Mount Dora, Fla. — “Sustainable” is the standard for a new generation of bankers who aim to make a difference along with a profit in the market that’s emerged since the collapse of too-big-to-fail Lehman Brothers four years ago.
Kenneth M. LaRoe, chairman of First Green Bank in Mount Dora, said sustainable banking practices will steer the industry back to its original course—stable and solid financial returns and resiliency through strong capital positions—and restore the world economy.
A critical industry analysis issued last month by the Global Alliance for Banking on Values—a worldwide network of proponents of sustainable banking practices—proves LaRoe’s point.
“Sustainable banks allocate almost twice as much of their balance sheet to lending to the real economy than the too-big to-fail banks,” LaRoe said. “Dominant big banks lend less, attract fewer deposits and have a weaker capital base than sustainable banks, and financial results over the last ten years show sustainable banks are resilient, support the real economy, and provide stable returns,” he said.
“Those are fundamentals of sustainable banking,” LaRoe said recently. “It’s who we are, it’s why we do business.”
Banks have a huge role to play in their communities, with a vested interest in real economic growth, LaRoe said.
Earlier this year First Green Bank became the first Florida bank admitted to The Global Alliance for Banking on Values.
The group’s study, “Strong and Straightforward: The Business Case for Sustainable Banking,” has LaRoe and his colleagues excited.
“’Strong and Straightforward’ lays out the philosophy mainstream banking will eventually embrace, but it will take time,” LaRoe predicts. “I’m delighted the evolution is under way,” he said.
LaRoe, whose First Green Bank opened its award-winning headquarters facility in Mount Dora last year and a branch facility in bustling downtown Orlando recently, said sustainable banking practices form the core of First Green’s expanding business model. First Green Bank also has locations in Ormond Beach, Clermont and a planned branch in Winter Park sometime next year.
It’s a highly successful model: First Green reports its assets grew by more than 20 percent in 2012 and its loan volume by more than 25 percent. First Green Bank scored the highest among Central Florida banks in a recent Asset Quality Review by the Carson Medlin Company.
LaRoe said the benefits of sustainable banking extend well past the bank’s bottom line.
“Sustainable banks increased their activity during the financial crisis, expanding their lending to small and growing businesses in particular,” LaRoe said.
“Sustainable banks provide demand-driven banking services to the real economy with a long-term view toward developmental and environmental needs. We are stewards of equitable and environmentally sound capitalism,” he said.