Entrepreneurs Remain Loyal to Commercial Lenders

YOUNGSTOWN, Ohio – Bankers see themselves as partners of the companies they serve, as sources of counsel and advice, not just providers of credit.

They’re vested in their customers’ success, which requires much more than assessing risk and offering the appropriate terms, bankers say. Money is fungible, so what leads a company to use and stay with a bank is the relationship – bankers love that word – its senior management has with the team a bank assigns to meet its needs.

Five banks allowed The Business Journal to meet with them and their customers to report how they sustain and nurture those relationships.

New Castle School of Trades Relies on PNC

The resources of PNC Bank have best met, and are meeting, the New Castle School of Trades’ plans for growth, says Rex Spaulding, president and CEO of the school.

Those plans, executed and in progress, saw the construction of its 11-acre main campus, 4117 Pulaski Road, New Castle, Pa., and the satellite campus to open next year in East Liverpool.

“We couldn’t have done it without PNC,” Spaulding says, especially “the historic tax credits. Ted Schmidt [Youngstown regional president] spent 22 months working on it to make it happen. I had discussions with Ted late at night, on weekends, to make [the East Liverpool campus] possible.”

And Spaulding calls Dennis Krancevich, PNC vice president for commercial lending, “the quarterback” of the PNC Youngstown team of five who fill the banking needs of the school of trades.

“Dennis always immediately gets back to me, weekends, evenings, whenever,” Spaulding says.

Spaudling and Krancevich see each other monthly and text or email each other more often. Joann Melnick in the accounting department at PNC’s headquarters in downtown Youngstown is “constantly” in touch, Spaulding says, to ensure everything is working smoothly.

PNC financed the construction of the newer main campus of the New Castle School of Trades when it moved east from its original campus, built in 1945.

The buildings on the main campus cover 93,000 square feet. It sits just north of U.S. 422. There 50 faculty teach 12 programs to just under 600 students working toward associate degrees. The original campus of 45,000 square feet, now a satellite, sits a half-mile inside Pennsylvania on 422.

PNC Bank is financing construction of the East Liverpool campus, just as it financed construction of the complex on Pulaski Road.

The East Liverpool campus will eventually enroll 250 students where 24 instructors will teach truck driving, welding and electronic technology, Spaulding says.

Besides the commercial mortgages PNC holds, the bank provides the school with treasury management and merchant services, and operating and equipment lines of credit. The school also offers PNC’s “Workplace Banking” to its faculty and staff.

Employees who enroll in workplace banking open checking accounts with PNC, where their paychecks are directly deposited, and get a break on rates. They earn slightly more on savings instruments and pay a little less on mortgages, auto loans and other loans they take out.

“PNC has a great reputation,” Spaulding says, which resulted in The New Castle School of Trades switching to the bank.

“It’s a relationship of trust,” he continues. “We can trust the information they provide. And they’re responsive. We just went through a complex deal [securing the tax credits] and it was impressive the experts they could turn to across the country.”

The formal relationship began in 2011 when Krancevich signed the school. It culminated two years of meetings with its leadership, Schmidt says, including Spaulding and Krancevich playing golf.

“We have a level of comfort with him,” Spaulding says of Krancevich. “We have a greater feeling of trust.”

Mangiarelli Trusts Seven Seventeen Credit Union

Paula Mangiarelli had no doubt about whom she would approach to finance her physical and occupational therapy center in Howland when she set out on her own in 2010: Seven Seventeen Credit Union.

Before she opened, Mangiarelli politely dismissed expressions of interest from banks as she completed her business plan at the Small Business Development Center at Youngstown State University.

Coming from a family who believed in credit unions when she grew up in Buffalo, N.Y. – her father served on the board of a credit union there – Mangiarelli joined Seven Seventeen in 1987 when it expanded its field of membership.

Today, Seven Seventeen and its vice president for commercial lending, Brett Carnahan and his staff, have met all of Mangiarelli’s expectations and needs and they’re exploring her desire to expand.

Seven Seventeen holds the mortgage on her 5,600-square-foot building. Before she opened, the credit union provided her with financing to run her business in a building nearby as repairs were made on Mangiarelli Rehabilitation, 8935 E. Market St. And the credit union extended a line of credit for her day-to-day needs shortly after she opened.

Most recently, Seven Seventeen set up direct deposit of payroll for her nine employees.

Mangiarelli, a licensed physical therapist, was a partner in the rehabilitation center in her building, erected in 1991. When her partners moved on, she bought them out and took out a mortgage from Seven Seventeen to become full owner.

By that time, the building needed extensive repairs, especially the heated swimming pool. Carnahan saw her business plan and knew her record of responsibility, he says.

Besides the heated pool, the center has an orthopedic center and offers occupational therapy to clients who range from high school students who suffered sports injuries (including cheerleaders) to people injured at work to older people slowed by age.

Most high school students treated for injuries incurred them playing football but soccer, basketball “even volleyball,” Mangiarelli says, have their share. Concussion protocols are much more frequent. “Our athletic trainer [who serves Howland High School] does all the protocols,” she says.

Each month, the center has some 700 visitors who use its equipment and the pool.

The appraiser Seven Seventeen hired in 2009 to assess the building called the pool “a detriment,” Mangiarelli recalls. The nearest firm capable of making the repairs was in Cleveland.

Carnahan arranged the term loan for the repairs. The building needed to be repainted, the interior remodeled and new occupational therapy equipment was needed, all financed by a term loans and Mangiarelli’s savings.

Carnahan says Mangiarelli was easy to work with. “She had her blueprint [business plan] laid out. Her projections were reasonable,” the lender says. “She had her timeline and her business plan wasn’t pie in the sky. … Her core plan was solid.”

Helping Seven Seventeen say yes to Mangiarelli’s need for credit, Carnahan says: “She was established with the insurance carriers.”

Carnahan and his staff have been responsive, Mangiarelli says. “Things happen quickly” and the commercial lending department always responds within one business day, the owner says.

Carnahan visits the center at least twice a year and he and his staff phone, text and email as needed to ensure the center is running smoothly and to alert Mangiarelli of products that could benefit her.

Two of her children, son Bobby Mangiarelli and daughter Sarah Mangiarelli-Boyle – both have doctorates in physical therapy – work at the center. Another son, Michael, is a 18 months away from receiving his doctorate and returning.

It’s with them in mind that their mother is exploring buying adjacent land and enlarging the building. She treated their injuries when they played sports at Howland High, Mangiarelli says, and all are committed to where they grew up.

And it seems likely Seven Seventeen will finance that growth.

Eagle Rental Follows Home Savings’ Hierro

Companies often feel more loyal to the bankers who serve them than the banks they represent.

Joe Fischer, owner and president of Eagle Rental Purchase, 6132 Market St. in Boardman, first met Frank Hierro when he worked for another bank.

Hierro, Mahoning Valley regional president of the Home Savings and Loan Co., rekindled that relationship after joining Home Savings.

“We had more of a personal relationship,” Fischer says. “We’re loyal to the people who got us where we are,” to wit, 10 stores across northeastern Ohio (including two in the Mahoning Valley) with 55 employees and $6.5 million in annual sales.

Eagle rents furniture, appliances and computers – even phones – by the week or the month and affords its customers the opportunity to buy them. “We offer an alternative way to purchase,” Fischer explains. The customer can rent to own or return the item. “Sixty-five percent of the items are returned,” he says.

Fischer’s relationship with Hierro was born in the worst of the times, during the onset of the Great Recession when Eagle Rental opened its first store in Cleveland.

“We fought and clawed” to get established, Fischer says.

His efforts, with those of company vice president, Randy Lewis, led to second and third stores opening by 2010.

“Frank brought an understanding of what we do,” Fischer says. “He’s an old-school banker.

“Frank didn’t just look at the surface,” Lewis picks up. “He took the time to see what was there.”

“To other banks,” Fischer adds, “we were a numbers game.”

Home Savings is the bank that meets most of Eagle Rental’s needs. Credit card processing is the only major area it doesn’t. Otherwise it furnishes deposit services, credit (term loans and lines of credit) and treasury management such ACH (automated clearinghouse) payments and remote capture.

“It’s easy to transfer funds,” Lewis says.

Home Savings nurtures its relationship with Eagle Rental though its office in Boardman where manager Frank Constantino and commercial lender Joe Fanto stay in touch, usually by phone, texts and emails.

“When we call Home Savings,” Lewis says, ”we know who’s going to help us.”

A Home Savings commercial lender stops by Eagle Rental headquarters at least twice a year. “We meet face-to-face three or four times a year,” Fischer says.

“We met just after the first of the year when they completed their planning for 2016,” Hierro says. “We saw their projections and asked how we could help.”

“They’re very responsive and we’re low maintenance,” Lewis says with a grin. “They’ve been visionary with us and given us good advice to get us where we want to be. We can move forward with confidence because we know we’ll have funding when we need it.”

Among the attributes Hierro likes about Fischer and Lewis are their 30-plus years in the rent-to-own business and their dedication to serving their customers. “They’re successful because they take care of their customers,” the banker says. “They’re hands-on. They have great insights.”

Their years of experience aren’t reflected in the balance sheet, Hierro says, but those years “give us confidence” in meeting Eagle Rental’s needs.

Providing Eagle Rental’s commercial needs spills over into meeting Fischer’s personal financial needs. “Jeannie Montgomery, at the Boardman branch,” he says, “helped me refinance a loan. She did a great job.”

Humtown Follows Talmer Bank’s Chickonoski

The relationship between Talmer Bank and Trust and Humtown Products, Columbiana, is as much personal as it is business.

The president of Humtown, Mark Lamoncha, and Talmer managing director Perry Chickonoski and their wives have dinner and attend sports events together. In short, Chickonoski and Lamoncha have a personal as well as a business friendship.

“It’s easy to compete on price and structure,” Chickonoski says, “but that’s not our [Talmer’s] sole means of doing business. It’s about relationships based on trust, service, knowing one another and understanding the other’s needs.”

Humtown, a family business founded in 1959, manufactures sand cores, molds and patterns for the foundry industry.

Lamoncha met Chickonoski when he worked for another bank. It was Humtown’s accountant, Tom O’Neill, managing partner of Schoedel, Scullin & Bestic LLC, who introduced them and he sits in on their discussions when asked.

Both O’Neil and Chickonoski helped Humtown weather the Great Recession when Lamoncha saw his order log evaporate and his workforce all but disappear.

The company had suffered rough times before, Lamoncha says, but nothing like 2007, 2008 and 2009. Through it all, Talmer and its predecessor, First Place Bank, stood by him. “Humtown understood the key metrics,” says Bob Kempe, group manager commercial for Talmer in Boardman, and emerged stronger for the experience.

“As a banker, you appreciate working with a company that went through what Mark went through,” Kempe says. “They’re more cautious. …

“Mark understands the value of what we bring. He bounces things off us to learn our opinion. He’s an entrepreneur.”

The commercial products Talmer provides Humtown are similar to the products other banks could offer: a commercial mortgage; two lines of credit, one for working capital, the other to manage accounts receivable; a term loan that financed equipment; treasury management services; and three investment funds to handle surplus cash, “like a rainy day fund,” Lamoncha explains.

And soon the president of Humtown will move his personal accounts to Talmer Bank and Trust as well, he says.

Lamoncha likes the amenities Talmer provides him and other commercial customers, such as breakfasts, mixers and the receptions Talmer hosts.

A recent breakfast had U.S. Rep. Bill Johnson, R-6 Ohio, address the small-business owners Talmer serves in the Mahoning Valley. And Lamoncha appreciated meeting Talmer’s senior management, who came from Troy, Mich., to host the reception last October in the DeYor Center.

Lamoncha likes the attention Talmer staff gives his company. “It used to be the bank didn’t come out to see you,” he recalls. “You had to go to them.”

He’s impressed by Chickonoski’s background and expertise – the banker was a CPA before becoming a commercial lender – and interest in his company. Chickonoski sees that simply as an aspect of serving Humtown. “I can’t serve you unless I go out and visit your plant,” he reminds Lamoncha.

Besides Chickonoski visiting the Humtown plant, his assistant, Jordan Rogers, and an intern, Phil Steiner, stay in touch through phone calls, emails and texts. Moreover, Lamoncha was pleased when Mike Alexander from Talmer’s treasury management department toured the plant as part of his quarterly review of seeing its needs were met.

Lamoncha isn’t sure whether he could borrow at lower rates of interest or pay less in fees if he used another bank. He sees value in what Talmer provides and says he deletes the email feelers other banks send. “I don’t want to move,” he declares.

General Extrusions Follows Huntington’s Cameron

The Schuler family, owners of General Extrusions Inc., Boardman, has worked with various banks – local and out-of-state – and many bankers since they entered the aluminum business in 1950.

As a middle-market company, commercial banking needs of General Extrusions are several and banks have competed to meet them. Huntington Bank became its primary lender in July 2015.

Daryl S. Cameron, vice president for commercial banking at Huntington, has known the Schulers more than 20 years. In the mid 1990s, while working for another bank, Cameron got to know its former CEO, Herbert Schuler Sr., son of the founder and father of today’s president.

“I established a relationship with his father,” Cameron says in the General Extrusions conference room. He was impressed by what he saw and learned.

“I’ve known Daryl a long time,” Schuler Jr. says. They renewed and strengthened their ties two years ago when Cameron, a banker 24 years, began calling on Schuler Jr. to inform him of how Huntington could better meet his credit needs.

“I liked their loan terms better,” Schuler says, “and how they measured collateral. … I liked Huntington’s local team. Our previous bank was out-of-state. … They [Huntington] came to us with the best deal.”

Bill Shivers, regional president for Huntington, toured the plant on Lake Park Road and met Schuler Jr. and General Extrusions’ chief financial officer, Rosemary Athey.

“Bill visited and was very impressed,” Cameron recalls.

In addition to Huntington’s ability to meet the credit needs of General Extrusions, Cameron and his team offered advice. “We toured the plant,” Cameron says. “We talked about how to best finance a piece of equipment to reduce the scrap rate.”

During his visits to the plant, Cameron’s sense “the company was a good fit” for Huntington was reinforced. “They have a good management team,” he says. “The Schulers do things the right way and are not overextended.”

As did so many other companies, General Extrusions suffered during the Great Recession, “but they came out of it because they had a plan,” Cameron says. “They made the tough decisions and they are doing well today. … We understand extrusions companies.”

Huntington has refinanced General Extrusions’ mortgage and extended a revolving line of credit. It also signed a seven-year lease to finance equipment in the plant.

Schuler says his company makes full use of the bank’s treasury management services, which include direct deposit of payroll to his 62 employees, and welcomed treasury management specialist Connie Bobby when she visited the plant and John Straka, a Huntington regional credit officer on his stop.

So pleased is Schuler with how well Huntington meets the needs of General Extrusions he says he’s exploring how to make use of more of its services.

Cameron is philosophical: “You don’t sell them everything but you stay on top of their needs.”

Pictured: PNC Bank’s Ted Schmidt has a close relationship with Jim Buttermore and Rex Spaulding at their trade school.

 

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