Stalwart for Mutuals to Press On After Her Bank's Sale

Familiarity can breed comfort while considering a merger.

That was the case for Susan Ralston, who guided Bank @lantec's conversion from a credit union to a depositor-owned federal savings bank in 2004. When the time arrived to consider a merger, Ralston, the Virginia Beach mutual's president and chief executive, quickly zeroed in on Dollar Bank in Pittsburgh.

The mutuals agreed in June to a combination that will give the $7.4 billion-asset Dollar its first operations in Virginia.

Ralston grew up in Washington, Pa., just outside Pittsburgh, and has longstanding ties to Dollar. In fact, she frequently sought out the mutual's executives at banking conferences.

"I couldn't be happier" with the merger, which will likely close later this year, Ralston said in a recent interview.

Ralston has been an active and vocal advocate for mutual banks, serving on the Office of the Comptroller of the Currency's Mutual Savings Association Advisory Committee and the executive committee of the American Bankers Association's Mutual Institutions Council.

These days, though, her top priority is smoothing the path for her $112 million-asset institution's merger and figuring out the best way to putting the larger mutual's superior technology and deeper product set to work in her local market.

For Ralston, who plans to stay with Dollar, the best part of the agreement is the fact it didn't require compromising her steadfast allegiance to the mutual structure.

"We knew Dollar Bank is 100% committed to mutuality," she said.

Here is an edited transcript of American Banker's conversation with Ralston.

You grew up near Pittsburgh. Can you talk about your links to Dollar?

SUSAN RALSTON: Dollar Bank was in my hometown, and still is. Growing up, my family banked there. I have the deepest respect for them as a bank. It felt like home. They have a very down-to-earth culture.

How tough has it been operating as a small mutual today?

It's a very challenging environment. Right now, 20% to 30% of our resources are directed toward compliance and regulatory issues. Ten years ago, it was closer to 5% to 10%. It seems like we're in a defensive mode all the time instead of thinking about how we're going to add new products and grow.

You'll lead Dollar's Virginia operations. What will your priorities be?

Getting their technology and product line down here as soon as possible. From their products to human relations, they're so deep. We've been successful on our own, but I can only imagine the success we'll have as part of Dollar Bank.

You have been a very active lobbyist for the mutual industry. What is the motivation for your advocacy and what are some of the issues you've been working on?

I've been very vocal in Washington and meeting with [local legislators]. We want to keep the industry alive and competitive. There hasn't been a de novo mutual chartered since 1965.

We're very pleased with the support we've received from the Office of the Comptroller of the Currency and with the House's action on HR 1660 [which would give national bank powers to federal savings associations and was recently referred to the House floor by the Financial Services Committee]. Those aspects are very positive.

At the same time, we're trying to push the Mutual Capital Certificate concept. [Under a proposed statute, mutual banks could sell certificate's to investors with the proceeds counted as Tier 1 capital.] Having a capital instrument makes sense. Options are great, and this creates one more for mutuals.

Pittsburgh and Virginia Beach are miles apart. How will you manage the distance?

We'll do a lot of videoconferencing. But I've been driving back and forth between Virginia and Pennsylvania for 30 years. It is 434 miles from my house to my mother's front door.