An "Adventure" in Trust

By Calsin, John B., Jr. | Independent Banker, November 1994 | Go to article overview

An "Adventure" in Trust


Calsin, John B., Jr., Independent Banker


Looking back at what has made his bank's trust department so successful, Charles E. Swope can point to many things. There's the talented staff, the comprehensive strategizing and planning, and the aggressive marketing. But it's a commitment from the top that has propelled the profitability of First National Bank of West Chester's trust department.

"You've got to get the board of directors 100 percent behind you," says Charles E. Swope, chairman, president and senior trust officer of the southeastern Pennsylvania bank. "They've got to realize this is going to be a new adventure."

A new adventure that can pay big results.

First National's senior vice president and trust investment officer Kevin C. Quinn can testify to that: "The importance a trust department can play in a small, independent bank is very significant," he says.

Both of these men know what they are talking about. Their bank's trust department has grown to what Swope calls "the extraordinary position of $250 million" in relationship to the $350 million-asset bank.

A VISION FOR A NICHE

There were not many banks in West Chester back in 1960 when Swope joined First National. It was a quiet, rural, county-seat community. "I'd completed law school and had been with two firms. Trusts were becoming extremely popular," Swope says. People were becoming more cognizant about preserving their financial assets.

"I saw the opportunity here because of the courthouse and all the lawyers. So I said, 'This is where it all is, right here with the local bank.' And it just proved 100 percent right," Swope says.

With increasing regulations in the banking business and expanding competition, bank profit margins are being squeezed. Swope and Quinn believe that banks must give a closer look to non-interest income opportunities such as trust services.

As a CEO, Swope understands the possible reluctance to tinker with a good thing. "But, your objective is always more profitability. Here is a source of substantial profitability to any bank, regardless of size," he says.

Quinn adds that if a bank is not providing the trust service for its banking clients, someone else will. "The financial services industry is changing so rapidly. Everyone is probably going to be offering the same services."

Today, 50 percent of First National's trust department revenue is generated from non-trust accounts, such as the employee benefits and investment management.

In 1985, First National had net income of $104,000 from its trust department. By 1989, net income had grown to $258,000. Last year, the bank experienced more than $688,000 in net income from trust services, based on revenues of $1.6 million and expenses of $994,000.

Many trust departments rely upon estate revenue. In 1985, estate revenue for First National represented 33 percent of the overall trust revenue. In 1993, however, it represented just 11 1/2 percent.

Quinn says: "The year 1985 was a very good year, but we could have a down year if estates dried up. And, obviously, we have no control over when someone is going to die."

Over the years, the bank's management philosophy changed. "We didn't want to reduce our estate revenue," Quinn says. "We wanted to reduce the dependence upon estate revenue for our growth. So there was a concentrated effort to sell our trust and investment management services."

Quinn acknowledges that geographical competitiveness and local economic conditions may affect fees that the bank charges for trust services. But he says, "I think one mistake that trust departments make is they underprice their services. [In general], I think we give our services away."

Speaking specifically about First National's fees for trust services, Quinn says: "On the first $400 thousand of assets under management, we're charging 1 1/4 percent. And we're still bringing in new business."

STRATEGIZING FOR SUCCESS

Swope and Quinn both point to the importance of a comprehensive strategic plan for the bank's trust services.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

An "Adventure" in Trust
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.