As humans we are drawn to other humans. We find comfort and strength in bonding together to form close knit groups that keep in mind the interests of the entire group rather than focusing solely on the needs of any one individual. We call these groups communities and we create them in nearly every aspect of our lives; our neighborhoods are communities, at work we may have another close-knit community and online we can have communities based on common interests not bound by geography. With community playing such a key role in our lives, it seems like a natural step to create financial communities. This was the vision that Josh Siegel had in 2003 when he founded StoneCastle Partners which has grown to be one of the largest and most respected firms in community banking.
It’s the purest of banking, Siegel explained recently in an interview with Deepak Chopra. All they do is they collect the local dollars of people like us, they put in together and give it to a person in their community; it’s very community oriented. It’s starting a business, it’s buying their first house. It’s doing something very connected and personal.
These community banks are not only better in terms of the personal touch that they provide; they also tend to do a better job fiscally as well. They lose less money, believe it or not, than the money center banks, they earn a better rate of return for their investors and they do more good, says Siegel. In other words, they do everything that the larger mega banks do but on a manageable scale which allows them to be more successful.
It’s a simple and refreshing model; one that keeps a community’s money in that community and making sure those dollars are working for the people who need them. Josh recounts unusual stories of community banks helping in towns where natural disasters have hit without focusing on how they will recoup profits. Why? Because the banker is a member of that community and has a personal connection to the people with whom he does business. It is the humanization of fiscal responsibility. Banks don’t have to be the huge, profiteering machines that they so often turn into. Banks can and should treat people like people. It’s not just a pipe dream. Josh Siegel has proven that it works.
21:25 | 2013