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You definitely need a scorecard to keep track of all the changes to the Long Island commercial banking landscape since the turn of the century. Just to highlight a few of the more notable acquisitions, Bank of America acquired Fleet, Capital One acquired North Fork, Citibank acquired EAB, and JP Morgan Chase acquired Bank of New York (branches) and U.S. Trust.  Just to highlight some new players in the Long Island commercial banking business in the past seven years – American Community, Commerce, Empire, Gold Coast, Madison, Signature, Sovereign and Wachovia. How does a Long Island business owner sort through all of these changes and figure out which bank would be the best choice to handle their banking needs?  I suggest that your CPA is a good place to start to help you to answer this question.

Our firm has had the luxury of being around for almost sixty years and our founder, Seb Albrecht, always knew the value of having close relationships with banks, and even more important, bankers.  The firm has hosted semiannual breakfasts with the Long Island banking community for over thirty years.  We educate the banking community at these breakfasts on topics such as the Long Island Economic Survey and Opinion Poll (fourteen years running), new accounting and auditing issues, and major tax law revisions.  The bankers often change banks over the years and we work hard to keep our database accurate and current.

Are clients loyal to banks or bankers?  In my experience, it’s usually the latter.  It’s all about relationships and comfort zones.  Just like choosing an accountant or an attorney, the personal relationship is often paramount.  Economies and businesses go through cycles and experienced business owners know that there will be some times when the business will need their bank to be there not only when times are good but also when times are not so good.  When the business owner has confidence that both the banker and the bank will be there for them, a bond is created that will be very difficult to break.

Do business owners get nervous when the bank that they have been doing business with for 10, 20 or 30 years gets acquired?  You bet they do!  Will their banker stay at the new institution?  Will the new bank have policies and decision makers that will change the way that business gets done?  Will the new bank meet their needs as well as the old bank?  These are some of the questions that business owners ask themselves.  A CPA can help the business owner alleviate their concerns, especially if they have had past experiences with the new financial institution.

If the business owner decides it is time for a change, how can a CPA help them?  There is the traditional list of three individuals at three different banks that can be interviewed to determine a comfort level and the CPA can be instrumental in compiling that list.  Most banks profile their typical customers based upon their sales volume or amount of their credit needs. A good CPA makes it their business to know the sweet spots of different lending institutions. If your Company does business around the world, your CPA can help identify a bank that is familiar with letters of credit, foreign exchange and other aspects of international trade.  If your CPA services other clients in your industry, they’ll know which banks are eager to do business with your Company.

In this technological world that is rapidly evolving, how important is convenience to a banking relationship?  The traditional business owner would say that convenience is extremely important to their Company and their employees.  A more tech savvy business owner would probably disagree and say that you don’t even need the bricks and mortar of a traditional financial institution.  Today, you don’t even have to deliver your deposit to the bank.  You can scan in the checks received from your customers daily and transmit them to your bank electronically.  Most employees love direct deposit of their payroll checks and more and more Companies and individuals now pay their bills online.  Although convenience is still important for many business owners today, it will become less important in the future.  A knowledgeable CPA can help advise you whether the technology that you need is available at different banking institutions.

The last item I want to touch on comes under the heading of philanthropy.  Whether your bank is a mega bank or a startup, different banks have different levels of commitment to the community.  If this is something that is important to you and your business, then do some homework and look at the banks that support some of your favorite charitable organizations.  Being connected to your bank and your banker in a number of ways will help strengthen your relationship over time and help to provide the comfort level that you desire. 

Choosing the right bank to handle your business is a tough decision.  Having the right CPA involved in the selection process is priceless.