Small town bank puts people before profits

(CBS News) CATTARAUGUS, N.Y. - We've been telling you a lot this week about trouble at the biggest bank in America. Now we thought we'd tell you about one of the smallest. It has just one office and no drive-up window. Its assets are about $14 million and its profits are barely enough to mention. But as CBS News correspondent Dean Reynolds reports, it's never been about making money -- it's about lending it.

In the rolling hills of western New York sits the former manufacturing hub of Cattaraugus. It is a place of 19th-century memories, but also 21st-century dreams, thanks in large part to the hometown bank and the man who runs it: Patrick J. Cullen.

"You gotta keep hope," said Cullen. "Hope is what's lacking in the world today."

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It's no exaggeration to say that Cullen and his seven employees at the Bank of Cattaraugus have held this community together.

Walking with Cullen on a street, Reynolds said, "Up and down the street, do you see stuff you had a hand in?"

"Every door front," said Cullen.

"Pritchard's Hardware?"

"Oh, absolutely."

His methods might make some on Wall Street shudder.

Beth McIntyre recently moved here from North Carolina where she and her husband lost their jobs, and then their house to foreclosure. Cullen approved a home loan anyway.

Reynolds asked Beth: "No closing costs?"

"None," she said.

"Down payment?"

"No."

"Were you surprised?"

"I was really shocked. No other bank would give us a second chance."

Paul Macakanja was unemployed when he asked for a loan to open a diner, which the town badly needed.

"They allowed me to just make interest-only payments until the cash register started to ring, which I thought was awesome," he said.

In return for all of this, the bank gets a thriving village and the prospect of more customers. But big profits? Well -- after paying the bills and salaries -- not so much.

"You don't make a lot of money," Reynolds asked Cullen.

"Since I'm here at the bank, our average net income has been around $23,000," he said.

"$23,000 annually?"

"Yeah," he said.

Cullen's wife Joan and daughter Colleen work at the bank, too.

"You're not going to get big with only $23,000 a year as profit," Reynolds pointed out to Colleen.

"Well, our goal is not to make a ton of money. It's to help the local people," she said.

Her dad has run the bank for 30 years and remains unimpressed with the exotic financial engineering of bigger institutions.

"Do you do a lot of credit default swaps here?" Reynolds asked Cullen.

"I don't even know what that is," he answered.

He doesn't use credit scores either. He's more 'a look'em in the eye and shake their hands' kind of banker. And so far, so good. His bank hasn't lost money on a loan in the last 11 years.