth, and town-hall events. Most of the nominations have come from the area, but we have received some from Long Island, Rochester, New York City, and even the states of Washington and California. We purposely made the nomination form a simple, one-page document that just asks for basic information and a summary of why the nominee should be considered. To be eligible, an applicant must at least be entering the junior year of high school and have demonstrated or shown the potential for leadership skills and an aptitude or interest in STEAM fields.”
Project Fibonacci is operating on a $500,000 budget this year. While tuition is expected to cover the majority of the cost, the conference has also garnered underwriting support from 22 sponsors (as of April 1). “We already have commitments of more than $100,000, and ANDRO is committed to add at least another $50,000,” stresses Kostelec. “The funds have come from school districts, the Rome [Area] Chamber [of Commerce], area foundations, business, the Oneida County Executive’s Office, colleges, and the Air Force Research Lab/Griffiss Institute. We’re thrilled at the outpouring of the community to support the conference.”
SUNY Polytechnic Institute has also stepped up to the plate by acting as the “conference banker” and by extending its 501(c)(3) designation to contributors. Its role is to receive income and to pay the bills. It bears no fiduciary obligation for the success of the program; that honor goes to Andy Drozd and to ANDRO. The staff at Project Fibonacci includes Kostelec and 10 employees at ANDRO who are offering support. The outreach coordinator says he also has 25 volunteers to help, but he will need another 75 by the time the conference begins.
STEAM campus
The STEAM conference is just the first step in Drozd’s dream to create a theme campus at The Beeches. “Orrie [Destito] (a principal at The Beeches), and I have discussed creating a STEAM campus to attract kids from kindergarten to college,” declares Drozd. “The campus would follow the MURI (multidisciplinary university research initiatives) concept which involves teams of researchers investigating topics and opportunities that intersect more than one technical discipline. I see Syracuse University, Mohawk Valley Community College, Onondaga Community College, Utica College, and other institutions collaborating with the STEAM students and issuing scholastic credits. Also, local businesses play a key role by creating internships and real-world opportunities for the students. This is how we get our kids back on track to be competitive in the global economy and not stuck in the 34th position in international rankings in math and science. In addition to the theme campus, Drozd and Kostelec are also looking at the opportunity to make the Fibonacci program available in different locations around the country and to create a version for younger children.
Drozd
Drozd founded ANDRO in 1994 as a niche-oriented R&D company that did groundbreaking work in electromagnetic effects. The company now specializes in providing simulation tools to analyze co-site and spectrum co-existence issues, offering its customers the ability to perform interactive computer modeling, simulation, and analysis to ensure that co-located communications don’t interfere with each other. ANDRO leases 25,000 square feet of office space on the 55-acre Beeches campus and also has offices in Dayton, Ohio and at the CASE Center in Syracuse. Drozd is considering opening a fourth office in the Washington, D.C. area. ANDRO currently employs 40 people and is in the process of hiring 10 more in order to focus on developing more private-sector business, specifically in the growing unmanned-aerial-systems sector. The company has grown 400 percent in the past four years and posted sales of about $7.5 million in 2015. Drozd is the sole shareholder.
Drozd was born in Belgium and immigrated to America at the age of 1. He attended high school in Rome and graduated from Syracuse University, where he received a bachelor’s degree in physics and math and, in 1982, a master’s degree in electrical engineering. His career included stints at the Rome Air Development Center, IIT Research Institute, General Electric, and Kaman Sciences Corp. Drozd also has taught physics at Utica College.
Drozd is committed to inspiring students and to helping them find their passion. It’s unclear whether he ever stood on his desk or created his own style of walking, but he has adopted an “unorthodox” method of teaching how to marry science and art. Leonardo Fibonacci is remembered for teaching the citizens of Pisa; Andy Drozd will be remembered for teaching the citizens of Rome, New York.
Contact Poltenson at npoltenson@cnybj.com
Lower gas prices, better jobs numbers prompt rise in statewide consumer sentiment
An analyst with Siena College believes lower gas prices, an improved stock market, and people feeling “a little more secure in their jobs” were factors in New Yorkers indicating a greater willingness to spend money in the first few months of 2016. Consumer sentiment in upstate New York was measured at 81.8 in March, up
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An analyst with Siena College believes lower gas prices, an improved stock market, and people feeling “a little more secure in their jobs” were factors in New Yorkers indicating a greater willingness to spend money in the first few months of 2016.
Consumer sentiment in upstate New York was measured at 81.8 in March, up 2.8 points from the last reading in December.
That’s according to the latest survey the Siena (College) Research Institute (SRI) released on Tuesday.
The December index reading of 79 was up 3.7 points from the previous measurement in September.
Upstate’s overall sentiment was 5.3 points below the statewide consumer-sentiment level of 87.1, which rose 1.9 points compared to December, SRI said.
New York state’s consumer-sentiment index is at its highest point since the winter of 2007. The New York City area is leading the way.
“But there’s no question New York City is carrying [the entire state in consumer sentiment]. They’re about 10 points higher than Upstate,” says Doug Lonnstrom, professor of statistics and finance at Siena College and SRI founding director.
Consumer sentiment in New York City measured at 90.7 compared to the upstate overall-sentiment figure of 81.8, SRI said.
But the statewide figure of 87.1 was 3.9 points lower than the March reading of 91.0 for the entire nation, which fell 1.6 points from December, as measured by the University of Michigan’s consumer-sentiment index.
In conducting the quarterly survey, SRI researchers ask respondents if they’re planning to buy certain major items in the next six months.
In this survey, “the buying plans are remaining strong,” says Lonnstrom.
In March, buying plans were up 0.2 points since the December 2015 measurement to 20.1 percent for major home improvements.
“Certainly [home-improvement retailers] Home Depot and Lowe’s look like they’re going to have a good spring,” Lonnstrom quipped.
Buying plans were down 1 point to 15.8 percent for cars and trucks; fell 3.3 points to 39.7 percent for consumer electronics; decreased 2.3 points to 25.4 percent for furniture; and were down 1.4 points to 6.3 percent for homes, SRI said.
“That’s pretty high to say that six percent of the people are going to buy a home in the next six months,” says Lonnstrom.
He also contends that the stock market was a factor in consumer sentiment during the first quarter.
It had a “horrible month” in January, but “bounced back” in both February and March. Consumer sentiment in New York, he noted, seemed to follow the same pattern.
“It dropped generally in January and it’s now bounced back,” says Lonnstrom.
Gas and food prices
In SRI’s quarterly analysis of gas and food prices, 30 percent of upstate New York respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 37 percent in December and 42 percent in September.
In addition, 27 percent of statewide respondents indicated concern about the price of gas, down from 33 percent in December and 35 percent in September.
“One out of four New Yorkers feel gas prices are hurting their budget right now, and that’s the lowest since we ever started … doing this survey,” says Lonnstrom.
SRI has been asking respondents about their concern regarding gas and food prices for nearly eight years, he adds.
When asked about food prices, 59 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 66 percent in December and 73 percent in September.
At the same time, 60 percent of statewide respondents indicated concern about the price of food, down from 67 percent in December and 69 percent in September.
SRI conducted its survey of consumer sentiment between March 7 and March 30 by telephone calls to 800 New York residents.
It has an overall margin of error of plus or minus 4.2 percentage points, according to SRI.
Contact Reinhardt at ereinhardt@cnybj.com
In today’s world of innovative technology, and the use of different types of communication, I for one, still value and prefer the good old-fashioned method of talking to people face-to-face. While I understand and appreciate the speed and efficiency of using email, texting, Twitter, and Facebook, I still prefer speaking to people directly. You get
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In today’s world of innovative technology, and the use of different types of communication, I for one, still value and prefer the good old-fashioned method of talking to people face-to-face.
While I understand and appreciate the speed and efficiency of using email, texting, Twitter, and Facebook, I still prefer speaking to people directly. You get to see their reaction to what you are saying as well as their body language, which I believe gives important feedback. Who among us hasn’t stared at an email or text and wondered what the intent of the message was?
Maybe it was my father’s influence on me when I was young that made me comfortable with direct conversation. He was a salesman, and in the summer, I would travel with him while he made sales-call visits to local, independent hardware stores. Often, I would be asked questions by the owners, and naturally I was encouraged to answer them. After graduating from college, I started working at a bank and my first job was talking to customers and prospects about a new product the bank was marketing. That new product was a debit card. I made a banking career out of calling on customers and speaking to them. Am I biased? The answer is yes, but for good reasons. One cannot deny the benefits of communicating directly with someone. In my opinion, these benefits include:
I certainly could not live without my smart phone, nor am I suggesting anyone should. I am, however, strongly encouraging that no one should rely solely on technology to communicate with someone. Technology certainly has its place and we are better off having it as another “tool” to use, in addition to using our voice. Just by getting to know someone, saying hello, or discussing the weather, things can lead to more meaningful conversations.
Here is a real example of how communicating recently benefitted me and the person with whom I spoke.
I went online to research a specific type of lawnmower. I could buy it at one of the big national retail chain stores in town, or go to a smaller independent store that is an authorized dealer. I decided to visit the local dealer and had a great conversation with an employee about the mower. Having experience servicing the mower, I knew he was explaining more about the features and benefits of this model than I would have received from online reviews. I was convinced right then to buy it from the dealer, rather than go to the larger retailer. The local dealer also discounted the price to make it less expensive than the competitor. I really appreciated that.
Was that a coincidence, or just a good outcome of actually taking the time to have a conversation with someone? I’d like to think it’s the latter. I will always recommend that people take the time to look up from their mobile device, and have a nice chat with another person. You never know what you may find out.
Michael Cartini is a business advisor at the Small Business Development Center (SBDC) at Onondaga Community College. Contact him at (315) 470-1973 or email: m.j.cartini@sunyocc.edu
N.Y. Family Business Center offers programs, peer groups
SYRACUSE — The New York Family Business Center (FBC) seeks to connect local family businesses with one another using educational programs and peer groups. The FBC currently operates as part of the Keenan Center for Entrepreneurship, Innovation and Creativity in Le Moyne College’s Madden School of Business. The organization offers generational peer groups and family-business
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SYRACUSE — The New York Family Business Center (FBC) seeks to connect local family businesses with one another using educational programs and peer groups.
The FBC currently operates as part of the Keenan Center for Entrepreneurship, Innovation and Creativity in Le Moyne College’s Madden School of Business.
The organization offers generational peer groups and family-business specific programs, such as succession planning, says Tracy Couto, executive director of the Family Business Center.
It also provides programs targeting general business functions.
“We’ve offered human-resources training. We’ve offered supervision training. We’ve offered all sorts of different programs [and] general business programs as well,” says Couto. She spoke to CNYBJ on April 19.
Besides her role as FBC executive director, Couto is also the associate director of the Global Jesuit Case Series at Le Moyne College.
The FBC views its emerging-generation peer group and a senior-generation peer group, both roundtable discussions, as the center’s “signature programs.”
“That’s an opportunity for members to just sit at the table with people in their same position. It doesn’t matter if the industry is the same,” says Couto.
The FBC finds that family businesses encounter the same problems and concerns, regardless of industry and company size, she adds.
The Family Business Center currently has 35 member businesses.
“Our membership fees are based on the [amount] of the revenue of the company, so they range from $600 to $2,000, depending on the size of the company. They can download an application on our website,” says Couto.
Founded in 2009, the Family Business Center (FBC) moved to Le Moyne in September 2013 after functioning as a stand-alone organization in the Syracuse Tech Garden.
Couto credits John Liddy, Le Moyne’s entrepreneur in residence, who has taken a “large role” in curriculum development for the FBC. Liddy is also treasurer on the FBC’s board of directors.
Couto also notes the work of Reneé Downey Hart, professor of practice at Le Moyne.
“She lends a really needed voice to the work that we do, so she does a lot of our curriculum development. She facilitates the senior peer group,” says Couto.
Couto is the daughter of Jack Webb, who retired as an executive VP with NBT Bank in 2015.
Webb was the former chairman and CEO of Alliance Financial Corp. (parent of Alliance Bank), before it was acquired by Norwich–based NBT Bancorp, Inc. (NASDAQ: NBTB).
Contact Reinhardt at ereinhardt@cnybj.com

Generations Bank to renovate Seneca Falls office in $1.2 million project
SENECA FALLS — Generations Bank plans to renovate its “flagship” branch office located at 19 Cayuga St. in Seneca Falls. The first phase of this two-phase project was slated to begin April 25, Generations Bank said in a news release. Geneva–based Mittiga Construction Co. is handling the $1.2 million project, Katie MacIntyre, assistant VP and
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SENECA FALLS — Generations Bank plans to renovate its “flagship” branch office located at 19 Cayuga St. in Seneca Falls.
The first phase of this two-phase project was slated to begin April 25, Generations Bank said in a news release.
Geneva–based Mittiga Construction Co. is handling the $1.2 million project, Katie MacIntyre, assistant VP and marketing officer at Generations Bank, said in an email response to a CNYBJ inquiry.
The banking company expects to complete the office renovation this fall.
All services at the Cayuga Street branch will remain “fully accessible” throughout the renovation, Generations added.
“Our Cayuga Street office has been a part of this community for nearly 40 years, and, as our service offerings continue to advance, it only makes sense to reflect these changes in our flagship retail location,” Menzo Case, president and CEO of Generations Bank, said in the release. “While our banking technology has evolved, we still feel strongly about the personal connection between our customers and employees. Customers can expect to see the same friendly faces at the office during and after the renovation.”
The renovations on the Cayuga Street office will produce a “similar look and feel” to the Generations Bank headquarters building, which is located at 20 East Bayard St. in Seneca Falls, the bank said.
Architect Thomas Anderson of M A Architects in Rochester designed the project for Generations, while Blynn Nelson Interior Design, also of Rochester, is handling the interior design work, according to MacIntyre.
The bank is redesigning the office, which was originally built in 1977, to incorporate “many modern and sustainable elements,” according to the release. They include floor-to-ceiling windows, carpet containing recycled content, and light-emitting diode (LED) lighting.
The renovated office will also include interactive teller machines, “state-of-the-art” technology, and improved handicapped parking for customers, Generations said.
Founded in 1870, Generations Bank is a wholly owned subsidiary of Seneca-Cayuga Bancorp, Inc., which generated $1.1 million in net income in 2015. It has total assets of nearly $282 million.
Generations Bank has nine branches, including Seneca Falls, Auburn (2), Geneva, Farmington, Phelps, Union Springs, and Waterloo (2), according to its website.
Generations Bank also has an insurance business, called Generations Agency (formerly called Royce & Rosenkrans Insurance), and financial planning and brokerage services offered by Generations Investment Services.
Contact Reinhardt at ereinhardt@cnybj.com
Visions FCU partners with Glen Wood Financial Group
ENDICOTT — Visions Federal Credit Union, headquartered in Endwell, recently announced a partnership with The Glen Wood Financial Group, Inc. in Binghamton, which is led by Glen Wood, president. Wood will provide Visions clients with financial advice. Visions contends that the synergies between these two LPL Financial broker-dealer platform groups will help the credit union
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ENDICOTT — Visions Federal Credit Union, headquartered in Endwell, recently announced a partnership with The Glen Wood Financial Group, Inc. in Binghamton, which is led by Glen Wood, president. Wood will provide Visions clients with financial advice.
Visions contends that the synergies between these two LPL Financial broker-dealer platform groups will help the credit union to provide additional financial products and services to residents of the Southern Tier and beyond.
“The relationship expands our reach and gives our members access to Glen’s unbiased advice based solely on what he believes is appropriate for each client — without any conflicts of interest from a parent organization,” Tyrone E. Muse, president and CEO of Visions Federal Credit Union, contended in a news release.
“I don’t just provide investment products. I educate and guide my clients to make informed decisions about their financial future by providing comprehensive financial advice,” Glen Wood said in the release.
Visions Federal Credit Union is a nonprofit financial institution fully owned by its members. Founded in 1966, Visions has $3.5 billion in assets and serves more than 178,000 members with offices throughout New Jersey, New York, and Pennsylvania.
Glen Wood, who has been providing investment advice for more than 30 years, formed Glen Wood Financial Group, Inc. in 2002. Wood is also a professor of finance at SUNY Broome, teaching coursework in financial planning and investment analysis.
LPL Financial, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), states that it’s the nation’s largest independent broker/dealer (based on total revenues, according to Financial Planning magazine. It has about 2,700 employees who serve financial advisors through independent-advisor services.
Contact The Business Journal News Network at news@cnybj.com
First Niagara CEO Crosby, two others named to KeyCorp board
Acquisition expected to close in Q3 KeyCorp (NYSE: KEY) on April 22 announced that three members of the First Niagara Financial Group (NASDAQ: FNFG) board will join its board of directors once the acquisition closes. The addition of the First Niagara directors is part of the acquisition agreement, according to a news release from KeyCorp.
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Acquisition expected to close in Q3
KeyCorp (NYSE: KEY) on April 22 announced that three members of the First Niagara Financial Group (NASDAQ: FNFG) board will join its board of directors once the acquisition closes.
The addition of the First Niagara directors is part of the acquisition agreement, according to a news release from KeyCorp.
The three new directors will increase the size of KeyCorp’s board to 17 members.
Cleveland, Ohio–based KeyCorp, parent company of KeyBank, expects the acquisition to close in the third quarter of this year. It “remains subject to regulatory approvals,” the banking company added.
The First Niagara directors include Gary Crosby, Austin Adams, and Carlton Highsmith.
“Bringing KeyCorp and First Niagara together has many benefits for our clients, shareholders, and communities, including the opportunity to add such talented individuals to our board,” Beth Mooney, chairman and CEO of KeyCorp, said in the release.
The acquisition will create a regional bank to serve 3 million clients across the Northeast, Mid-Atlantic, Midwest, and Pacific Northwest, Key says.
It will make Key a leading bank in upstate New York, with a “strong” market presence in Syracuse, Buffalo, Albany, and Rochester, the company boasted.
About the directors
Gary Crosby has been president and CEO of First Niagara since 2013. He had previously held several different positions within First Niagara, including COO and chief administrative officer. He has been a director of First Niagara since 2013.
Austin Adams retired from JPMorgan Chase (NYSE: JPM) in 2006, where he served as the corporate chief information officer. Prior to his role at JPMorgan Chase, he was the chief information officer at Bank One (NYSE: ONE). Adams has been a director of First Niagara since 2014.
Carlton Highsmith founded and served as president and CEO of The Specialized Packaging Group until its merger with PaperWorks Industries in 2009, according to KeyCorp. He then was vice chairman of the board until his retirement in 2010. Highsmith had previously been a director of New Alliance Bancshares, Inc., which First Niagara acquired in 2011. He has been a director of First Niagara since then.
Contact The Business Journal News Network at news@cnybj.com
Bank of America launches mortgage program geared to low- and moderate- income homebuyers
Bank of America (NYSE: BAC) has rolled out a new mortgage program that it contends provides low- and moderate-income homebuyers access to a “responsible lending product with counseling at affordable entry prices.” The Charlotte, North Carolina–based bank, the nation’s second largest, on Feb. 22 announced its “affordable loan solution” mortgage in partnership with Self-Help Ventures
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Bank of America (NYSE: BAC) has rolled out a new mortgage program that it contends provides low- and moderate-income homebuyers access to a “responsible lending product with counseling at affordable entry prices.”
The Charlotte, North Carolina–based bank, the nation’s second largest, on Feb. 22 announced its “affordable loan solution” mortgage in partnership with Self-Help Ventures Fund and Freddie Mac (OTCQB: FMCC).
Self-Help Ventures Fund is a Durham, North Carolina–based nonprofit loan fund, while Freddie Mac is the shortened common name for the Federal Home Loan Mortgage Corporation.
“What we’re trying to do is make people’s financial lives easier,” says Michael Brunner, Central New York market president for Bank of America, which ranks sixth in deposit market share in the 16-county Central New York market, according to the latest FDIC data. He spoke with CNYBJ on April 25.
“The product that we have is designed to help the low- to moderate-income earner be able to purchase a home and purchase a home in a way that makes sense,” Brunner adds.
The marketplace has a “need for more responsible” mortgage products that enable creditworthy homebuyers, who meet certain income limits and other requirements, to become homeowners at an “affordable entry point with comprehensive counseling,” D. Steve Boland, consumer lending executive at Bank of America, said in the bank’s Feb. 22 news release.
“Affordable Loan Solution combines Bank of America’s wide distribution network of mortgage professionals with the borrower support expertise of Self-Help and market liquidity provided by Freddie Mac to provide a new affordable loan option,” said Boland.
FHA not involved
The Wall Street Journal in a Feb. 22 article described the program as one that represents “an end run around a government agency that punished the bank for making errors on similar loans.”
The loan program allows borrowers to avoid private mortgage insurance, which is required for low down-payment loans to protect lenders and investors, the publication said.
“That could make the new loans cheaper than those offered through the Federal Housing Administration [FHA], the government agency that has won big settlements from banks in recent years for what the lenders describe as minor errors,” according to the newspaper.
Bank of America in 2014 agreed to a $16.65 billion settlement with the U.S. Department of Justice for “financial fraud leading up to and during the financial crisis,” according to an Aug. 21, 2014 news release on the department’s website.
The bank had conceded that it originated “risky” mortgage loans and made “misrepresentations” about the quality of those loans to Fannie Mae, Freddie Mac and the FHA, the Justice Department said in the release.
The FHA doesn’t make loans but insures lenders against default on mortgages where the borrower’s down payment is as low as 3.5 percent and the borrower’s credit score is as low as 580, on a scale of 300 to 850.
Bank of America’s new mortgage program takes the FHA “out of the process,” the Wall Street Journal reported. It instead relies on the partnership with Freddie Mac and Self-Help.
How the program works
Bank of America sells the loans, including servicing rights, to Self-Help, which will provide post-closing counseling for any borrowers who might be having payment difficulties.
“Self-Help [Ventures] Fund takes on the servicing from day one … and the education component with the borrower to help them make sure that they’re budgeting and keeping track of this,” says Brunner.
After origination, Bank of America will “immediately” transfer loan servicing to Self-Help’s designated specialty servicer, who will handle all loans regardless of future performance, according to the bank’s news release.
Freddie Mac collaborated with Self-Help and Bank of America to define credit terms and recently approved Self-Help as a seller/servicer to facilitate the rollout of this offering to borrowers.
Freddie Mac will purchase all of the eligible affordable mortgages originated through the Self-Help and Bank of America partnership, the banking company said.
Borrowers may use secondary financing, such as an affordable second loan, grants, or even cash they have on hand. The program will also consider non-traditional forms of credit to demonstrate credit history.
To be eligible, applicants’ income cannot exceed 100 percent of the area median income as defined by the U.S. Department of Housing and Urban Development.
Applicants must occupy the property, and first-time buyers will need to participate in homebuyer education through Bank of America’s Connect to Own nationwide network of counselors.
Bank of America contends that its “affordable-loan solution” mortgage program will include an extensive quality control routine with Freddie Mac that promotes responsible underwriting and reduces potential risks to Bank of America and Freddie Mac.
Contact Reinhardt at ereinhardt@cnybj.com
M&T Bank credits changes for surge in its SBA-backed loans
SYRACUSE — M&T Bank is crediting several changes it made to its small-business lending model for the jump in its March loan-approval volume in the Syracuse district of the U.S. Small Business Administration (SBA). M&T Bank approved 49 SBA-backed loans in the agency’s (7a) program during March, which almost equaled the 51 such loans it
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SYRACUSE — M&T Bank is crediting several changes it made to its small-business lending model for the jump in its March loan-approval volume in the Syracuse district of the U.S. Small Business Administration (SBA).
M&T Bank approved 49 SBA-backed loans in the agency’s (7a) program during March, which almost equaled the 51 such loans it approved from October through February — the first five months of the 2016 fiscal year.
In all, M&T Bank has made 100 loans in the 7(a) program, totaling $6.8 million, in the first half of the current fiscal year, according to SBA figures.
The 7(a) loan program is the “most widely used,” access-to-capital SBA program, with “flexible” use of proceeds and a loan maximum of $5 million, the agency says.
The SBA also has a 504 loan program, which offers long-term, fixed-rate financing for major assets such as land, building, and equipment, with a loan maximum of $5 million.
The SBA’s Syracuse district includes 34 counties in Central and Eastern New York.
M&T Bank “reassessed and lowered and streamlined” its processes and minimum dollar threshold, says Lee DeAmicis, regional business banking manager who works in the bank’s Syracuse office. He spoke to CNYBJ on April 22.
DeAmicis says M&T assesses the marketplace to determine what the needs are, indentifying what he called “microbusinesses,” or those companies that generate revenue of less than $1 million per year.
M&T determined it could meet a need for small-business lending in the SBA Syracuse district and “streamlined” some of its processes.
“We’ve lowered our threshold of the minimum loan size, particularly [commercial] lines of credit, from $25,000 to $5,000, and we added some staff to make sure we could get those increased volumes through the pipeline,” says DeAmicis.
Besides the reduced loan minimum for its SBA-backed loans, M&T also made the application process “easier” for the small-business market, streamlining the initial paperwork the bank needs to consider such loans.
The banking company also added staff to its Buffalo office to handle the small-business loan processing and underwriting functions.
Another change, DeAmicis notes, targeted M&T’s branch managers.
“We put in place a focus for them to go out and work with their small-business customers and prospects to bring this product to the marketplace,” he says.
M&T in March approved SBA-backed loans for some smaller trucking companies and retail operations.
“Startups are very risky and that’s where we often use the SBA to help offset the riskiness of industries like that,” he says.
Contact Reinhardt at ereinhardt@cnybj.com
NBT profit rises nearly 4 percent in first quarter
NORWICH — NBT Bancorp Inc. (NASDAQ: NBTB) reported net income of $18.9 million, or 43 cents a share, in the first quarter, up 4 percent from $18.2 million, or 41 cents, in the year-ago quarter on the strength of loan and deposit growth. “Our first quarter 2016 results demonstrate our strong financial performance and sustained
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NORWICH — NBT Bancorp Inc. (NASDAQ: NBTB) reported net income of $18.9 million, or 43 cents a share, in the first quarter, up 4 percent from $18.2 million, or 41 cents, in the year-ago quarter on the strength of loan and deposit growth.
“Our first quarter 2016 results demonstrate our strong financial performance and sustained favorable trends in organic loan and deposit growth and asset quality indicators,” Martin Dietrich, NBT’s president and CEO, said in its earnings report issued on April 25.
NBT Bancorp, holding company for NBT Bank, reported net interest income of $64.6 million in the first quarter, up almost 4 percent from $62.2 million in the year-earlier period.
Its fully taxable equivalent net interest margin was 3.47 percent for the three months ending March 31, 2016, up from 3.42 percent last quarter but down from 3.60 percent for the first quarter of 2015. The increase from the previous quarter was driven by a rise in yields on loans, partially offset by slightly higher costs of interest-bearing deposits, NBT reported.
NBT produced noninterest income of $28.4 million in this year’s first quarter, up almost 7 percent from the same quarter in 2015.
Noninterest expenses for the three months ended March 31, 2016 totaled $58.2 million, up from $57.7 million in the first quarter of 2015.
Asset quality
NBT reported net charge-offs of $4.8 million in the first quarter, up from $4.6 million for the same period in 2015. The banking company recorded a provision for potential loan losses of $6.1 million in the first quarter, up from $3.6 million in the first three months of last year. NBT said in its earnings report that it did so primarily due to loan growth.
The ratio of annualized net charge-offs to average loans for the first quarter of 2016 was 0.33 percent, compared with 0.34 percent for the first quarter of 2015.
The ratio of nonperforming loans to total loans was 0.69 percent as of March 31, 2016, down from 0.85 percent a year prior.
NBT said past-due loans as a percentage of total loans came in at 0.51 percent as of this March 31, compared to 0.56 percent on the same date in 2015.
The banking company’s allowance for loan losses totaled $64.3 million at the end of this year’s first quarter, compared to $65.4 million a year earlier.
NBT Bancorp had total assets of $8.5 billion as of March 31, 2016, up by $210.3 million, or 2.5 percent, from the end of 2015. It had $6 billion in loans and $6.9 billion in deposits, as of the end of the first quarter.
Stock-repurchase program
NBT said it repurchased more than 675,000 shares of its common stock during the first quarter of 2016 at an average price of $25.45 per share under a previously announced stock buyback plan. As of March 31, it had more than 277,000 shares available for repurchase under this plan, which is set to expire at the end of this year. On March 28, the NBT board of directors approved a new program for the banking company to repurchase up to an additional 1 million shares of its shares outstanding. That plan expires at the end of 2017.
NBT Bank has 155 branches in six states — New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, and Maine. It ranks second in deposit market share in the 16-county Central New York market, with a 10 percent share of all deposits, according to the latest FDIC data.
Contact Rombel at arombel@cnybj.com
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