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Home Savings celebrates 125 years
Home Savings and Loan Co. has been a part of Youngstown since 1889
By Kalea Hall
YOUNGSTOWN
The Home Savings and Loan Co.’s skylight has lit up the Youngstown skyline since 1949.
But long before the illumination became famous, Home Savings lit its path and solidified its footprint in the Mahoning Valley.
This year, the bank celebrates its 125th anniversary.
“It has been here [on Federal Street] for 97 years, and we will be here for another 97 years,” President CEO Gary Small said. “We believe in the Valley and continue to invest in the Valley.”
James M. McKay founded Home Savings, which received its charter Jan. 15, 1889. McKay, an attorney, established the bank in the Excelsior Block, a building on Federal Street. When more room was needed for the bank, the headquarters relocated to the Mahoning Bank Building, where the downtown Youngstown Huntington Bank is now located. The bank then moved to 129 W. Federal in 1904 until 1919 and then moved to its current place at 275 W. Federal St.
Retail services and mortgages were the bank’s primary driver and continue to be, Small said. The remainder of the business deals with other traditional consumer transactions, such as lending for cars. In 1998, the bank switched to a publicly traded institution with the newly formed holding company, United Community Financial Corp.
“What we would like to see down the road is still more and more of the commercial and business lending,” Small said. “[Because] diversity of revenue is a smart play. We have very strong opportunities. We are finding them where we weren’t able to before.”
Though Home Savings remains strong — and Small predicts a robust future — there have been some difficult times for the banking operation in its first century-and-a-quarter.
The Great Depression and the most recent recession, provided challenges to the bank
Small, who took on his position in April, recalled his predecessor’s efforts and others in maintaining the bank through the recent tough times.
In the early 2000s, Home Savings was “over-committed in real-estate development,” Small said.
In 2008, the Federal Deposit Insurance Corp. issued a cease-and-desist order, which primarily was related to the certain loans the bank concentrated on such as construction loans, which were hit hard in the financial crisis, according to The Vindicator archives.
The bank’s progress eventually lifted the cease-and-desist order.
To reduce risk, in 2012, “Home Savings completed a transaction with an undisclosed party to sell off $115 million in assets, erasing nearly $93 million in troubled loans from the bank’s balance sheet and reducing impaired or under-performing loans to $85 million,” according to The Vindicator archives.
Shifting staff, making management changes, selling a number of retail branches, a trust company and a brokerage company, all helped the bank to return to profitability, according to the archives.
“Without the management team to get through those tough times, nothing was for certain,” Small said.
Even during those tough times, the bank remained committed to serving the Valley, he said.
The Home Savings Charitable Foundation “was still out there doing the good work for the community,” Small said.
Since 1998, the foundation has provided more than $11 million of support to non-profit organizations, with a focus on those who serve disadvantaged children and adults or who provide educational programs, according to the bank’s website.
For the last 18 months or so, bank officials have been focused on improving business at the bank.
With a little more than 30 branch locations in the Valley and reaching out to Cleveland and Pittsburgh, the footprint of the bank appears to be established. Home Savings plants its locations where its customers are and where they need their bank both physically and digitally, Small said.
“The challenge for us as an organization and as an industry is, we have to make sure all of these channels are robust,” Small said. “We see a 5 to 6 percent decline, every year, transaction wise in [customers] coming to the teller and going through the drive-thru” as more customers conduct business online.
Home Savings has about 50,000 core banking households, 4,000 business customers and 15,000 mortgage-only clients. It has the No. 2 share in the Valley.
“We are one of the larger community banks,” Small said. “We want to be a bank in the market, not a branch in the market.”
United Community Financial Corp., parent company of the Home Savings and Loan Co. of Youngstown, reported a net gain of $1.18 million in income for the third quarter of 2014.
Home Savings reported a profit of $2.9 million, or 6 cents per share, for the third quarter of 2014 compared with $1.72 million, or 3 cents per share, profit during the same period last year.
“We want to be the financial backbone of the community,” Small said. “As the community grows, we are there propelling that growth.”