Name: Frederic D. McDuff
Position: President, Freedom National Bank in Greenville
Background: McDuff has been involved in banking for 31 years, primarily
in commercial lending. In 1984, McDuff started working for Hospital Trust, and
stayed on board when that bank was acquired by BankBoston and, eventually, Fleet.
He decided to start Freedom after his unit at Fleet was divested to Sovereign
Bank.
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Education: Bachelor’s degree in economics from the University of Rhode
Island. He is a graduate of the Stonier Graduate School of Commercial Banking
at Rutgers University.
Age: 54
Residence: Cumberland
Frederic D. McDuff started Freedom National Bank in Greenville in the winter of 2001. The bank received $8 million in start-up capital from Berkshire Financial Services Inc., in Less, Mass. A year later after starting the small bank, Providence Business News sat down with McDuff recently to learn what it was like to start a bank in an unstable economy.
PBN: Your bank is geared toward commercial lending to small businesses,
particularly businesses located in northern Rhode Island. How did the bank fare
in such a uncertain economy, when many companies are delaying capital expenditures
and various expansion?
MCDUFF: We are doing fine. We should hit both our loan and deposit
goals. My guess is we will finish up the year between $9 million to $10 million
of small business loans, and $15 million to $16 million in deposits, which is
pretty much what our target has been. We wanted to create for northern Rhode
Island a community bank with a special interest in small business, because we
don’t feel that particular niche area has been served. What we are all about
is a choice to go back more to the old style of banking. On the commercial side,
people tend to do business locally, with convenience being a major factor. We
want to get to know people’s names, be part of the community and give back to
the community. Our plan is not to go statewide, but to be focused on this particular
area. From the same perspective, small business lenders also want to know who
they are doing business with. The small business person chooses a bank based
on their needs for credit, and we want to offer them an opportunity to work
with a bank and work the decision-makers at the bank. Small business people
like to know they can go into the bank and talk to the people who will make
the decision on a loan.
You said the bank is meeting its goals. What does that tell you about northern
Rhode Island that despite the economy Freedom is finding the businesses looking
to grow and flourish in this area?
I don’t think our success or failure will be largely predicated on the economy. I started with a zero customer base, so I’m not depending upon a certain amount of growth from those customers. We are looking for people looking for an alternative to the other banking opportunities out there. I feel there is a huge base of small business customers in northern Rhode Island who could serve as potential customers for me. It might be they are looking to get away from doing business with the large banks.
How do you reach those customers?
Largely, it’s about networking, knocking on doors. Also, I have 30 years of experience, I’ve been living in northern Rhode Island all my life, I’m on the board of the Northern Rhode Island Chamber of Commerce and I’m active in other civic activities here. Also, because Rhode Island is such a small state it is easier to target the various accountants and attorneys who provide professional guidance to the various customers out there. We learned very early on that almost every time we gave a loan we got a referral from the business owner, the accountant, attorney – someone who saw what we did and how we interacted with the small business owner.
What are your financial goals three years down the line?
We would like to be a $40 million to $50 million bank. I would also like to have four to six locations in the northern part of the state, where they will be I don’t know.
