Amidst the Banking “Maelstrom” Irvington’s Sunnyside Stands Firm

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March 14, 2023

By Barrett Seaman–

The sudden implosion last week of California’s Silicon Valley Bank (SVB) sent shudders through the national and international banking systems. A rapid response by the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department dampened fears that a global collapse of the banking system was imminent, but it remained unclear through the weekend how far the ripple effect would spread. The general consensus was that the big international banks, J.P. Morgan, Citibank, Bank of America, etc., were adequately capitalized, but what about the small, midsized and regional banks not necessarily “too big to fail?”

The question of how “local” the SVB collapse would spread gained more urgency quickly in Westchester, when the feds swooped down on Signature Bank, a New York-based lender with a robust growth record in the metropolitan area since its founding in 2001. Signature had solid financials but was also known as a bank that held crypto-assets. In the aftermath of the failure of Silvergate Capital, a California bank that taken a deep dive into the crypto world, Signature looked shaky to enough customers to trigger a run—hence the federal intervention.

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If Signature, a demonstrably successful regional bank, could fail, what about the smaller community banks that have long serviced local businesses?

As it turns out, they’re okay—at least in the rivertowns. Case in point is Sunnyside Federal Savings and Loan, about as local a bank as you can get, based in Irvington, with core clients in the rivertowns from Hastings-on-Hudson to Sleepy Hollow.

“We have plenty of capital,” says Sunnyside’s CEO, Fred Schulman, who has been in the job since last June when private equity firm Vecta Partners LLC took control of a local bank that has been in business since the stock market crash of 1929. “We are stable in the middle of a maelstrom.”

The secret to Sunnyside’s stability is maintaining a higher level of liquidity than is required, says Schulman. “We’re well above all those minimums.”

If anything, Sunnyside may benefit from the woes of other banks—Signature in particular. The two banks do a fair amount of business together, and Schulman believes that some of Signature’s local clients may move their accounts his way in search of stability. In an open letter issued in the wake of the government takeover of Signature, Sunnyside wrote, “if you are a current Signature bank customer, we hope that you reach out to us to learn more about our bank directly.”

Sunnyside was already in good shape when Schulman became CEO, and the initial plan was to “keep doing what it is doing,” he says. With current assets of around $100 million, Sunnyside intends to grow its commercial department to serve more small businesses in the rivertowns market but also to expand modestly down towards New York City and across to Rockland County. The bank also aims to “jumpstart” its home mortgage lending business. Since taking charge, Schulman has grown the bank’s staff from 12 to 18.

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