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August 30, 2017


NEW YORK-Quontic Bank chairman and CEO Steven Schnall issued the following statement today after President Donald J. Trump's speech on tax reform in Springfield, Missouri:

"Today President Trump reaffirmed his commitment to stimulate the economy and create jobs by fundamentally reforming our tax code. From a community banker's standpoint, a reduction in the federal tax rate to 15 percent would have a dramatic stimulative impact.

"Community banks crave capital for growth. By reducing the federal rate by 20 percent, banks will have the opportunity to increase their capital via the additional resultant retained earnings and leverage that newly found capital to fund loan growth. This, in turn, will fuel the bank's staffing/employment requirements as well.

"Remember, for every dollar of capital a bank retains, it can lend $10 to $12 to businesses and consumers. What does that mean? Consider this simplified example: A community bank has $5 million in pre-tax earnings. A federal tax cut of 20 percent will result in the bank being able to create an additional $1 million in capital. This will result in $10- to $12 million in new lending capacity. And, incidentally, that net interest income earned by the bank on this new lending capacity will be federally taxable and thus generate a return to the taxpayers.

"At the end of the day, it's very simple: reduced taxes equals capital growth, which produces the increased lending opportunities and employment growth that stimulate the economy and produce a higher federal tax base!"


About Quontic Bank

Headquartered in New York City, Quontic Bank is a Member FDIC community bank that's intensely customer focused and relationship driven. Through a growing network of branches and loan production offices, we provide a full suite of competitively priced deposit products, residential and commercial mortgages and small business loans, as well as leading-edge tools that give you convenient access to your money! Learn more at

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Drew Sandholm

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