Building a bank: Retiring York Traditions CEO reflects on journey

After decades working at institutions that got gobbled up by larger brands, he and the other founders of York Traditions Bank decided to start something from scratch – something built on the pillars of local choice, a quality customer experience and giving back to the community.

The planning started in July 2001 – before 9/11, before the 2008 crash and before the recent market disruptions.

But the bank survived. In fact, Kochenour believes, it thrived. Looking back at his career as he nears retirement, he exudes pride as he recalls where his little community bank started.

“I stuck a stake in the ground and said, ‘If we’re going to do this in our hometown, we’re going to do it right,'” he said.

Building traditions

Kochenour, the son of a West Manchester Township police chief, grew up a West York Bulldog.

That community is where he decided to return when he realized his career needed a new direction.

His years in the banking industry took him through a myriad of roles in institutions like Drovers Bank (now Fulton) and National Central Bank (now Wells Fargo). He worked in retail, corporate and small-business banking, as well as merger integration and human resources, among other positions.

His goal was ultimately to run a bank – he hadn’t planned on founding one. But when he realized his values no longer matched those of his employers, he took the jump to build something from the ground up.

Looking back, he feels he had been on that path his whole life. He just didn’t know it.

Building a community bank, however, is a daunting task. Many have been around for at least 100 years, having planted themselves in communities long before modern regulations stifled their growth, said Chris Lorence, executive vice president and chief marketing officer for the Independent Community Bankers of America.

Kochenour and the other founders traveled to community banks in other states, seeking guidance from CEOs. They ultimately raised $9.7 million to capitalize their venture.

They also attracted six board members, including Paul Kilker, who still serves as a director.

A small business owner who struggled to find startup funds in the late ’80s, Kilker, like Kochenour, felt York needed a solid community bank that could provide better service than the big chains.

Kilker never doubted they would succeed.

“I was quite excited about it,” he said.

The fledgling bank even had a name lined up: York Founders. It seemed perfect – until the company received a cease-and-desist letter, forcing them to revert to their backup name, York Traditions.

In hindsight, Kochenour is glad they had to change it. The name, he said, encapsulates not only the heritage of his hometown, but also the idea of creating new traditions there.

York Traditions opened Oct. 28, 2002 with 13 employees. It turned its first profit 34 months later, and, in 2007, recorded its highest-ever earnings.

Then 2008 struck.

“It was like, ‘What’s going to happen next?’ each day,” Kochenour said.

Banks got a black eye in the fallout as people blamed them for their hardships. And even though bigger banks, Kochenour believes, caused much of the economic crash, community banks like his suffered the backlash.

York Traditions went into damage-control mode, trying to regain the community’s confidence. It sent letters to customers and shareholders, and held community forums. It even advertised an “Ask Mike” feature on its website and local newspapers, inviting anyone, even people who weren’t customers, to reach out with questions about the industry.

The bank ultimately bounced back. It now boasts $397.6 million in assets, more than 100 employees, five retail branches and, as of June, about 4 percent of the market share in York County.

Even though the founders never could have anticipated the rough waters ahead when they stuck that initial stake in the ground in 2002, the solid foundation Kochenour helped build kept the ship afloat, Kilker said.

“I just have a lot of admiration for his leadership, his passion, his dedication. Mike comes with a lot of integrity,” he said. “Not only do his associates respect him, I think they love him. He’s a genuinely good man.”

‘We want this bank to be around forever’

A gingerbread man with googly eyes stands watch on Kochenour’s desk at York Traditions, a gift from his 5-year-old grandson. His family looks on from pictures lining his windowsills.

Their faces are part of the reason Kochenour is retiring from his CEO position effective Jan. 1. Eugene Draganosky, who joined York Traditions in 2008, will take his place.

The transition places the bank on the cusp of one of its biggest changes since its founding, but Kochenour is optimistic about its future.

Community banks like York Traditions are becoming an increasingly rare breed as bankers have to contend with more regulations – and that’s bad news for communities, Lorence said. But when they thrive, their small size and local ownership put them in a great position to build small business in their communities.

Kochenour believes York Traditions has the resources to do just that. The bank reported $920,000 in net income in its most recent earnings report, a 95 percent increase over the third quarter of 2015.

Draganosky also plans to maintain the bank’s community focus when he steps into Kochenour’s position, he said during an interview in July.

Like Kochenour, he moved into York Traditions after an already long career in banking with the hopes of working in a place where he could directly impact the community.

“Our products are going to change. Our services will change over time. Policies and procedures may change,” he said in July. “But we’re not going to mess with the culture.”

Kilker agreed. Even as banks move services online, people, he believes, will still need small institutions like York Traditions in their communities.

And Kochenour isn’t stepping away from the bank he helped to build. He will remain chair of its board and continue on as an advisor to Draganosky.

Although he is looking forward to traveling with his wife, Vicky; attending his grandson’s soccer games; and paying more attention to his own well-being, he said he can’t see himself ever not being part of the bank.

He also can’t see the bank ever not being part of the community. While some people build banks so they can sell them and turn a profit, he said, he hopes he has created a legacy that will enable York Traditions to remain a true community bank.

“Our vision from day one has been we want this bank to be around forever,” he said. “There’s a lot of people who are counting on us.”