Banking New England Jan/Feb 2019

JANUARY / FEBRUARY 2019

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

THIS IS YOUR NEW CUSTOMER How Women Are Seizing More Power And How Your Bank Should Adapt

ANYTHING BUT BLUE

WHOLE LATTE BANKING

BANKERS IN THE SUN

How Blue Hills Bank’s Aggressive Marketing Stance Positioned It For Sale

Capital One Cafes Are Mixing Things Up for Millennials

A Photo Recap Of BankWorld 2019

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CONTENTS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

JANUARY / FEBRUARY 2019

22

28

New England banks had a very good 2018

Highlights from the Banking New England newsletter

Earnings

COVER STORY:

FIXING THE GENDER GAP

PAGE

PAGE

12 12

24

5

Opinion

BankWorld 2019

Photo roundup from the first major banking conference of 2019

26

Anything but Banking

Hugh Adams, Webster Five Cents Savings Bank

Loans and Lattes?

Did you see?

29

Talking Banking

Jerome Powell, Stanley Marcus, Jamie Dimon, Gary Vaynerchuk

30

Branded

Karen Marryat Blue Hills Bank

8

News

Six added to Federal Reserve Bank of Boston New England Advisory Council

PAGE

30

BRANDED Cover photo: Contributed

10

News

People on the Move

12

Statistics

Women are better bank customers than men

15

Women and Leadership

18

Branches

Coolidge Corner Gets its Tenth Bank

18

PAGE

The Gender Gap Problem

TOO MANY BANKS? BANKING NEW ENGLAND 3

LE T T E R F RO M T H E P U B LIS H ER

Who Will Win Banking’s Game Of Thrones?

I

t’s been a strange winter in New England.

Except perhaps for the towns near the Canadian border, there’s been a lot less snow than usual, a bit more rain, and temperatures that were certainly more moderate than the prior year’s bone-rattling single digits.

Given the imminent return of HBO’s survivalist blockbuster, it makes it a lot harder to use the lazy writing trope that “Winter Is Coming” for banking. Winter wasn’t that difficult, was it?

But maybe this is the wrong way to look at it.

In January, the month when the gray despair of gloom spreads widest, BankWorld returned to the Mohegan Sun casino in Connecticut.

This is a large and long-time banking show produced by American Business Media and the Connecticut Bankers Association. More than 1,400 folks came out to see what’s new in banking, and what technology dragons might be winging their way to make things hot and dangerous in the financial services world.

But the talk, and buzz, wasn’t dread, it wasn’t a dive into a winter of discontent. It was rooms packed with people looking for possibility. What new tech is available to grow community banks and credit unions? What new strategies are critical?

Figuratively, the folks who run the region’s banks and CUs weren’t looking at the snow. They were looking at the sun.

A New Season For Bankers We know that banking is changing again. It’s not a question of pillars and marble, but pixels and mobile apps. New generations see banks as askew, forcing financiers to come to them on their tech terms. And the savviest bankers aren’t bemoaning the changes, they’re exhilarated by the possibilities of creating something new. They may be aghast at the price, but they realize that there is little choice but to adapt. Evolution, eventually, takes us all.

New players on the financial tech stage – the Fintech competition – are ubiquitous.

These guys are developing products and strategies daily, trying them, pressing them out to new generations of consumers, seeing what works. When it doesn’t, they embrace the Silicon Valley credo to “fail fast,” and move on to the next experiment.

It’s a whole new way of approaching financial innovation. It’s the opposite of doom and gloom recalcitrance. It’s all about firing up new ways of thinking, new ways of approaching banking, new technology tools to deliver a faster, friendlier, warmer experience to consumers.

It’s one reason that AmBiz is launching several new initiatives this year. One of our most exciting is coming to the new MGM Springfield at the end of June. As the warmth spreads, we’ll be unveiling the new Best Bank Expo (www.bestbankexpo.com), a oneday think tank of best practices, benchmarked data, and best-of-breed products to make your bank or credit union the best it can be. Every speaker, every product demo is vetted to show that it’s either going to be immediately actionable, or it won’t be on the agenda.

That makes, we hope, for a hot event. And maybe a new paradigm of embracing, rather than fearing, the changes on the way. Which could make for stronger credit unions, more robust community banks, and a fertile financial industry. After all, Summer Is Coming.

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

STAFF PUBLISHER Vincent M. Valvo ASSOCIATE PUBLISHER Barb Dimauro EXECUTIVE EDITOR John Hassan MANAGING EDITOR Keith Griffin CONTRIBUTING EDITOR Patrick Sanders OPERATIONS MANAGER Kurt Schenher ONLINE CONTENT DIRECTOR Navindra Persaud GRAPHIC DESIGN MANAGER Stacy Murray GRAPHIC DESIGNER Scott Ellison Interested in receiving additional copies of Banking New England?

Call (860) 719-1991 or email kschenher@ambizmedia.com

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Banking New England magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.

Advertising, editorial and production inquiries should be directed to: American Business Media LLC

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Publisher & CEO

4 BANKING NEW ENGLAND

345 North Main St., Suite 313 West Hartford, CT 06117

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pat rick

What’s

OPINION

el

By Micha arm: Capital One’s desire to “unbank” the brand by launching several café model branches, designed to be warm and inviting environments without any high-pressure sales, is an interesting idea.

However, we have a few in Boston and having visited recently, I didn’t exactly know what to make of it.

When Capital One bought ING Direct in 2012, the deal included ING’s Orange Cafés. 18 years ago, ING opened its first café in the United States in New York City, after successes in Canada, Australia, France, Italy, and Spain, as an attempt to create a new experience with customers. With that history as a backdrop, it’s interesting to see the buzz these days around Capital One. Coffee and its service is provided by Peets, Wi-Fi is free, and pastries are from local purveyors, a nod to Millennials who like to support their neighbors. Though it’s not required for purchase, Capital One cardholders get a 50% discount on drinks.

And they have steadily expanded on the idea over the years with 30 café branches in the United States now, after inheriting 11 total in the US and Canada in the purchase. Clearly, there is something about the bank/café model that is working for Capital One.

rk i K S.

It certainly is time to retool the branch if not outright question its existence. The bank branch experience hasn’t changed very much over the years and feels as outdated as a fax machine. And this is in an era where retail giants like Apple have raised the bar for in-store experiences. While the comparison is a little unfair, we can look to the retail sector for some insight into consumer behaviors in understanding what the branch experience should be and if Capital One’s café strategy is in sync with the approach of leading retailers.

One factor retailers acknowledge and design for is the evolution of the shopper’s journey.

Nowadays the shopper’s path to purchase increasingly crosses between physical and digital worlds. Retailers are working to devise seamless omnichannel experiences to best serve these changing behaviors. Today’s shoppers are looking for a stress-free shopping experience that supports an increasing desire to visit the physical store to “test drive” products firsthand and prior to pricecomparing and purchasing – behaviors which are moving increasingly online. With packaged goods, this makes a lot of sense but with products like mortgages, loans and other financial products it’s a little more complicated. Because these products are intangible and complicated, having human beings standing by to help simplify things and to answer questions is a winning strategy that nicely aligns

BANKING NEW ENGLAND 5

from Google offering , App l a i c n le, a n P i f a

75% of millenials say ...

e over their nation Squar w i d eb a

uthey

venue… There’s more space and more tables here – Starbucks is further away and always too crowded.” When asked if this felt like a reinvented bank, he chuckled slightly, “I have no idea. Sort of… If I needed help with bank stuff I guess I would ask…” motioning to a CapitalOne expert nearby.

The relaxed atmosphere and aesthetic is the draw and the banking is an afterthought or not a thought at all for those camped out with headphones and laptops. It’s an alternative to Starbucks or Café Nero and that feels like what Capital One is going for – but is it sustainable as a business investment I wonder? “It’s a good concept… Coffee is an everyday ritual”, I overheard an equally intrigued visitor mention to one of the Capital One folks standing by. To me it’s reminiscent of the old digital strategy from the early 2000’s: get people to your website and the

r al, o ayP

’d be more e xcite db y

with consumer preferences.

So, what do the people that visit these cafes think?

I asked an appropriately scruffy young man sitting at a beautiful (walnut?) table sipping coffee out of a ceramic mug while flicking the trackpad of his Apple laptop. “I come here to do some work as a change of

nk.

6 BANKING NEW ENGLAND

economics will work themselves out.

Another key success factor for Capital One to contend with on something billed as “reinvention” is their reputation as a reinventor.

I have no doubt consumers want a reinvented relationship with banking and financial services. That’s been proven by the scores of successful fintech companies across wealth management, lending and payment sectors. Payment companies Paypal and Venmo have had great success delivering a reinvented way to pay and share money and others have since followed by rethinking savings, checking, bill paying and various other components of the banking experience.

It’s not surprising that many of the innovators that provided new and reinvented solutions to the market were not incumbents like Bank of America, Citi, JPMorgan or others. Generally, consumers are more open to invention from a fresh new company that can authentically claim they’ve looked at the situation in an entirely new way. These disruptors can step into an industry and say to the market leaders We’ll take it from here without a legacy

“Capital One is to be commended for doing something so odd and courageous (and not at all inexpensive).” of brand perception to overcome. In a recent banking survey of millennials, 75% say they’d be more excited by a financial offering from Google, Apple, PayPal, or Square over their nationwide bank.

Capital One’s success at reinvention of the branch goes beyond just convincing people to “bank differently”. In some ways, they’re also asking customers to believe Capital One, in its 31st year, is a company with the perspective required to truly reinvent the branch.

Few established brands or companies succeed at convincing consumers to believe in a new ethos without a long campaign of demonstrated successes that earn incremental trust while demonstrating a true commitment to change. Apple could never have released the iPad – a device about which David Pogue said “I don’t know what I need this for but I’m buying it anyway.” without the prior wins with consumers (Mac, iPod, iTunes). Consumers are savvy, and these announcements are often met with skepticism. Skepticism drives behavior and can be a wet blanket on even the strongest of ideas. So Capital One’s claim at reinventing the branch is brave but I’m not sure they’ve earned that opportunity in the hearts and minds of consumers which may impact how much actual commerce happens over the piping hot cups of Peet’s.

Incumbent brands should not give up and stick to the status quo. They need to account for the brand perception they have cultivated when developing innovation strategies. This perception of “steady sameness” and lack of innovation and change is a real barrier to success. If you’re going to earn the right to be different, that will take time and investment and you need to give consumers what branding experts call a “reason to believe” – that is, why is now different? What’s changed?

In other words, why is Capital One uniquely positioned to do these cafes and why are they a strong idea for banking? I don’t see this incorporated into Capital One’s strategy and that may hamstring

adoption of this model especially if Amazon, a company with a solid trackrecord of innovation, decides to enter the market with a physical presence. And with 500 Whole Foods stores, this is a rumored and real possibility.

The final and perhaps most challenging issue I see here is something that’s been a scourge for the banking industry for years: a lack of transparency. Let’s get real - most banks (especially the big boys) are seen as untrustworthy by the public. There is an inherent “You’re screwing me, I just can’t figure out how” sentiment amongst most consumers that has led many - especially millennials - to explore new ways to move, lend and manage their money.

Digital upstarts have emerged such as Ally, Moven and Aspiration and a slew of many others to serve this appetite to defect. I spoke to one of the Capital One employees on a return visit. He had the kind of pleasant nature and friendliness that is clearly recruited for, “Sometimes when people come in and I’m up front, I will say hi and…” (holding up his hand) “They’ll say ‘I’m all set’. They think I’m trying to sell them when I’m really just saying hi!”

Looking at the Capital One café through a filter of trust and transparency, customers might interpret cafés as a dishonest misdirect. It could appear like a tactic of plying customers with coffee while masking the real intentions.

“Are they watching what websites I visit on the free wifi?” Because the strategy is so unconventional – and the reputation of banking is so poor - it could be seen as a trick, even if it isn’t. Customer perception is a real and serious challenge.

I paid for my coffee and sat for a while surveying the beautifully appointed surroundings. Lots of wood, leather fabrics and just the right level of designer lighting all created a mood that absolutely had me wanting to spend time here. As I sat contemplating “Where are we going with this?” I couldn’t help but root for this to work.

Capital One is to be commended for doing something so odd and courageous (and not at all inexpensive). They must do something to stay relevant and compete as do the all large, national banks. Behaviors are changing. They may be ahead of the market here and we will all soon discover how natural this marriage of lattes and loans is. If these cafes truly do create a new experience paradigm that customers love, they will have earned the right with consumers to try many more innovative moves in the future. ■

_________________________ Michael S. Kirkpatrick is Senior Vice President, Client Experience & Strategy and leads the Financial Services Practices at Mad*Pow, an Experience Design agency in Portsmouth, NH and Boston, MA.

BANKING NEW ENGLAND 7

NEWS

Boston Fed Reserve Bank Adds Six To Advisory Council

By KEITH GRIFFIN

S

Carol Conway Bulman

Karen Colberg

Brad Hittle

ix new members have been added to the Federal Reserve Bank of Boston’s New England Advisory Council (NEAC). The council advises the bank on economic trends as viewed through the prisms of their own companies and respective industries.

Members rotate every two to three years. At quarterly meetings they share perspectives on a range of business conditions, including revenue forecasts, employment practices, capital spending, and access to credit.

Newly appointed are: Carol Conway Bulman is the CEO and President of Jack Conway & Co., Inc., the largest locally-based independent real estate firm in Massachusetts. She is vice-chair of the Board of Directors for the Leading Real Estate Companies of the World, (LeadingRE), a member of the Board of Directors for the MLS Property Information Network, and serves on the South Shore Health Board of Trustees.

In addition to serving as co-CEO, long-time King Arthur Flour employee-owner Karen Colberg serves as chief brand officer. Before coming to King Arthur Flour in 2005, Colberg worked for eight years as divisional merchandise manager for Gap, Inc., and participated in General Electric’s financial management program.

Two Roads Brewing Company president and CEO Brad Hittle began his career in brand management, first for Johnson & Johnson, then at Unilever, and later as the group director of marketing for Labatt USA, where he led brands including Rolling Rock, Tecate and Dos Equis.

Gregory Janey is the CEO and president of Janey Construction Management and Consulting Inc., a firm providing professional construction management services throughout the Northeast and Mid Atlantic regions.

8 BANKING NEW ENGLAND

Gregory Janey

Oliver Smith

Kierston Van Soest

Oliver Smith, CEO of O. & Co. is a strategic advisor for mergers and acquisitions activities for many financial institutions, privately held companies, family offices, and private equity funds.

Kierston Van Soest is CFO and Treasurer of L.L. Bean, Inc. of Freeport, Maine. Prior to L.L. Bean, Van Soest held executive finance roles with Time Inc. (New York City) and the public accounting firm Arthur Andersen (Baltimore; Warsaw, Poland; and New York City).

Colberg said she will bring a unique perspective to the council because King Arthur Flour, based in Norwich, Vermont, is 100 percent employee owned. She added, “It’s a great opportunity to share and discuss how our individual businesses are addressing current and forward-looking economic issues. Be it general performance, organizational development, labor markets, taxes, and more – I love the cross-section of business leaders coming together to learn from one another and how the broader environment is impacting our businesses and our decisions.”

Smith, who is based in Portland, Maine, said he joined the council because it’s an opportunity to promote better understanding of the business interests of Maine. “I feel my role will bring the Fed and my peers an important perspective of Maine’s unique business economy. Maine is a large state with different and unique challenges depending on where you are in the state,” he said.

Current council members include: James T. Brett, president and CEO, New England Council; Travis McCready, president and CEO, Massachusetts Life Sciences Center; Nannu Nobis, CEO, Nobis Engineering; Paul Rumul, president, The Davenport Companies and Jessica Tang, president, Boston Teachers Union.

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BANKING NEW ENGLAND 9

NEWS

NEW ND ENGLA

PEOPLE ON THE MOVE LOCAL PROFESSIONALS MAKING THEIR MARK IN NEW ENGLAND BANKING

CONNECTICUT

MAINE

Charla Stetson, previously vice president of operations and member services, is the new CEO of Windsor Locks Federal Credit Union, a $59 million-asset institution. Her ascension comes after the retirement after 12 years of former president and CEO, John E. Franco Jr. Stetson joined WLFCU in 2011. She is a graduate of Asnuntuck Community College and continues to study at New England College of Business and Finance. Stetson is also a graduate of the executive education program of the Credit Union League of Connecticut, a statewide association.

Also promoted was Patricia Javorski, who spent 11 years in the credit union’s accounting department. She was named chief operating officer.

Gorham Savings Bank President Steve deCastro took on the additional role of CEO starting Jan. 1, succeeding Chris Emmons under a two-step transition plan announced last year. deCastro, who joined the bank in July 2016 as executive vice president of commercial banking, was promoted to president last April, working alongside Emmons until the end of 2018, when Emmons retired after 15 years with the bank.

As Gorham Savings’ president and CEO, deCastro will serve as the primary point of contact for the bank’s board of directors and shareholders and lead his executive team in the development and administration of the bank’s strategic direction, operations and resources.

Stetson Named Credit Union CEO

Thirteen Named New Leaders In Banking

The Connecticut Bankers Association honored 13 people as the 2019 New Leaders In Banking at a gala dinner attended by more than 150 people at The Mohegan Sun on January 17. They were selected for being in the forefront as banking moves ahead in Connecticut.

As Stephen Lewis, Connecticut Bankers Association president, observed during the ceremonies, these 13 bankers were selected as among the best of the 10,000 people who work in banking in the state.

The winners were: Dalila Borges, Bank of America Mickie-Ann Budny, Litchfield Bancorp John Estelle, Dime Bank Matthew Fazo, Thomaston Savings Bank Amanda Goewey, Salisbury Bank Ornet Hines, Liberty Bank Whit Holden, Newtown Savings Bank Mike Kleinschmitt, Collinsville Savings Society Scott Kozek, Union Savings Bank Meghan O’Connor, PeoplesBank Laura Silver, Fairfield County Bank Katie Smith, Newtown Savings Bank Gregori Tonon, Northwest Community Bank 10 BANKING NEW ENGLAND

Gorham Savings Names DeCastro CEO

Pair Named To Katahdin Board Of Directors

Katahdin Bankshares Corp., the parent company of Katahdin Trust Company, a community bank serving Northern Maine and the greater Bangor and Portland regions, recently announced the appointment of Marianna “Molly” Putnam Liddell of Yarmouth and Keith P. Bourgoin of Hampden to its board of directors.

Liddell is a partner at Pierce Atwood LLP in Portland, where she is chair of the Trusts & Estates Practice Group, serves on the firm’s Management Committee, and is a Fellow of the American College of Trust and Estate Counsel. Bourgoin is the managing partner for Haverlock, Estey & Curran, LLC in Hampden where he services clients throughout central and northern Maine providing small business accounting, corporate and individual income tax services, attest services, and consulting services.

MASSACHUSETTS

Three Promotions At MutualOne Bank

Mark R. Haranas, president and CEO of MutualOne Bank in Framingham, MA, has announced the promotion of three employees.

Gregory Kennedy of Goffstown, NH, was named senior vice president of retail banking. Kennedy joined the bank in January 2016 and most recently served as first vice president of retail banking.

George Gilroy of Northborough, MA, has been promoted to first vice president of information technology.

Gilroy joined the bank in 2012 and most recently served as vice president of information technology. He has previous experience with John Hancock Financial Services, MODIS IT and IBM. Clarice D. Santos of Framingham, MA, has been promoted to vice president of client services and electronic banking. Santos joined the bank in 2008 and most recently served as assistant vice president of client services and electronic banking.

Rodehorst Promoted To Fed Security Post

Mike Rodehorst has assumed the role of vice president, chief information security officer, and privacy officer at the Federal Reserve Bank of Boston. Rodehorst joined the Boston Fed in 2007 as a network security engineer and was promoted to assistant vice president for information security in 2016 and named the data privacy officer in 2017. He is accountable for information security and data privacy for the Bank.

NEW HAMPSHIRE

Ryder Named VP At Bank Of New Hampshire

Bank of New Hampshire has promoted Megan Ryder to vice president, corporate cash management officer.

Ryder joined Bank of New Hampshire in January 2018 with more than eight years of experience in the banking industry and a broad knowledge of retail banking, business banking and wealth management. In her new role, she will assist customers with protecting their business finances and creating efficiencies in monitoring accounts and daily operations. She will work out of the bank’s Moultonborough office, serving the greater Lakes Region and Northern market areas.

Merrill Named President Of NH Bankers

The New Hampshire Bankers Association has appointed Kristy Merrill as its new president. She spent nearly 15 years at the New Hampshire State House.

Most recently, Merrill served in multiple roles at the New Hampshire Senate since 2003. She was chief of staff for the last four years, serving as senior advisor to the Senate President and Senate Majority Leader.

Mark Pitkin, board chair, NH Bankers Association and President/CEO of Sugar River Bank, said Merrill was selected for the role because of her in-depth knowledge and experience of the state legislative process, as well as her strong management and communication skills.

RHODE ISLAND

Washington Trust Announces Senior Management Promotions

The Washington Trust Company, based in Westerly, Rhode Island, recently announced the following promotions within the Bank’s Senior Management Team: Amy U. Arruda was promoted to senior vice president, retail banking. She joined Washington Trust in 1997.

Since 2012, Arruda had been vice president, retail sales.

Kristin L. Battisti was promoted to senior vice president, compliance. Battisti began her career with Washington Trust as assistant vice president, compliance, in 2010 and was promoted to vice president, compliance, in 2011.

Mark A. Smithey was promoted to senior vice president and chief information security officer. Smithey joined Washington Trust in 1997 and has more than 30 years of experience in technology and information assurance.

Patricia M. Hartford was promoted to senior vice president and manager of cash management services. She had been vice president, cash management since 2007.

Ali Promoted To Senior Vice President

Bristol County Savings Bank has promoted Hasan Ali, to the position of senior vice president/commercial lending at the bank’s Warwick, Rhode Island location.

Ali will be responsible for supervising the bank’s lending team and developing and managing commercial loan and deposit relationships at the bank branch.

Before his promotion, Ali served as vice president/ commercial lending for the bank. Previously, Ali held many positions with Santander Bank, N.A., including market manager/team leader – business banking in Boston; vice president/relationship manager – business banking, Providence, Rhode Island; and small business relationship manager, also in Providence.

Ali is also a board member for the Ocean State Business Development Authority in Providence.

VERMONT

Northfield Savings Promotes LaPerle

Northfield Savings Bank promoted Maryellen LaPerle to vice president, mortgage banking. She is based out of NSB’s Montpelier office.

LaPerle has more than 30 years of banking experience and joined NSB in 2000 as a mortgage banking officer.

She has a bachelor’s degree from the University of Vermont and is a graduate of the Northern New England School of Banking.

Posternak Hired As NBT Bank Manager

NBT Bank New England President Matthew Durkee announced Michael Posternak has been named the new branch manager for the bank’s Burlington Office.

Posternak has 18 years of experience in the financial services industry, starting as a market manager for the Chittenden Bank in St. Albans in 2001. Before joining NBT, he spent eight years working as a branch manager in Ottawa, Ontario Canada.

BANKING NEW ENGLAND 11

STATISTICS

By Bruce Paul, Special to Banking New England

Women And Banking: The Force Is With Them WHY XX SHOULD MARK THE SPOT OF YOUR BANKING OUTREACH

By BRUCE PAUL, Special to Banking New England

T

he latest Banking Benchmarks for Massachusetts, Connecticut, New Hampshire and Rhode Island are out, and we have conducted an exclusive analysis for Banking New England into the gender differences in banking across the region.

We analyzed 546,695 reviews from both women and men to tease out the differences. Some of the results may surprise you.

THE TECHNOLOGY DIVIDE

How many banks are thinking of gender when they roll out new managed services?

12 BANKING NEW ENGLAND

In a reversal of roles in years past, women are now a bit more likely than men to use the online and mobile tools their bank offers to do their banking. Over 67% said they prefer the electronic tools (mobile and online) over personal contact (in-branch and phone). By comparison, 62% of men prefer electronic banking. The number one reason women cited for preferring banking electronically was because they are too busy to go into a branch or call on the phone, and they prefer the speed and ease of online and mobile tools, not exactly breaking news.

What might surprise some is that women are also significantly more capable than their male counterparts at using the technology: 14% more capable according to the respondents themselves (and that is with the built-in overclaim we see with men). This capability gap is different by age group: Millennials have about the same technological competence regardless of gender, but male Baby Boomers are significantly worse at figuring out the tools compared to their female counterparts.

Not only is the technology gap significant, but it is growing. Women are more likely than men to say that they will actually increase their use of electronic banking this year. Given this gender discrepancy, how many banks are thinking of gender when they roll out new managed services?

Our Benchmarks cover 1,854 banks across the Northeast US, but I only know of 3 institutions that have ever considered gender differences in their approach to technology roll out.

DOES THE PERSONAL TOUCH MATTER?

Some Community Bank CEOs I have talked with have wondered if women are using branches less because they don’t have a good experience in the branch—kind of like the stereotypical car repair shop where women might feel less respected. We analyzed the data to see if this is the case, and actually the opposite is true. Women are 20% less likely to get treated with disrespect than men, according to the men and women’s own experiences. Stop the presses and contact your state lobbying organization! Banking is an industry where female customers are treated better than their male counterparts!

Women also report 27% lower levels of pushy staff, while getting the same level of proactivity from their bank as the men do. They seem to get the best of both worlds. This is especially true in Connecticut and Western Massachusetts as women in these markets get better service than men. (New Hampshire has the lowest gender discrepancy, by the way).

Overall, women are 6% more likely to consolidate their business with one institution.

And they are also 8% more likely than men to remain with a bank long term. This is exactly what all banks want: greater cross sell to current customers and lower attrition of those customers over time. As a matter of fact, you can take that to the bank: the average lifetime value of a female customer is actually $308 higher than a male customer. So, meeting their needs is clearly a good investment.

ARE WOMEN ATTRACTED TO DIFFERENT BANKS THAN MEN?

The answer to this is mixed and really depends upon the market. But not all banks are created equal. Some banks in New England do a better job for their female customers than others. In some of the larger metropolitan areas, like Boston, Hartford, Providence, etc. there is a big difference between the banks that women will consider vs the ones men will consider. This difference narrows in many of the more rural areas.

The following table shows the top-rated banks in New England as rated by women. In about half of the cases, these banks are also top performers for male customers, but in the other half they are not.

If you would like to see the ranking for a specific bank, whether by women only, or for all customers, just email info@cescx.com. ■

ARE WOMEN BETTER CUSTOMERS?

Women might be happier than men with the electronic banking tools and with the service they get from their banks, but do banks get rewarded for that performance? The Benchmarks show a clear answer: yes.

Rank Among Women

_________________________ Bruce Paul is president and CEO of Customer Experience Solutions, which produces the semiannual Massachusetts, Connecticut, Rhode Island and New Hampshire Banking Benchmarks.

Rhode Island

Connecticut

Eastern Massachusetts

Western Massachusetts (incl Worcester)

New Hampshire

1

Milford Fed

Salisbury

Wellesley Bank

Cornerstone

Walpole

2

Washington Trust

Stafford

Cape Cod 5

Florence

Mascoma

3

BankNewport

Collinsville

Village

ESB (Easthampton) Passumpsic

4

Centreville

Ion

Haverhill

Main Street

Meredith Village

5

Savings Institute

Thomaston

Martha’s Vineyard

Hometown

Merrimack County

BANKING NEW ENGLAND 13

Learn where your competition is strong and where it is vulnerable.

Over 1 million independent, unbiased reviews by your own customers and your competitors’ customers that can help you discover where you have a competitive advantage, and where you are vulnerable.

To learn more about our subscriptions or to get your Customer Experience Benchmark Report, visit cescx.com/benchmarks or email info@cescx.com.

14 BANKING NEW ENGLAND

WOMEN AND LEADERSHIP

Rising Through The Ranks At Banks

HOW TO CLOSE THE LEADERSHIP GENDER GAP

By KAREN KIRCHNER, ELLEN KEITHLINE BYRNE, and DENISE D’AGOSTINO

T

here is undeniable evidence that a diverse leadership team and workforce leads to better business results. The Credit Suisse Gender 3000 report states, “where women account for the majority in top management, businesses show superior sales growth, high cash flow returns on investments and lower leverage.”

“However, despite this clear advantage, many companies, including financial institutions, are making slow progress in addressing the gender gap in leadership.

ONLY

While women make up 44% of the S&P 500 labor force, only 26% of executive and senior level managers are women and only 4.8% of CEOs.

42%

WHAT’S GETTING IN THE WAY?

There are myriad factors at play, both individual and systemic. Women themselves can improve in areas such as quieting their inner critic, taking more risks, and unabashedly owning the true value they bring. Yet they will still face significant external barriers, such as unconscious bias, unfair promotion practices, and male-dominated corporate cultures.

For both individual women and banks, there are five steps that should be part of any effort to confront the gender gap problem.

Start at the executive level. It makes a huge difference when those at the top move beyond lip service and actively promote initiatives that help women advance.

Only 42% of companies hold senior leaders accountable for making progress toward gender parity. Yet it’s hard to imagine a groundswell of change when leaders aren’t formally expected to drive it.

OF COMPANIES HOLD SENIOR LEADERS ACCOUNTABLE FOR MAKING PROGRESS TOWARD GENDER PARITY. BANKING NEW ENGLAND 15

The Women in the Workforce 2018 report by McKinsey&Co., sponsored by LeanIn.org, recommends setting annual targets for promoting women and holding executives accountable for achieving them. If results are being tracked, managers are more likely to scrutinize their decisions and question their assumptions, leading to more women getting a seat at the table.

Women need senior level sponsors who see their potential, introduce them to key contacts and recommend them for opportunities.

Companies need to enable the key relationships that make a difference. Nine in ten women do not feel confident in asking for sponsors; and eight out of ten lack the confidence to seek mentors, according the 2015 KPMG Women’s Leadership Study. And yet, we know that these relationships are key.

Kelly Watson, KPMG Partner and Board Member, explains that “Relationships are the building blocks of anyone’s life or career, and making those connections has been the single most critical thing for my career advancement.”

Both women and their companies need to proactively connect high-potential women with senior leaders who can share lessons learned, help navigate politics and open doors. Networking opportunities that encourage employees to mingle, regardless of level, are also key. Our clients often ask us, “How can I build a relationship with someone I never see?”

FOSTER AN INCLUSIVE AND RESPECTFUL CULTURE

This starts with making the expectation clear that managers at banks and credit unions should demonstrate zero tolerance for biased behavior and language when they observe it at any level of the organization.

But fostering an inclusive environment requires going a step further. In the Harvard Business Review article “Women, Find Your Voice” from 2014 authors Kathryn Heath, Jill Flynn and Mary Davis Holt found that women feel unsupported and frustrated in many high-level meetings, often unable to get a word in edgewise and are frequently interrupted. Having leaders at the table who regularly solicit the views of those less vocal is important.

Former Chairman and CEO of Pepsi, Indra Nooyi has discussed how she would regularly call men out who interrupted women in meetings. This has the double benefit of adding women’s voices to the conversation as well as giving men valuable feedback on unacceptable behavior.

An inclusive culture also encourages women to use the benefits designed to help them manage their lives

outside of work. One female leader at a major investment bank explained that while her company has a flextime policy, it’s not considered culturally appropriate to use it. Another described the stress of balancing two kids, leading a team and keeping up the façade that she has it all together. For women to rise through the ranks, they need acknowledgement and support for the complications they face on the home and work fronts.

BUILD AWARENESS OF UNCONSCIOUS BIAS

It’s critical to pay attention to whether women and men are evaluated differently. Are you categorizing strong, assertive behavior in a woman as abrasive, while that same behavior is viewed as leader-like in a man?

Training in unconscious bias helps to build awareness of the thinking patterns that lead to discrimination. This awareness results in evaluations based more on merit and less on comfort level. A senior manager may lean towards a candidate who has a similar background to his, but when he learns to question his biases, he looks for more objective data to use in a hiring decision.

Research also suggests that mandating a diverse slate of candidates helps companies make better hiring and promotion decisions. Thinking about candidates in groups helped managers compare individuals by performance, while evaluating them individually led to gender-biased decisions.

GIVE WOMEN THE FEEDBACK THEY NEED TO SUCCEED

Robyn Ely, faculty chair of the Harvard Business School Gender Initiative, explains that women get qualitative feedback that is more positive than men, but it’s also more vague. According to Ely’s research, men tend to get more specific, developmental feedback, which helps them correct behaviors that are getting in their way. By handling women with kid gloves, managers are slowing their development, because they don’t know what to work on to improve. Training managers in the importance of giving specific, developmental feedback to both men and women is key.

Helping women develop the behaviors and skills that position them for leadership success at your bank is critical. Combining those development efforts with organizational initiatives provides the catalyst for real and lasting change, helping women to shatter that glass ceiling once and for all.

Moxie Leaders was founded by (from left to right) Denise D’Agostino, Karen Kirchner and Ellen Keithline Byrne, a team of organizational leaders, executive coaches and a PhD, who create programs specifically for women leaders –– to help them rise up in today’s competitive world and make their mark. For additional information visit www.moxie-leaders.com.

16 BANKING NEW ENGLAND

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BANKING NEW ENGLAND 17

BRANCHES

When Is A Community Overbanked?

I

By KEITH GRIFFIN

s it possible for a community to have too many bank branches? Is there a magic number or formula for determining the best answer?

Coolidge Corner in Brookline, Massachusetts, is a mixture of retail and residential, bisected by the MBTA’s street-level Green Line that runs along Beacon Street. It has an issue most central business districts desire: the possibility it’s overbanked.

The affluent neighborhood, located in a wealthy Boston suburb, is preparing for the opening of a 10th bank branch come April.

In one city block, between Harvard Avenue and Webster Street along Beacon Street, which could be considered Coolidge Corner’s main drag, there are four branches: Century Bank, Brookline Bank, Bank of America and Santander (plus the soon-to-open Chase branch). Less than a block beyond Harvard, sits a Boston Private Bank and Trust

Coolidge Corner will soon have TEN bank branches. Is that good?

18 BANKING NEW ENGLAND

When building out branches, banks need to focus on socioeconomic segments.

PERMISSION TO BRANCH OUT

Photo by Gen Passport, findingparisinboston.com.

location. Head less than two blocks northeast on Harvard and you’ll encounter Eastern Bank, Webster Bank and Citizens Bank branches.

Brookline borders Boston and is a prosperous city with an average household income of about $125,000, according to tax return data from 2012. Opening a bank branch there would seem to be a license to print money. Turn on the lights, open the door, and wait for the customers to line up.

On the other hand, despite Brookline’s affluence, Coolidge Corner may hit the breaking point when Chase Bank, as part of its major expansion into Boston, opens a branch there in early spring.

A Chase spokesperson wouldn’t speak directly to bringing the 10th bank into Coolidge Corner (Named

after the Coolidge & Brother General Store that opened in 1857.)

“Brookline is an attractive market for a few reasons: it has a good mix of density, traffic flow, and close proximity to public transportation,” said Carolyn Evert, Chase’s vice president for Northeast regional communications.

So, what best describes being the latest bank to join such a competitive market? Is it an easy payday or a bad idea? Is Coolidge Corner overcrowded when it comes to bank branches? Not to mention a Capital One café?

It’s not so simple. Michael Goman is president of Bloomfield, Connecticut-based Accubranch.

His firm specializes in giving community banks and credit unions guidance when selecting new

An interesting factor is how little control the government exercises over bank locations.

It’s almost a laissez-faire situation. Massachusetts’ Division of Banking does require banks to get approval at either the state or federal level for new branches, but it’s not a rigorous process. As the state’s application form reads, a bank needs to provide the primary purpose of the branch.

The form goes on to say, “Provide an affirmative statement as to why the proposed transaction meets relevant standards for public convenience and advantage.

Brief comments such as ‘will be adding new services’ or ‘new competitor to the area’ will generally be sufficient.

BANKING NEW ENGLAND 19

CURRENT BANK BRANCHES IN COOLIDGE CORNER These are the nine bank branches currently in Coolidge Corner. The info in parenthesis reflects when the branches are first included in the annual FDIC deposit market share report or when the branch opened when known. The banks are listed in the order of market share for the 02446 zip code that includes Coolidge Corner.

Bank of America (first shows up in 2005 report) currently has a 40.47 percent share of the market.

Brookline Bank (parent bank has been open since 1871) has a 20.68 percent share.

Citizens Bank (formerly RBS Citizens until the 2014 report) has a 15.91 percent share.

Santander Bank (formerly Sovereign – first shows up in 2014 report) shows a 9.29 percent share.

East Boston Savings Bank (premiered in 2016 report) has a market share of 3.61 percent.

Boston Private Bank & Trust (appears in 2011 report) shows a market share of 3.48 percent.

Century Bank and Trust (branch opened in 2010) has a market share of 3.33 percent.

Eastern Bank (debuts in 2011 report) shows a market share of 1.97 percent.

Webster Bank (in January 2016 report after acquiring Citibank locations in Boston market) has a market share of 1.28 percent.

Chase Bank branch scheduled to open in April 2019 Source: FDIC Deposit Market Share Report for Zip Code 02446

20 BANKING NEW ENGLAND

“For many downtowns, it’s more of a case of a consolidation of branches or a focus on how they are used.” branch locations. “We are always amazed there are bankers out there who make their branch decisions based on the seat of their pants,” says Goman.

He said bankers would see wealth in an area and not go beyond that factor to justify a branch location. Instead, what banks need to do when building out branches is focus on socioeconomic segments. The wealthiest segments aren’t always the right match.

Wealthy markets don’t necessarily fit a bank’s top socioeconomic segments, Goman explained. The middle of the socioeconomic segments might work best. “We will tell banks to go after the people who love you,” he said. That could mean sponsoring youth baseball teams, events at the local VFW or high school programs to reach their customer base.

Small-to-medium-sized banks need not fear one of the Big 4 banks coming to town, he added. Some customers will only deposit their funds at small banks, while others need the diversity of services a big bank can offer. Banks should consider like-minded competitors when exploring a new location. Battling an existing community bank may be too expensive to justify the return on investment, Goman said.

Beyond looking at similar competition, banks also need to explore a market’s deposit capacity but read the numbers wisely.

A market seemingly above capacity could yield benefits for a new branch.

Goman cited as an example an area having a $1 billion capacity.

If an area has only $800 million in deposits, the other $200 million, he explained, is being exported to other markets. A larger bank might get that money to return to an area. On the flip side, a market might have that $1 billion capacity, yet the numbers show $1.2 billion in deposits. Is that a market bulging at the seams?

Not necessarily, Goman said, because one bank might have a town’s tax payments or a large manufacturer’s payroll. Isolating one branch’s market share could demonstrate a potential for more activity.

Brookline Bank, which has been in the community since 1871, has seen its deposits grow only slightly from June 2008 when it had $394.6 million to lead the FDIC data for the zip code market that encompasses Coolidge Corner at 35.3 percent share. As of June 2018, Brookline Bank had $418.2 million, but had been leap-frogged by Bank of America, which grew its local deposits from $300.5 million in June 2008 to $818.6 million for a 40.4 percent share of deposits.

Something else to factor in when determining locations is that it is not all about retail banking. Goman said a site might be useful for small business clients. A bank might start to look at small businesses in their area, the number of employees they have, ownership, annual revenues. A branch may discover they’re good at certain levels of small business banking. “After some study, we might say Coolidge Corner has a high number of small businesses that fit your small business profile perfectly,” he said.

BRANCHING OUT? Mike Goman offers this overview of five elements a bank should consider when deciding if a branch location makes sense.

1. Identify your socioeconomic segments. Richer is not always better. There’s money to be made in being a blue-collar bank, as well as a white shoes financial institution. It’s just tough to appeal to both successfully.

2. Go where your customers work. Research shows customers will open an account at a branch near their homes but then use it once a year. However, branches near work get more of a workout, even if it’s just using the ATMs. 3. We’re not a nation of walkers.

Customers won’t walk 20 minutes to a branch. They’ll hop in the car. That’s why banks need to be in populated areas to attract customers who start to hesitate when they must walk more than a city block.

4. For big banks, branches can be billboards. Smaller banks don’t have that luxury of waiting years for a branch to be profitable.

5. Think ethnic. A slowly growing trend is branches targeted at native language speakers, whether it’s Vietnamese customers in Los Angeles or Hispanics in El Paso. It hasn’t come to New England yet, but it will be here soon.

There’s also the risk a bank branch might make perfect sense for business reasons but could harm a business district. There’s no data that’s happening in Coolidge Corner, but Matthew Wagner, vice president of revitalization programs for the National Main Street Center, Inc. says it’s a possibility. “It’s not just banking. Too much concentration of a business service could take away from viable retail space,” he said. Neither Wagner nor Goman would speak to whether Coolidge Corner specifically has too many bank branches.

Wagner said his advocacy group, though, typically sees the opposite problem. “For many downtowns, it’s more of a case of a consolidation of branches or a focus on how they are used,” Wagner said, adding most banks are downsizing their footprints. Experiencing a growth in bank branches is counter to current national trends.

“Banks are critically important to downtowns,” Wagner explained. They have employees who generate foot traffic. Plus, bank branches can help attract businesses who want convenient locations for their employees.

Goman added that sometimes the big national banks would open a branch in a desirable location almost as a billboard without an immediate concern about profitability. To offset the higher cost, though, big banks might settle on smaller spaces. He said the trend for some big banks now is 800 sq. ft. of space housing an electronic branch with an ATM, a loan officer and one other branch employee. He added, “You get the sign on the corner but provide convenience at a manageable cost.”

The market will most likely determine whether Coolidge Corner is an overbanked area when Chase joins the branch scrum in April. As FDIC data shows, though, deposits have almost doubled in 10 years so 10 branches within a few city blocks might just work out as long as some banks can handle having a smaller piece of the market.

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New England FDIC Insured Banks See Record Profits In 2018

N

ew England commercial banks and saving institutions insured by the Federal Deposit Insurance Corporation saw their net income grow by $1.38 billion from 2017 to 2018. That reflects a 23 percent growth in net income from year to year, according to numbers released by the FDIC. Nationally, FDIC-insured commercial banks and savings institutions reported aggregate net income of $59.1 billion in the fourth quarter of 2018, up $33.8 billion (133.4 percent) from a year ago. The improvement in net income was led by higher net operating revenue, lower income tax expenses and one-time accounting changes driven by the new tax law that forced banks to log significant losses at the end of 2017.

Peter Ostrowski, managing director of Ostrowski & Company Inc., conceded tax cuts were the biggest driver of the net income growth in 2018, but even without that, it was a good year for bank profitability with double-digit growth in net income even when the tax cut is factored out.

“Earnings were still strong aided by a strong economy,” he said in a phone interview.

Economists, Ostrowski added, are cautious about the rate of growth in 2019 with expectations it will soften.

He said concerns about trade issues and the global economy could impact New England bank income.

Also, bankers should be following factors like an increase in nonperforming assets from personal credit card debt and other indicators.

The numbers are the lowest they have 22 BANKING NEW ENGLAND

By KEITH GRIFFIN

been since before the recession, but an uptick could signal concerns.

Ostrowski said banks are currently in a good place with their strong reserve and capital positions. “Given the economy, banks should look very strong,” he added. “It should be a fairly strong year. [Banks] are positioned to weather any squalls in the economy.”

That sentiment was echoed on the national level as well. “The banking industry continued to report strong results, and the FDIC is actively monitoring economic conditions to ensure banks remain resilient,” FDIC Chairman Jelena McWilliams said at a Washington, D.C. press conference.

“The banking industry continued to report strong results,” McWilliams said. “Growth in net income was attributable to higher net operating revenue and a lower effective tax rate.

Loan balances expanded, net interest margins improved and the number of ‘problem banks’ continued to decline.

Community banks also had a strong quarter, with annual loan growth and a net interest margin that exceeded the overall industry.”

MASSACHUSETTS

At the end of 2018 Massachusetts had $4.2 billion in net income compared with $3.3 billion in 2017 for a 27 percent increase. There were 120 institutions reporting quarterly results to the FDIC at the end of 2018 in Massachusetts.

CONNECTICUT

Connecticut ended 2018 with $1.1 billion in net income compared with $866 million in 2017 for a 38 percent increase: the largest percentage increase among the New England states. Connecticut had 30 institutions reporting quarterly results to the FDIC at the end of 2018.

RHODE ISLAND

At the end of 2018, Rhode Island had $1.5 billion in net income compared with $1.4 billion in 2017 for a 2 percent increase. Eight institutions were reporting quarterly results to the FDIC at the end of 2018 in Rhode Island.

NEW HAMPSHIRE

Here is a state-by-state look at the combined net income of FDIC-insured financial institutions in New England, according to government statistics.

For 2018, New Hampshire reported $82 million in net income compared with $61 million in 2017 for a 34 percent increase. There were 82 institutions reporting quarterly results to the FDIC at the end of 2018 in New Hampshire.

MAINE

VERMONT

Maine ended 2018 with $283 million in net income compared with $209 million in 2017 for a 35 percent increase. Maine had 26 institutions reporting quarterly results to the FDIC at the end of 2018.

Vermont ended 2018 with $42 million in net income compared with $33 million in 2017 for a 27 percent increase. Vermont had 11 institutions reporting quarterly results to the FDIC at the end of 2018.

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BANKING NEW ENGLAND 23

Co-workers of Dalila Borges (Bank of America) take a selfie at the New Leaders Award presentation.

One-on-one product demonstrations were well attended throughout the show

Tom Mongellow, Connecticut Bankers Association

Nate Gravel, from GraVoc, a technologyconsulting firm located in Peabody, Mass.

Jerry Gagne of Wolf & Company, emceeing The New Leaders Awards Dinner

Thomas Villanova, Donald Mayland (Litchfield Bancorp), Rick Cantele (Salisbury Bank) at The New Leaders Awards Dinner

24 BANKING NEW ENGLAND

BankWorld exhibitors get valuable one-on-one time.

BankWorld attendees were eager to learn about new technology and digital opportunities.

BankWorld 2019 was held on Friday, January 18th at Mohegan Sun Casino and drew a record number of attendees. More than 1,400 bankers gathered for some amazing educational sessions, networking, a buzzing tradeshow floor and the New Leaders Awards Dinner at The Cabaret Theater.

The Connecticut Bankers Association and American Business Media would like to extend a huge “Thank You” to each and every attendee, speaker, exhibitor and sponsor who made BankWorld an amazing success. To see all of the photos from the event, please visit www. nebankworld.com or https://www.facebook.com/ BankWorldExpo/.

The team from COCC at their BankWorld booth

Matthew Fazo (Thomaston Bank), a New Leader in Banking recipient.

CSC exhibitors chat with bankers looking at ATM solutions

Infoshed Team’s “Got You Babe”

Tom Long (The Long Group)

James Chessen, the Executive Vice President and Chief Economist of the American Bankers Association, spoke at the invitation-only CEO/ CFO luncheon at BankWorld.

Alex Lopatine, managing director of Fintech Advantage

BANKING NEW ENGLAND 25

ANYTHING BUT BANKING

Hugh Adams

“I’ve had more fun in my life saying yes rather than no.”

Vice-President, Director of Information Technology Webster Five Cents Savings Bank Auburn, MA

By JOHN HASSAN Hugh Adams has been in banking since 1995 when he joined Florence Savings Bank as Assistant Vice-President for Information Systems.

Banking New England caught up with him for a chat about his life outside banking hours.

CAR: I live in Easthampton and work in Auburn. My 2013 gray Honda Accord and I are very familiar with the Mass Pike.

HOBBIES: Skiing is one. I have a condo at Mount Snow in Vermont and go up there often.

GOLF: Northampton Country Club. Titleist woods and Calloway Irons.

BEST VACATION STORY: I went to the Winter Olympics in Torino in 2006. Before the games started, I skied a bit in Northern Italy. I got to my slope side hotel in Pila and was looking for the local experience.

The woman who checked me in spoke only broken English in response to my broken Italian. What could go wrong?

She told me the big event my first night was snow machining, supper, and “bin bagging”. Why not? At dinner time, a group of us climbed aboard a big snow mobile that took us to a mid-mountain restaurant. We had a lovely meal that was capped off with a big bowl of a chocolate liqueur, passed around the table a few times. So, in good shape, it was time to go home. I figured out that the tradition was a race back to the hotel. Then the waiter handed me a trash bag which would be my mode of transport. I thought about how I would do it and eventually decided to wear the bin bag like a diaper.

I slid down the mountain and spilled into the courtyard of the hotel. Victorious! After a toast of schnapps with my fellow sliders, I went off to bed full and happy.

SPORTS: New England Patriots.

Deflategate? Fake news.

ADVICE: Among other duties, I manage a help desk at work. Things can get stressful. When a customer is not handling something well, I tell my colleagues to try to see the issue from the caller’s point of view. Try to help them solve it. They’re not yelling at you. They’re upset about the situation. You can lead them to a better place with expertise and patience. Works in everyday life as well.

MUSIC: Stevie Ray Vaughn, classic rock and blues. And I’ll probably see Jimmy Buffet at the Xfinity Center in Mansfield, Massachusetts in August.

MOTTO: I’ve had more fun in my life saying yes rather than no.

26 BANKING NEW ENGLAND

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BANKING NEW ENGLAND 27

DID YOU SEE?

Banking New England publishes a weekly digital newsletter that rounds up the latest news and information about, you guessed it, banking in New England. Here are a few stories from recent editions of that newsletter. If you would like to subscribe to or advertise in the Banking New England newsletter, contact us at info@ambizmedia.com.

WESTERN MASS. BANK EXPANDS BY SHRINKING BRANCHES

Florence Bank is laying out the blueprint for expansion by literally shrinking the size of one of its branches.

“You need that presence,” said John F. Heaps Jr., president and CEO of Florence Bank, as he showed off the new branch at 1444 Allen St. in Springfield’s Sixteen Acres neighborhood. “If we are going to grow organically, then we John F. Heaps Jr. need to have these offices.”

The branch, which opened in December, is highly visible and a great complement to Florence Bank’s growth and helps it build business deposits, Heap added. It has just two teller stations staffed by employees who can do more customer service functions, like open new accounts, than a traditional teller.

Branch managers and assistant managers can originate mortgages and business loans. Staffers at Florence Bank locations can also demonstrate technology, Heaps said. “Our branch layout is conducive to consultations.

Smaller footprint is working as expected.”

ABINGTON AND PILGRIM BANKS MERGE

Abington Bank and Pilgrim Bank have agreed to merge to create a $600 million community bank with six offices serving Eastern Massachusetts. Abington Bank CEO Andrew Raczka will lead the combined entity.

Recently, Hometown Financial Group closed the acquisition of the Pilgrim Bank. Following the completion of the latest combination, Hometown Financial Group will have consolidated assets of $2.7 billion with 30 branches across Massachusetts and Northeastern Connecticut.

The combined Abington Bank-Pilgrim Bank entity will operate as an independent subsidiary of the group with its headquarters in Abington. The deal is expected to close in the second quarter of this year.

28 BANKING NEW ENGLAND

MERGER CREATES TOP 10 CREDIT UNION IN STATE

The merger of Merrimack Valley and Bridgewater credit unions has created one of the 10 largest credit unions in Massachusetts with $1 billion in assets.

The combined organization will be called Merrimack Valley Credit Union, with Bridgewater Credit Union operating under its own name as a division of Merrimack Valley. Bridgewater will eliminate or reduce more than half of its fees to match Merrimack Valley.

John J. Howard will be president and CEO. He succeeds Peter Matthews, who will be an adviser until his retirement on March 31.

MASSACHUSETTS CU FIRST TO OFFER MARIJUANA BANKING SERVICES IN THE REGION

GFA Federal Credit Union is offering banking services to businesses in the recreational marijuana industry. When GFA Federal Credit Union studied the Colorado recreational marijuana industry, the Gardner institution didn’t see a market a bank would easily choose to get involved with.

But GFA saw opportunity Tina Sbrega in the mayhem of a fledgling marijuana industry that, without proper banking services, included people stuffing backpacks full of cash they couldn’t deposit.

Thanks in part to GFA, that’s less likely to happen in Massachusetts. The Gardner credit union is the first in Massachusetts to serve the state’s recreational marijuana industry, putting the small institution at the forefront of a market already with $24 million in sales since the first pot shops opened on Nov. 20.

“Certainly we didn’t wake up one way and say ‘We’re going to do it,’” said Tina Sbrega, CEO and president of GFA. “We did our due diligence for 18 months.”

TALKING BANKING

A regular roundup of quotations, old and new, from and about the world of finance.

SPREAD THE WEALTH

In a talk on January 30, 2019, Federal Reserve Chairman Jerome H. Powell acknowledged that the United States’ economy is strong but also noted that income inequality and a decline in mobility, the opportunity for people to move up in economic class, are of concern.

WHAT DID YOU SAY, GARY?

Gary Vaynerchuk is the chairman of VaynerX, a media and communications “We want prosperity to be widely shared,” said Powell. holding company, “We need policies to make that happen.” He later noted and the CEO that “The U.S. now lags in mobility. And that’s not our of VaynerMedia, self-image as a country nor is it where we want to be.” an advertising agency. He is a sought-after speaker and recently hosted an event in Miami called “Agent ITTY BITTY BITCOIN 2021” aimed at helping In recent years, mortgage and real estate JP Morgan Chase professionals. The THE PERSONAL TOUCH CEO Jamie Dimon following remarks, “The dollar bills the customer gets has spoken made after that from the tellers in four banks are harshly about conference, are cryptocurrencies, the same. What is different is the from the Cannonball going so far as to tellers.”

Mindset podcast from tell Bloomberg in – Stanley Marcus February 2, 2019.

August 2018 that Bitcoin is a “scam” “I do not think the American that he had “no interest” in. He also dream should be buying a “suggested governments may move home anymore. It’s a bad use to shut down the currencies because of upfront capital, and it ties of an inability to control them.” He you up and it’s just not smart. softened his stance over time and …it’s 2019. Why do you need regretted calling Bitcoin a “fraud” in to own a home? To leave it to 2017. Finally, in the July/August 2018 your kids? They can rent too… issue of the Harvard Business Review I think the whole thing is going Dimon said “I probably shouldn’t say to go. In the next 50 years, it any more about cryptocurrency.” takes time to rebrand.”

Of course, everyone can let their opinions evolve on any topic as more information comes in. So, it was noted with great interest when CNBC reported in February 2019 that JP Morgan would be the first U.S. bank to test a digital currency, JPM Coin, to be used for payments between large institutions using blockchain, a technology Dimon/JPMorgan has consistently said they see as having strong potential.

BANKING NEW ENGLAND 29

A BANKING NEW ENGLAND FEATURE SPONSORED BY

KAREN MARRYAT BLUE HILLS BANK, NORWOOD, MA

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ockland Trust Company acquired Blue Hills Bank at the end of 2018.

Before that, Karen Marryat, Senior Vice President and Chief Marketing Officer at Blue Hills Bank, worked on one of the most comprehensive and successful bank rebranding campaigns in recent New England history. Banking New England caught up with her and made her brag about it.

Banking New England: What challenges did Hyde Park Savings Bank face in 2010?

Karen Marryat: Hyde Park Savings Bank had a narrow business model. The bank had a lot of CD customers with few core banking relationships. There was little community investment.

There was no commercial or small business lending and very little residential mortgage lending – the bank typically invested in the equity market.

After the market shakeout of 2008-09, the board of directors wanted to go in a different direction. They hired a new CEO, Bill Parent, and it was his mission to grow the bank, expand the business model, and become a player in the community banking space. Bill hired me in late 2010.

BNE: How did you begin this process?

Karen: The bank had market research showing that Hyde Park Savings had low brand awareness in the market and what people knew about the bank they didn’t like. The brand had been damaged by a lack of investment in people, technology, branches, and the community. The name was limiting because it only reflected a small neighborhood in Boston. Hyde Park Savings Bank didn’t indicate the geography we were serving back then or what we aspired to serve. We knew we had to change the bank’s name in order to grow.

BNE: How did you choose “Blue Hills Bank”?

Karen: Blue Hills is the highest point in Norfolk county, and we were located all around that area. Also, in the Algonquian language, Massachusetts translates as “great blue hill.” The name was well known in the area we served and hoped to serve, and we thought it could carry us across the state.

BNE: What else did you change?

Karen: We introduced the new name in November of 2011. By then we had rebuilt our Hyde Park branch on Truman Highway, remodeled the interiors of all our existing branches, upgraded our online banking platform, launched a new website, introduced 30 BANKING NEW ENGLAND

MARKETING INSIGHTS FOR FINANCIAL INSTITUTIONS a cash management platform, and launched commercial banking. We also introduced a charitable foundation. The new name was really about these new capabilities.

BNE: Why did you acquire naming rights to the Pavilion?

Karen: We replaced a name that few people knew with a name that absolutely no one knew. Our sales staff was hearing “Blue Hills what?” We needed to get the name out there in a big way if we were going to realize Bill’s vision. We saw that the rights were available. I was joking with my marketing colleague Ashley Joyner that we should go after it. Bill Parent was walking by and suggested we pursue it. I called LiveNation and they worked with us to make it happen. We were able to get our name on several million dollars’ worth of local advertising and promotion for the concerts. Our business development people quickly noticed that awareness of our name was growing, and we could get relationships started more easily.

BNE: What were the results?

Karen: Over the last 8 years, we tripled in asset size. The Commercial team built a billion-dollar loan portfolio from essentially nothing. The Residential Lending team expanded significantly, building an origination capability of about $500 million a year and a loan portfolio of about a billion dollars. We changed the composition of our customer base so that we had fewer single service and more full-service customers. We also put $7 million in grants and sponsorships into our community.

The rebrand was from the inside out and involved every business line at the bank.

By the time the new name was announced (above), Blue Hills branches had already been remodeled (below).

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