goleader.com - Union County, NJ Newspapers 97sep11

westfield nj
INSTITUTION EARMARKED FOR FORMER PLASTER PALACE SITE

Application Now Before State For First Community Bank In Westfield Since the 1930s

By PAUL J. PEYTON Specially Written for The Westfield Leader

With over 25 years in the banking industry under his belt, the biggest achievement for Frank N. Goffreda may be still before him -- bringing community banking back to the Town of Westfield.

If approved, the Town Bank of Westfield would become the first locally-owned, independent commercial bank to open in Westfield in over 70 years.

The town has about a half dozen or so banks currently -- with none of them headquartered here -- a big change from yesteryear when Westfield was the place for banks to have their headquarters.

The mission statement prepared by the proposed bank’s Board of Directors noted the bank would be founded by local businessmen and professionals with a commitment "to the concept of traditional community banking, believing that there exist outstanding opportunities to serve local markets otherwise ignored by the impersonal money center banks.

"This commitment is founded in the recognition that local control, ownership and decision-making is integral to the sustained success and economic health of the citizens within the communities it serves."

If state and federal regulatory agencies give the green light later this year, the Town Bank of Westfield could be open for business by next March. Applications have been filed with both the State Department of Banking and the Federal Deposit Insurance Corp. (FDIC). The latter is required before a bank can open.

The proposed bank’s Board of Directors have already raised $2 million of the $5 million minimum required to gain approval by New Jersey banking regulations. Mr. Goffreda, who will serve as the Chief Executive Officer (CEO) of the bank, said the total capital when the bank plans to open next year would range from $5 to $9 million.

The capital raised thus far equals roughly 30 percent of the total investment needed. The other 70 percent of the capital investing in the financial institution would be "widely held." The maximum allowed per investor is $100,000. By law, the new bank would not be able to pay dividends for the first two or three years.

The proposed site for the new bank would be at the former Plaster Palace building on South Avenue. By not being in the hub of current banking institutions in Westfield, Mr. Goffreda said, this would "free up space for other entities to come in."

The application for the new bank was filed on August 12. State Department of Banking officials have 90 days to review the application, which has been accepted but not approved, and issue a hearing date on the application. Mr. Goffreda said he expects a hearing by mid-October.

It is at the hearing when the names of officials of the bank can be officially released to the press. The department would have 15 days to make a decision on the application.

Although a resident of Sparta, Mr. Goffreda has worked in Westfield or Union County for most of the past six years. Although he could not release the names of the proposed board members, he said, all live and work in Westfield or the surrounding area.

"They all have roots in the community," he explained.

Most recently employed as the Regional Vice President and Business Banker at the Westfield branch of Fleet Bank, Mr. Goffreda said the idea to start a community bank goes back at least five years, when persons in town began recommending such a financial institution.

Mr. Goffreda said he envisions the Town Bank becoming a lot like the old Central First National Bank of Central Jersey, which was acquired by National Westminster Bank (NatWest) a few years ago. NatWest, in turn, has been taken over by Fleet Bank out of Boston.

Former Westfield Mayor Bud Boothe said the new bank could serve as an encore for business development on the south side of town, as well as for merchants in town seeking quick approval of small business loans.

"I think it is a very positive development as far as the merchants are concerned," said Mr. Boothe.

While at Central Jersey, Mr. Goffreda managed the bank’s interest in Union County, and was responsible for business and corporate development.

"We were the top performers for the bank, four years in a row," he stated. "It was a very busy lobby. People enjoyed coming -- and we would try to recreate that."

Mr. Goffreda said he expects the bank would get involved in the community with such organizations as the Westfield Symphony Orchestra, The New Jersey Workshop for the Arts and Children’s Specialized Hospital in Mountainside.

Jane Kelly, President of the symphony, said she recalls the days when she dealt with the former Horizon Bank, which later became Chase Manhattan Bank and now operates in town as Chemical Bank of New Jersey. She said the bank offered personalized service, such as knowing each of its customers and providing quick and friendly service.

"If that is the service this new bank will offer -- that will be fabulous," she said.

If the Town Bank gains approval from the state and the Westfield Planning Board, the next order of business would be to begin soliciting for the rest of the capital needed to make the bank a reality.

Projections call for construction to commence by early November. An application was expected to be filed with the town Building Department this week for inclusion on the board’s agenda next month.

Construction is expected to be completed by February, with the bank set to open by mid to late March if all goes according to plan. The building will have a 14-space parking lot, as well as two drive-in lanes and one exit lane. The drive-in lanes would have stacking capability for 14 cars. Two rear garages would be demolished to provide additional space.

The property is currently owned by Conjoe Realty. The bank’s officials have signed a long-term lease with an option to buy the building and property in 10 years.

"It will be a walk-in facility with parking," said Mr. Goffreda.

It is expected that the state would keep a close watch over the institution during the first few years, thus the bank would not be able to branch out that quickly and would have to show performance records each of the first few years.

Mr. Goffreda estimated that the greater Westfield area has over $7 billion invested in banking institutions.

"So if we capture a very small portion of that depositor base, we will be well on our way," he said.

The bank would be a personal computerized-based bank featuring day of deposit/day of withdrawal profiles, on-line account activity and electronic transfers.

Copyright 1997
TheWestfield Leader
Send your comments to:
editor@goleader.com
Revised: September 14, 1997.