Fall
2016
POINT
to the
Message from the President:
Merger of Equals
with Standard Bank
Andrew W. Hasley
President & CEO,
Allegheny Valley Bank
In this issue:
1
President’s Message
2
To All Friends of Allegheny Valley Bank:
As the years go by, things may change, people look different as they age, your surroundings may be
altered and updated, but one thing remains the same – you always know who your true friends are,
you always know who you can count on, and you always keep that special trust with special people.
As you probably have heard, Allegheny Valley Bank has agreed to enter into a “merger of equals”
with Standard Bank, based in Monroeville. This is an exciting time to for AVB and just as with those
old friends whose appearance may have changed a bit over the years, we anticipate positive changes
in the coming years while always remaining that community bank you’ve trusted all along.
This is a very good opportunity for our bank, our customers, our shareholders, and our employees.
Think of it for a moment…
•A community bank with roughly double the size and scope of AVB, bringing a greater presence
over an expanded geographic area.
•An opportunity to use this stronger presence to expand our products and services to our customers, provide significant capital to take care of the lending needs of our growing commercial
customer base, and provide the resources to help meet our ever increasing regulatory burden.
•And a fresh opening to grow and thrive as a true community bank, even in this era of very
tough mega bank competition.
A merger of equals involves the mutual decision of two companies to combine and become one entity.
In our case, it can be seen as a decision made by two “equals” that are similarly situated. Both Standard Bank and AVB have nine branches, good earnings, strong asset quality and very strong capital.
Here are some other financial measures to consider:
• Assets – Standard Bank = $485 million vs. AVB = $435 million
• Deposits – Standard Bank = $352 million vs. AVB = $322 million
• Loans - Standard Bank = $367 million vs. AVB = $291 million
• Equity - Standard Bank = $73 million vs. AVB = $51 million
A rash of bank mergers and acquisitions over the years has resulted in AVB remaining as one of the
smallest independent stock owned banks in the greater Pittsburgh metropolitan market. As the comPresident’s Message - continued on next page
President’s Message
continued
Buying a Home or
Thinking About
Refinancing?
3
InvestPoint:
Can You Afford Early
Retirement?
4
Community Corner
AVB New Hires &
Awards
Blawnox 412.828.6030
Corporate Office 412.781.0318
Downtown Pittsburgh 412.338.9036
Green Tree 412.928.8530
Lawrenceville 412.781.1464
McKnight Road
412.847.7640
Mt. Troy 412.322.6107
Penn Center East 412.856.4022
Shaler 412.486.4245
Shaler Drive-Thru 412.487.9348
Allegheny Valley Bank
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TO THE POINT
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Fall 2016
President’s Message - continued from page 1
petitive, economic, and regulatory pressures facing banks and, in
particular, community banks continue to rise, achieving size and
scale have become increasingly important. In order to more effectively compete and absorb the higher costs associated with delivering our products and services, we believed that merging with a
company that shares our operating philosophy would enhance our
ability to better serve our customers and communities while satisfying our shareholders without significant employee reductions
and other cost cuts associated with a traditional sale.
Standard Bank’s CEO Tim Zimmerman and I have been talking
about this opportunity to bring our two organizations together for
many months. The discussions have been very positive, occasionally challenging, and thoroughly frank. Over the course of these
negotiations, I have gotten to know Tim very well, and can tell you
that his approach to employee advocacy, customer service, dedication to community, and banking overall mirrors mine.
That’s why I can say with absolute confidence and pride, that
when this deal gets characterized as a “merger of equals,” it applies to more than just the financial statements of AVB and Standard. It also applies to the way we see our roles as the providers
of needed banking services to neighbors, of capital to commercial
Jason Ross
Executive Vice President,
CFO, COO and Treasurer
Allegheny Valley Bank
and industrial enterprises, and of investment services to help provide our customers’ the expertise they need to manage their hard
earned savings.
To Our Valued Customers: you can count on every AVB team
member to bring our trademark spirit, that energy and enthusiasm that you have come to expect, to the job every day. We expect
minimal customer impact.
We feel good about the future of our new enterprise, as we complete this merger of equals with Standard Bank, and know that
the benefits to you will be rewarding. Some things may be changing, but the important things – like how we serve our communitybased customers – will be just as strong as ever. Maybe even more
so. Thanks for your business, and look for more information over
the next six months, as this process moves along.
Sincerely,
Andy Hasley
President & CEO
Buying a Home or Thinking
about Refinancing?
We are asked every day by customers, “what’s your mortgage rate?”
When we give our answer, we typically then are asked, “why are the
rates advertised on the TV or radio so much lower?” Whether you
or someone you know is looking to purchase a home or refinance
a mortgage, here are several things to keep in mind.
1. Mortgage brokers may advertise a lower rate, but read the fine
print. When you see a rate of 3.5% and then an annual percentage rate (APR) of something significantly higher…run! The
difference between the stated rate and the APR is caused by all
the fees. When there is a significant difference between those
two numbers, there are usually a substantial amount of fees involved. At AVB, we keep our fees low. In fact, most of our fees
are passed-thru to you by third parties such as appraisers, government agencies, and title companies. These fees are mostly
the same for all lenders. However, the fee that the broker or
bank keeps, is what can really increase your costs. Make sure
you understand the difference between rate and APR by asking
for a detail of fees and analyzing what that difference means to
your monthly payment.
2. Beware that mortgage brokers have tight credit parameters.
Because brokers sell their mortgages into the market, they have
to adhere to very tight standards or they can’t do the loan.
These standards include metrics like credit score minimums,
loan-to-value maximums, and debt-to-income maximums. Also,
if a borrower’s credit parameters are not within their standards,
they can significantly increase the rate as compared to what
they originally quoted. We talk to customers all the time who
are weeks into the process with a broker and because some
parameter is slightly off, the broker can’t do the loan, or their
rate has been increased significantly, leaving the customer back
at “square one”. At AVB, we have flexible parameters because
we are able to keep our mortgages and, more importantly, we
Continued on next page
Fall 2016
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TO THE POINT
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Continued from previous page
are here to serve our communities. We also do not charge
higher rates or fees because a credit parameter is slightly different than standard. That means we do everything possible to
help our customers get the best loan to suit their needs.
3. Make sure you allow enough time to process a mortgage. As
a result of the Dodd-Frank legislation passed after the 2008
recession, the mortgage underwriting process is more extensive than just a few years ago. All mortgage lenders are now
required to ask for additional information that was not previously required. The result is a more time consuming mortgage underwriting process than before. To ensure a smooth
process, we recommend you contact a mortgage officer well
in advance of making an offer on a new home. Once you understand the information requirements and supply that infor-
Allegheny Valley Bank
mation to us, the process will go very smoothly. Be aware that
there will still be underwriting questions and possibly further
documentation requests. Again, all this extra work is due to
government regulations.
In summary, at AVB we do everything possible to make the mortgage experience as painless as possible. We work with customers
to make sure the best product, rate, and overall experience is being
delivered. Rates are still very low, so if you or someone you know
wants to explore refinancing or purchasing a home, we are happy
to discuss options. Please feel free to contact one of our mortgage
officers listed below:
l
Krista
lMisty
Cochran, Sr. Mortgage Lender - 412.720.3379
Harrah, Sr. Mortgage Lender – 412.512.9011
INVEST POINT
Daniel Koller
[email protected]
Can You Afford Early Retirement?
Early retirement is a phrase many Americans wish they could turn into
a reality. While retiring in your 50s or early 60s sounds enticing, it typically requires years of planning to make sure you’ve accumulated enough
retirement assets to last for 20 or 30 years or more. It’s important to
factor in how an early retirement could affect your Social Security benefits, options for health insurance, and the nest egg you plan to rely on
for ongoing living expenses.
Social Security and Medicare
Those who collect Social Security at age 62, the earliest age when most
retirees are eligible, face a permanent reduction in benefits. For example,
if your full retirement age is 66, collecting benefits at age 62 will result
in a 25% reduction in the monthly benefit you would have received by
retiring at 66.1
3
$
of the aggregate income of Americans aged 65 and older, with remaining
income coming from employer-sponsored retirement plans, wages, and
other sources.2
Finding health insurance is equally important if you plan to retire early.
Eligibility for Medicare begins at age 65, and those who retire earlier
typically must obtain health insurance on their own or through a former
employer, which can cost thousands of dollars annually in premiums.
Saving and Budgeting
Early retirement typically requires a larger nest egg to finance living expenses over a longer period of time. Contributing as much as you can
afford to qualified retirement accounts, such as an IRA or an employersponsored retirement plan, can help you build this nest egg.
Those born in 1960 or later will experience a permanent 30% benefit
cut if they choose to begin collecting benefits at age 62 instead of their
full retirement age of 67. In contrast, delaying benefits past full retirement age results in a higher benefit, with a maximum delayed retirement
credit of 8% annually for those who were born in 1943 or later and wait
until age 70 to retire.
Retiring early requires advance planning to make the situation work to
your advantage. If you have the financial resources to do it, you may want
to start the process at your earliest opportunity.
Regardless of your age when you retire, Social Security is not likely to
pay all of your living expenses. Social Security currently comprises 35%
1
To begin the process, contact Daniel Koller, Senior Investment Officer
at Allegheny Valley Bank: 412-773-7285 or email [email protected].
Source: Social Security Administration.
Source: Social Security Administration, Fast Facts & Figures About Social Security, September 2014.
2
Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event
shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.
© 2015 Wealth Management Systems Inc. All rights reserved.
Securities offered through LPL Financial, member FINRA/SIPC. Insurance products
offered through LPL Financial or its licensed affiliates. Allegheny Valley Bank and
AVB Advisors are not registered broker/dealers and are not affiliated with LPL Financial.
4
Allegheny Valley Bank
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Fall 2016
Community Corner: AVB’s Jason Ross participates
in “Real Men Wear Pink” fundraiser to benefit
the American Cancer Society
Real Men Wear Pink is a distinguished group of community leaders raising awareness and funds for the
annual Making Strides Against Breast Cancer event. Twelve men in Pittsburgh committed to wearing pink
throughout the month of October to raise money and actively create awareness about breast cancer.
Jason’s mother passed away at age 49 after a 10-year battle with breast cancer. His mother always spoke
highly of the American Cancer Society and the support they gave her. As a tribute to his mother and to
others who fight this disease, Jason became very involved in the American Cancer Society. His fundraising
efforts in Pittsburgh’s Real Men Wear Pink campaign resulted in over $5,600 in donations.
Photo credit:
Photographs by Danelle
To donate, visit www.makingstrideswalk.org/realmenpittsburghpa and click on the profile photo
of Jason Ross.
5137 Butler Street, Pittsburgh, PA 15201
AVB New Hires and Awards
Allegheny Valley Bank is proud to announce the
appointment of Patrick Bungo as Wealth Advisor for AVB Advisors, Inc. Patrick has fourteen years of experience in the financial services
industry. In his new role, Patrick helps his clients in
a variety of areas including: retirement planning, estate preservation planning, life insurance planning,
college education planning, mutual funds, stocks and bonds.
Allegheny Valley Bank is proud to congratulate our own
Sylvia Saunders, Assistant Vice President - Regional Manager for being presented with a Minority
Achiever Award from Talk Magazine. Sylvia began her career in banking over twenty years ago. In 2006, she joined
Allegheny Valley Bank as a branch manager and in 2014
she was promoted to her current role as Assistant Vice
President, Regional Manager.
He is a registered representative with LPL who has obtained FINRA
Series 7 and 63 securities registrations and is licensed to sell Life
and Health Insurance in the states of Pennsylvania, West Virginia and
Ohio. Patrick also holds a Property and Casualty Insurance license in
the state of Pennsylvania.
Talk Magazine is Pennsylvania’s only statewide fifty-four year old African-American owned and operated magazine.The LJS Group, the publishing company of Talk
Magazine, is committed to educating and empowering underserved communities
throughout Pennsylvania. Talk Magazine content covers the life and issues important to the people of African-American communities. In addition, they continue
to cultivate statewide relationships through their network across Pennsylvania.