Carlos Naudon didn't come to community banking through a traditional path. He came through necessity. The Chilean immigrant who once cleaned toilets in office buildings and spent summers in a rubber suit cleaning up oil spills in the Chesapeake Bay eventually earned a master's in finance, a CPA, and a law degree, all while working multiple jobs simultaneously. Today he leads Ponce Bank, a community development financial institution (CDFI) headquartered in the Bronx that has grown from $600 million to $3.3 billion in assets in the ten years under his tenure. We spoke with Naudon about the immigrant experience, what it really means to bank the underserved, and why the globalization of the international payment system is long overdue.
This country was built by immigrants. People forget that every person in the United States other than Native Americans are immigrants.
Mine is a typical immigrant story. My mother came to the U.S., got a job, and a year and a half later she had saved enough to send us tickets to come up. I mean, I wasn't thrilled by the idea; I was a kid. But there's not a lot of choice.
The adjustment was hard because you're not old enough to fully understand. Back then, in 1964, I went to a high school that had 1,800 kids and I was the only Latino in the school. When I went to college and into the Air Force ROTC program, there were just two of us.
You do whatever job you can get. I cleaned toilets, worked as a butcher, did inventory work at department stores during the holidays, worked as a security guard, and stocked shelves. You identify with folks who are going through that at the same time. You're not born with a silver spoon, and you empathize more, and I think that helps you understand the needs of the folks you do business with.
As for the education — to me there was no alternative but to get a professional job. I worked at a refinery for three or four summers. You saw the union paid well, but up in the office you had the office workers and out in the field you had guys like me. I realized I didn't want to be like some of the fellas who were 60 years old and had worked in the field all their life. One of the things I recognized early on is that in order to be at the table, you needed the credentials to sit there. The master's in finance, the CPA, the law degree — that gives you the ability to say to somebody, "Listen, I'm also a lawyer, don't pull that nonsense with me." That credibility was very important.
I could have retired. I didn't need the job. But the mission and what the bank does were very appealing to me. And you know, it was full circle. When I was in grad school in Rochester, there was an influx of Latinos, mostly Puerto Rican, and they had formed an association of bodega owners. They came to the school and asked for help developing those little businesses. I was the only Latino there, so they asked me because I could also speak the language. I started dealing with small business owners, teaching them accounting and law and how to run a business.
Now, 40 years later, the bank is doing the same thing.
We have a program called Small Business Boot Camp. Our staff trains small business owners and aspiring entrepreneurs on all aspects of business, wealth management, and protecting intergenerational wealth. Almost 2,000 people have gone through that program. So yes, it was very rewarding to be able to do that again at scale.
There are folks who started building single family homes 15 years ago with loans from the bank and today they're building 40-story buildings. We do a lot of business with Asian developers, Hasidic Orthodox Jewish developers, Greek developers, and it's the same story across all of them. The growth is very significant. Yesterday I had a meeting with a construction and development group that's on its fourth generation. They've been very successful, but they needed financial institutions willing to make loans to them. Money doesn't grow on trees for these folks. They need assistance.
We're a CDFI, and that's part of our role, and part of what makes it rewarding. You see that these folks have created entities that create jobs and give money back to the community.
People don't realize it. The mortality rate in the Bronx is dramatically higher than Manhattan. Life expectancy is 14 years shorter if you're born in the Bronx versus Manhattan. When I started in banking, there were seven or eight banks headquartered in the Bronx. Today there are two: us and another fairly small bank. All those other banks left. Most were acquired by larger institutions and closed branches.
When Ponce Bank was founded in 1960, it was founded as a mutual precisely because all the banks were leaving. That environment has changed somewhat, but not a whole lot. Most of our branches are in low to moderate income communities, and we participate in New York State's Banking Development District program, which provides deposits to help open and maintain branches in banking deserts.
Our loan-to-deposit ratio runs at 125%. Most banks operate at 60 to 75%. While we continue to focus on deposit growth, we access other sources of funding such as borrowing from the Federal Home Loan Bank and other sources to supplement deposits so we can make continue to make loans in our communities.
I believe institutions can do well by still doing good. You still have to deliver results; without a bottom line there's no fuel to serve the mission. We get about 1% return on average assets, which is a solid banking metric. Our profitability is sound. We balance all stakeholders: customers, communities, depositors, investors. We make sure the institution has sufficient capital to grow.
When you do good, business comes in. People understand what you do and they join the bandwagon. We grew from 600 million to 3.3 billion, and that's no accident. Developers know we support affordable housing, so when they do affordable housing, they come ask for loans from us. Small business owners and entrepreneurs know we offer training and are invested in their growth, so they open accounts because they know that service and community participation and committed responsibility matter. Nobody wants to do business with companies that exploit. They want to do business with companies that help. That's part of us.
International payments are critical. We actually have an investment in an international payment company because we view that whole area as essential. It's fascinating that the United States is a country full of immigrants and yet we play isolationist in global payments.
The global payment system is much more developed outside the United States than within it. Brazil, for example, has 100% instant payments internally. We don't. Instant ACH isn't here yet the way it is in Brazil and Europe. So for someone in our communities to send a remittance to South America, you mostly have to use wires.
We have global banks, but the banking system is not global. That's a big distinction. When somebody in Argentina signs up for Netflix, they have to pay Netflix in the United States. The transfer of those funds is difficult, and that's exactly why international payment fintechs have grown so fast, and why we made an investment in that space.
Read more about how international wire transfer automation can help community FIs capture non-interest income:
You have to invest to be relevant. Invest in technology, invest in people, invest in your customers and in the community.
When you invest in serving a family, you can make sure the children of that family grow up to become your customers. But it doesn't happen accidentally. You have to put time and effort into going to schools, teaching kids about banking. You buy software that keeps track of the efforts you're making with each customer, that assigns a customer to a banker and tracks their interaction. Those are all kinds of investments.
The value community banks provide is relationship. That's the one thing you can offer that the big banks can't replicate at scale. But you have to be in person. At the end of the day, people have to trust what you do. They have to know you. You have to know them. And they have to feel that you're not just trying to make a buck off them, that you care about their futures and their communities.
Acceleron is a modern correspondent banking platform that empowers community banks and credit unions to automate international wire transfers, capture non-interest income, and compete more effectively with big banks. With a foreign exchange (FX) marketplace and currency conversion engine, Acceleron’s API-first infrastructure helps institutions turn cross-border payment flows into efficient, revenue-generating opportunities. Serving over 200 financial institutions and facilitating more than $1 billion in international payments annually, our correspondent banking services and international payment automation solutions are pre-integrated seamlessly with Fiserv Payments Exchange, Braid, and other leading payments platforms.
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