Union Savings Bank to Enter Cleveland Market with Independence Branch

Louis Beck, president of Union Savings Bank of Cincinnati, plans to open an office for mortgage loan officers and associated staff while seeking regulatory approval for a branch and city approval for service at flying into the building the bank just bought from Independence.

“This will be our home office there,” Beck said in a telephone interview. “We’ve made loans there but we’ve never had a presence (in Cleveland). We’re going to set up and grow from there. It’s a giant leap for us, and some of our members. will move in soon. go to Cleveland. “

It simply sets the appeal of the market.

“It’s such a huge geographic area,” Beck said. “You really see it when you hover over it. It’s a big market nearby for us not to be there.”

After obtaining regulatory approval, USB, as Union Savings generally refers to itself, will establish a branch in the three-story building at 6400 Rockside Road, which it purchased on September 29 for $ 3.99 million. of dollars. But its objective is not so much the deposit as the presence. The building has significant office space that the previous owner, a group of Columbus investors, had emptied to attract a new tenant that USB can quickly outfit for mortgage operations.

It will house loan officers, loan processors, underwriters and appraisers, as well as approximately five people in the branch. It will manage other aspects of the business from its central operation. USB doesn’t sell its loans but keeps them for service, which Beck said it does to provide better customer service.

“I’m going to make a prediction,” Beck said. “We will be disappointed if we don’t have more than 40 people in this branch and don’t make 3,000 loans a year.”

One surprise is that USB will focus on the Cleveland market first and does not have any offices in the Akron area at this time.

By loans, he means home purchase loans, refinances, and equity loans.

“We only do one thing, residential mortgages and some business on a relationship basis,” Beck said. “We work directly with consumers, all online like (Rocket Mortgage) and traditional loan officers who meet people. We have found people who like to deal with people and pay $ 250 or $ 500 to take out a loan. The theme is low closing costs. With low interest rates, some people feel overwhelmed by the fees. “

USB had $ 1.98 billion in secured residential loans for one to four families, according to data from Federal Deposit Insurance Corp. to June 30. In terms of size among Ohio lenders, this is clearly a David among the Goliaths.

Despite this, USB has 35 full-service branch and loan offices in Ohio, Indiana, Kentucky, and Pennsylvania, and more than 500 employees.

USB dates from 1895 and is owned by Beck and his business partner Harry Yeaggy. The two also own the smaller Guardian Savings Bank, based in Cincinnati.

USB and Guardian were spanked by the US Department of Justice in 2016, when they agreed to spend $ 9 million on loans in certain markets to increase investment in minority areas of Indiana and the United States. ‘Ohio. The DOJ accused companies of providing mortgages in areas predominantly with white borrowers to a greater extent than in minority areas. The banks’ CRA rating was satisfactory, according to a performance review of the Community Reinvestment Act of February 2020.

For his part, Beck said that USB provides loans in under-represented areas. Over time, he said, the company found it might be surprised at the niches that enterprising loan officers were developing; he used to worry about saturating a market with loan officers, but not anymore.

Beck said they’ve decided Cleveland’s footprint is a better match for USB. The two are also partners in real estate businesses, including Janus Hotels and Resorts of Cincinnati.

Among Janus’ properties are the Holiday Inn and Springhill Suites in Independence at the northeast corner of the I-77 and Rockside Road interchange.

It also gives this real estate developer turned banker a different perspective on the Cleveland area and its slow growth patterns compared to Columbus, Cincinnati and Indianapolis.

“This exchange only gets better over time,” Beck said. “You don’t usually see that with freeway interchanges.”

Jessica Hyser, Director of Economic Development for the City of Independence, said in a telephone interview that the city was delighted to see Union Savings purchase and occupy the building, given the challenges of the office market in the era of the work-from-home pandemic. .

Beck’s is buying more properties for a related company where it already has hotel business, she said, validating the suburb’s value in terms of its central location and business-friendly position.

The seller of the 34,000 square foot building had initially sought to lease USB space. However, Jake Crocker, a managing member of the Columbus-based 6400 Rockside LLC investor group, said in a telephone interview that he found out that USB preferred to own the building rather than lease space.

“So like all good deals, we found a win-win solution for them and for us,” Crocker said. “We did a bit and they were happy with the price.”

When asked how USB expects to cope with the competitive residential mortgage market in Northeast Ohio, Beck downplays the question. He saw more competition.

“When we got involved, there were 264 savings and loans in Cincinnati,” Beck said, and only a handful remain in business.