A growing bank investing heavily in low- and moderate-income housing in neighborhoods across NYC
While looking at banking institutions in NYC, we’ve noticed an abundance of banks that call themselves commercial banks, though that term is used in more than one way—for-profit banks and/or banks that do commercial, i.e., corporate-focused, banking. While their ultimate goal is to increase profits for their shareholders, commercial banks also have the opportunity to provide unique loan and banking products to their customers that traditional banks couldn’t. This is particularly important in a city like New York, where innovation and difference are celebrated, and consumers aren’t necessarily looking for “traditional” products and services.
Many commercial banks focus more on the needs of businesses and companies in their community rather than residential mortgages, but the Better Banking Option we’re talking about today is a commercial bank that invests heavily in low-income housing, even though they are not located in low-income neighborhoods. Hanover Bank calls themselves “a community commercial bank focusing on highly personalized and efficient services and products responsive to local needs.”
Hanover Bank is still a fairly new institution, having been established in Garden City Park, NY, only 10 years ago, but they’ve grown substantially in that time, opening three more branches in Mineola and Queens. They recently acquired another fantastic bank, Chinatown Federal Savings Bank, expanding their reach into Brooklyn and Lower Manhattan. Although it will be interesting to see how they are able to serve their new, non-English speaking customers coming from this acquisition, they have said they want to continue serving this market but provide technologies to make banking and loan products as accessible as possible.
The data we’re currently able to obtain on this bank’s lending portfolio is not updated to include assets and loans made by the three recently acquired branches. While Hanover Bank had a DDI of 0% before acquiring Chinatown FSB, now three of their seven locations are in low-income census tracts, hopefully showing this bank’s commitment to serving low- and moderate-income populations in NYC. Even without this acquisition, however, their commitment to community development housing loans is evident; 68% of their lending is devoted to housing, and 58% of that specifically goes to low- and moderate-income households.
While they don’t do a ton of small business lending, with it making up only 7.5% of their total assets, this is probably because of the enormous amount of housing lending. Additionally, they have a net-loans-to-deposits ratio of 120.88%, meaning ALL of the money you deposit in this Better Banking Option is used for lending. While we may have to wait and see how they handle the transition to working in NYC’s Chinatown rather than the more affluent neighborhoods they’ve located in thus far, their lending portfolio shows a commitment to community development lending that makes us hopeful they’ll help immigrants in Chinatown gain access to more capital.
Hanover Bank is a great option for anyone looking to invest in low- and moderate-income housing in NYC, and they have open eligibility so anyone can invest in this Better Banking Option. (Also, we’ve read that they offer money market accounts with 4X the national average return rate!) Additionally, they serve both individuals and businesses, so if you’re thinking about opening a small business in the Big Apple anytime soon, they’d be a great option to look into. Check out their website to get started today!