Newsmaker Q&A with Scott Fainor, CEO of National Penn Bank

June 08--Allentown native Scott Fainor is CEO of National Penn Bancshares. The bank's decision to move its headquarters from Boyertown, Berks County, to Allentown was a milestone in the redevelopment of the city's downtown. It gave instant credibility to developer J.B. Reilly's ambitious plan -- financed in part by National Penn -- to erect a complex of office, hotel and apartment buildings around a new professional hockey arena. The company celebrated the opening of its new headquarters last month, and last week it announced the acquisition of another bank, giving National Penn a foothold in New Jersey.

Q: National Penn announced it is acquiring 3rd Fed last week. What is National Penn hoping to gain?

A: 3rd Fed Bank is a quality institution, and this acquisition allows us to leverage our excess capital and enhance value for our shareholders. It also allows us to grow. 3rd Fed Bank has 18 branches in attractive Pennsylvania and New Jersey markets. This transaction increases our market share in Bucks County from 13th to 7th and in Philadelphia County from 25th to 15th, and it establishes our physical presence in New Jersey. We'll also be able to offer 3rd Fed Bank's customers an expanded array of banking, insurance, investment and trust products and services.

Q: So far, how is the transition from Boyertown to Allentown going?

A: The transition went extremely well. In April, we held a grand opening for our new corporate headquarters at Two City Center and more than 750 people attended. Our employees are excited and energized to be in downtown Allentown, and the community has been very welcoming. Over the next few weeks, we'll be moving employees from other locations to our Boyertown campus. As we've said, our commitments to the Lehigh Valley and to Berks County are strong.

Q: Do you have a favorite place for lunch in Allentown?

A: My work schedule doesn't often allow me to get out for lunch, but as an Allentown native, I've always loved Yocco's. There are also great places to eat downtown, like Allentown BrewWorks, The Cosmopolitan and many others. I'm also looking forward to The Hamilton Kitchen & Bar opening on the first floor of our building this summer.

Q: You grew up in this area. How does it feel to be back in your hometown for work?

A: I love Allentown and I never really left. In 34 years in banking, I've had the good fortune and opportunity to work in Pennsylvania, New Jersey and New York, but I've always had professional ties to the Greater Lehigh Valley.

Q: Back to the consolidation of the banking industry... what's driving the consolidation?

A: A few factors are driving the consolidation. Our current slow-growth economic climate, where interest rates have remained low for an extended period of time, has placed revenue and earnings pressure on the banking industry. On top of that, banks' regulatory costs have increased, as have the costs of implementing new technology. Due to these factors and others, consolidation in the industry has and will continue to take place.

Q: Is the consolidation a good thing for consumers?

A: As a regional community bank, National Penn is a large enough to offer a broad range of financial products and services, but we're so heavily focused on customer relationships and local communities that we really offer the best of both worlds. Because National Penn delivers excellent customer service, we believe consolidation is a good thing for our current customers and our new customers, because our priorities, culture and values remain consistent as we grow.

Q: How does the rise of online banking factor into the industry's evolution?

A: It's a huge factor. The way people bank is changing and banks need to change with it. More and more customers across all generations are utilizing online and mobile banking services. It's all about convenience for our customers. If it's good for our customers, National Penn will invest in the technology to provide it.

-- Sam Kennedy

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