Banking New England Nov/Dec 2015

NOV/DEC 2015

140 YEARS OF COMMITMENT TO COMMUNITY BANKING AT SAVINGS BANK OF WALPOLE

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

at

Bank Card Insecurity

PLUS:

WHAT EVERY BANKER SHOULD KNOW ABOUT IT CFPB TAKES AIM AT ARBITRATION INSIDE THE BUSINESS VALUATION PROCESS A PUB LICAT IO N O F TH E WA R RE N G R O U P

Our guts.

Your glory.

We’re better together.

It’s tough to compete out there. Constant challenges —regulatory, technology and changing consumer attitudes—force your institution to rethink the way you manage your clients’ wealth. We are the proven partner to provide the products, processes and people you need to succeed. Your team collaborating with the only firm focused on financial institutions for over 30 years—that’s the power of a real partnership.

Let’s get started at ceterafinancialinstitutions.com or call 800.245.0467, ext. 65014.

Cetera Financial Institutions is a marketing name of Cetera Investment Services LLC, member FINRA/SIPC. 400 First Street South, Suite 300 – St. Cloud, MN 56301.

© 2015 Cetera Financial Institutions 08/15

A P U B L I C AT I O N O F T H E WAR R EN G R O U P

CONTENTS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

04

08

GIVING BACK

Androscoggin Bank Begins Greater Giving

ASSET MANAGEMENT

Banks’ Retail Investment Departments Trend Toward Fee-Based Models

10

What Every Banker Should Know about IT

12

16

RISK PREVENTION

PROCEDURE OVERVIEW

Inside the Business Valuation Process: A Primer for Commercial Lenders

16 COVER

Chipping Away at Bank Card Insecurity 20

BANK PROFILE

140 Years of Commitment to Community Banking at Savings Bank of Walpole

22

INDUSTRY NEWS

24

CFPB Takes Aim at Arbitration

26

PERSONNEL FILE

28

COMMUNITY GOOD WORKS

PROPOSING CHANGE

Chipping Away Bank Card at

Insecurity TWG STAFF CEO & PUBLISHER Timothy M. Warren Jr. PRESIDENT David B. Lovins EDITORIAL EDITORIAL DIRECTOR Cassidy Murphy ASSOCIATE EDITORS Joe Kourieh and Malea Ritz

www.thewarrengroup.com ©2015 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. 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: The Warren Group, 280 Summer Street, Boston, MA 02210

30

IN CASE YOU MISSED IT

Interested in receiving additional copies of Banking New England?

Call 617-896-5357 or email custompubs@thewarrengroup.com

SALES DIRECTOR OF BUSINESS MEDIA George Chateauneuf PUBLISHING GROUP SALES MANAGER Dave Janoff ADVERTISING ACCOUNT MANAGERS Claire Merritt,

Bob Holzhacker and

Michael Lydon ADVERTISING & SALES COORDINATOR Jennifer Burke CREATIVE/MARKETING DIRECTOR OF MARKETING & CREATIVE SERVICES John Bottini PUBLIC RELATIONS & SOCIAL MEDIA MANAGER Ian Murphy MARKETING COPYWRITER Mike Breed DESIGN PRODUCTION MANAGER Scott Ellison GRAPHIC DESIGNERS Amanda Martocchio, Tom Agostino

and Tyler Grazio

GIVING BACK

Androscoggin Bank Begins Greater Giving New Donation Program Targets Education, Economic Development and the Arts

More than 20 Androscoggin Bank employees and family members participated at the Run for Independence, the main fundraiser for Independence Association in Brunswick, Maine.

BY ANNA SIMS

4

BANKING NEW ENGLAND

M

aine-based Androscoggin Bank in September began its new Greater Giving community impact program by awarding more than $7,000 to four local organizations benefiting their communities.

Though the first Greater Giving grants were awarded this fall, the story of the new giving platform began years ago during the bank’s rebranding initiative, said Melissa Rock, vice president and director of Paul Andersen marketing and client relations.

“Three or four years ago, the bank was ready to embark on a rebranding initiative. …

So we came up with five brand attributes that we really thought differentiated us [from other banks] – engaged, adaptable, Melissa Rock responsive, results driven and smart,” Rock said. “That led to what ended up being our tagline and our brand, which is ‘Androscoggin Smarter Banking.’ But a brand is not a marketing initiative; it needs to be in everything the bank does. A huge piece of that is our giving strategy.”

The Greater Giving program will award up to $20,000 each year, distributed in two $10,000

giving cycles, to organizations that support education, economic development and arts and cultural initiatives.

In its inaugural round of grants, Greater Giving awarded funds to four organizations, including $2,200 to A Company of Girls, which funds an afterschool arts program for low-income girls experiencing emotional or social issues, and another $2,200 to Community Concepts Finance Corp.’s Financial Capability project, which provides one-on-one money management support within Androscoggin, Franklin and Oxford counties.

Reaching the Community

Greater Giving emerged from an idea from Vice President and Commercial Loan Officer Tina Willard. “Each year we have special projects we want to get done as part of our [Accelerated Career Enhancement] program,” said Androscoggin Bank president and CEO Paul Andersen. “One project we had was, ‘How can we tie bank giving to our new brand?’ [Willard] was in the program and was assigned the bank project, and she worked hard, researched, interviewed people internally and externally and came up with Greater Giving.”

CONTINUED ON PAGE 6

GIVING BACK

CONTINUED FROM PAGE 4

educational attainment, generally, than there is in rest of New England – particularly in western and rural Maine,” Andersen said.

“We know there’s a correlation between educational attainment and the salary income that a person can earn over their lifetime. So, we believe strongly that investing in education can help lead to better lives for people. It can create more economic development, more growth and more jobs.”

The Gifts of Giving Ray Nagel, executive director of the Independence Association (IA) and artist Emma Becker present a one-of-a-kind painting to Paul Andersen, CEO and president of Androscoggin Bank (AB), for permanent display in the bank’s Brunswick location. Independence Association and Androscoggin Bank employees look on. From left: Debbie Dionne (IA), Liz McGhee (IA), Brian Braley (IA), Ray Nagel (IA), David Cowing (IA), Paul Andersen (AB), Emma Becker (IA/Artist), Kelly Dorsey (AB), Diane Field (AB), Melissa Runstrom (AB) and Julie Buffington (AB). Photos courtesy of Androscoggin Bank.

Prior to establishing Greater Giving, Androscoggin Bank had been supporting its community through its Main Street Foundation and other giving channels, but the Greater Giving initiative is different from these other programs. One new aspect of the program is its emphasis on employee involvement. As part of Greater Giving, all bank employees receive four hours of paid time off each quarter to volunteer at nonprofits.

Greater Giving is also extremely targeted in its focus, exclusively distributing funds to organizations that support education, economic development and arts and culture. “Before the rebrand, we gave a lot, but there wasn’t necessarily a theme. It was all over the place. No one knew how to prioritize,” Rock said. “We are a bank, but we also have limited resources. We really wanted to narrow our giving activities to those three giving categories because we really want to make a true community impact.” The bank spent a year deciding which initiatives to support to ensure it chose the causes that would do the most to better the community.

The decision to select education as one of the initiatives was particularly personal to area. “In Maine, there is a lower level of

rePRINTS You can order a professional reprint of any article in the BANKING NEW ENGLAND.

To learn more about rePRINTS: bit.ly/BankingNE

6

BANKING NEW ENGLAND

The bank continues to fund important causes and organizations outside of these three giving categories. Since 1998, Androscoggin Bank has awarded $850,000 to nonprofits supporting at-risk youth through its Main Street Foundation. The bank is also committed to be the three-year sponsor of the Run for Independence, an annual race put on by the Independence Association, which provides support to developmentally challenged adults to help them live independent lives.

Androscoggin Bank completed its first year of sponsorship in May. “I set my personal best time at the race. It was not impressive,” Andersen said with a laugh. But he was not the only one to have a good day at the race.

“Androscoggin Bank had more than 30 [employees and employee family members] participate in the run. The race raised more than doubled the money for the Independence Association than it had the previous year,” Andersen said. “The Independence Association was so pleased, they had a client present us with a painting they had made, which is hanging our in Brunswick branch. It was really nice meeting some of the people who we had helped.”

It’s these moments that make the bank want to continue giving back, and which are the driving force behind the creation of Greater Giving. On top of that, it just makes good business sense, Andersen explained.

“In client satisfaction surveys, one thing we’re always told by all of our constituencies is that the fact that we do give back to the community attracts people to do business with bank,” Andersen said.

Rock agreed: “We know that it’s really important to our business to make these kinds of choices and get out in our community. … It really does make sense for us on all cylinders.” BNE

Information Security The loss or compromise of sensitive data can have a devastating effect on your institution’s operation and reputation. Our Information Security Practice was built to help you identify and mitigate risks to your company’s data and infrastructure.

Services Risk Management & Compliance Risk Assessment Digital Forensics & Incident Response Disaster Recovery

IT Assurance

Penetration Testing Vulnerability Assessment Social Engineering

IT Audit

Compliance Gap Analysis IT General Controls

One Company, Many Solutions Business Solutions

Information Technology

(978)-538-9055 | 81 Main Street | Peabody, MA | gravoc.com

Information Security

Media Production

PROTECTING ASSET MANAGEMENT VULNERABLE CLIENTS

Banks’ Retail Investment Departments Trend Toward Fee-Based Models

BY MYLES DUDLEY

Myles Dudley is a managing partner at Pinnacle Private Wealth, with offices in Woburn, Needham and Leominster, Massachusetts. He can be reached at mdudley@ pinnacleprivatewealth.com.

T

he banking industry continues to evolve and, so, too, does its role and relationship with the investment industry.

In some ways the banking world mirrors current activity in the larger investment community; specifically, a trend toward fee-based asset management as opposed to products that pay out a commission to the adviser making the sale.

This movement can be traced to the generally conservative nature of banking – an industry not opposed to embracing changes, so long as the risk is minimal. This trend can also be attributed to the fact that investments are a part of, but not the entire share of, a bank’s overall business. Another factor in the move toward a fee-based model is the end result of associated pending legislation, such as the Department of Labor’s Fiduciary Rule Proposal, which may have the greatest impact on the direction in which the investment sector of the banking industry takes.

For those who have worked in a retail bank’s investment arm, it’s easy to understand the natural progression of the banking industry into the investment world. If managed properly, investment products can offer banking customers 8

BANKING NEW ENGLAND

more options and potentially higher rates of return than can traditional accounts. Similarly, loyal bank customers are more likely, out of a sense of loyalty and trust, to give a bank the opportunity to manage its investments.

That said, historically the banking industry has offered a limited menu of products – mutual funds, fixed and variable annuities, along with insurance products. But the banking industry’s foot in the door of investment sales has increased significantly as institutional transactions have become more commonplace; i.e. the acquisition of Merrill Lynch by Bank of America. Managers at various banks have strongly encouraged their advisors to focus on fee-based asset management to diversify their product mix within their books for business.

Arguably, both commission-based products and fee-based asset management have their advantages, but the fee-based model seems to be where the industry is heading and investment programs within the banks have been following suit.

Unquestionably, some banks have suffered negative publicity after over zealously promoting commissioned products. There have been some well-publicized black eyes on the “commission-

based” tactic – for instance the probe into sales of variable annuities to elderly clients.

The argument that the regulators make is that a commissionable product sale does not always work to the customer’s best interest, which may be the case in some instances.

It should be underscored that many advisors who sell commissionable products do so from a position of absolute strong integrity. Yet, issues that the banking industry has faced, coupled with publicity from various investigations, has done little to increase the appetite of the banking industry to promote commission-based products. In the most general terms, the rationale for the fee-based asset management model is that the advisor is product-neutral and can provide more unbiased or transparent investment advice rather than be seen as “pushing” a particular product for which he or she is compensated.

It’s worth noting that investments have never been the mainstay of bank business; this can be attributed to an intrinsic culture that seeks to avoid liability.

Since investment products are not the core competence of banks, fee-based asset management can reduce some of the liabilities that banks have taken on from investigations into what is in the best interest of the client.

Furthermore, new Department of Labor legislation presently under consideration seems to push harder for the fee model over the commission model, suggesting that commission-based products do not necessarily benefit the end user. For years, the political progressives have raised concerns that the same financial advisers and investment dealers who help Americans with their IRAs and 401(k)s are also pocketing commissions while making sales that aren’t in the best interests of their clients. Many in the business community challenge that assertion saying that the industry is rooted in trust and organized to allow for lowincome Americans to receive the same financial advice as the wealthy.

Supporters of tougher regulations, including AARP and most progressive financial groups, maintain that consumers aren’t aware of the commissions their advisers earn when securing their enrollment in retirement plans that could be risky. Industry groups have vehemently pushed back against such proposals, contending that the regulations would end up hurting the same lower-income Americans the administration wants to help. The argument here is that the new regulations would change the payment model from commission-based to one that relies more on a fee-based, thereby lowering the financial incentive for broker-dealers to take on lower-income accounts.

The jury’s verdict, as they say, may not be in yet, but considering the traditionally conservative stance inherent to the banking industry, it seems a safe bet that the industry trend will continue toward the fee-based asset management service model. BNE

Assisting Community Banks in

Charting a Path to Success Since 1989

Consulting Services Implemented by Experienced Lenders and Risk Managers: LOAN REVIEW PROGRAMS • General Loan Review • Portfolio Acquisition Review (Due Diligence) • Specialty/Structured Finance Review

LOAN LOSS RESERVE METHODOLOGY • Methodology Validation • Methodology Refinement

LOAN PORTFOLIO STRESS TESTING

• Bottom Up Loan Level Approach • Top Down Capital Adequacy Assessment

CEIS REVIEW CONSULTING • Credit Risk Process Review • Loan Policy Maintenance • Loan and Credit Seminars

888-967-7380 • www.ceisreview.com BANKING NEW ENGLAND

9

PROTECTING RISK PREVENTION VULNERABLE CLIENTS

What Every Banker Should Know about IT

BY AL ALPER

Al Alper is the CEO and

founder of Absolute Logic, a technical support and technology consulting provider to businesses of up to 250 employees. He can be contacted at al.alper@ absolutelogic.com or (203) 936-6680.

Al Alper

N

ot that long ago, the risks a bank or other financial institution faced were much simpler than they are today. The biggest threat might have been the stereotypical bank robber, who would either quietly pass a note with demands to an unsuspecting teller, or who might come in wearing a ski mask, carrying a weapon and working with partners. While neither scenario was desirable, and certainly unsafe for bank employees and customers, the worst a bank would typically lose was cash – general cash that was not necessarily assigned to any specific accounts.

Now, the banking industry faces a myriad of new risks on top of this now old-fashioned approach. Data theft can not only allow hackers to get into the bank’s holdings, but could also connect them to the other holdings of each client, as well as other affiliated institutions.

This type of theft, unlike the scenarios described in the first paragraph, could have profound negative impact on individual bank clients in addition to the bank as a whole.

Bankers, and others working within the banking industry, must understand certain facets of information technology in order to keep their institutions, and their clients, 10 BANKING NEW ENGLAND

safeguarded. Specifically, IT compliance issues (both transactional and information) and potential security threats are two areas critical to be met and recognized.

“Transactional compliance” refers to the internal and external financial transactions of an institution. In order to be sure that transactional compliance needs are met, all discourse must be transparent to the chief compliance officer (CCO) and/or their delegates.

“Information compliance” refers to any kind of internal or external communication by the bank. Like transactional compliance, all discourse must be transparent to the CCO and/ or their delegates.

With both transactional compliance and information compliance, those in the banking industry must remember that all of these transactions or communications must be fully documented, archived and accessible to fulfill both audit and compliance requirements.

Security threats are a constant concern in the IT arena, and although almost any business is at risk, some – especially those that collect valuable personal information, like Social Security numbers, bank account and credit

card numbers – are at a much higher risk than others. Financial institutions face security threats directed at both systems and services.

Systems that capture and retain transactional compliance and information compliance must be checked and audited regularly for performance and adherence to standards and protocols. Information systems that banking institutions put in place typically include intrusion detection and prevention, as well as endpoint protection from malware and viruses that steal data and/or log keystrokes, which gives unauthorized individuals access, leaving the system vulnerable and information exposed as malicious thieves use that system as a launching pad for widespread internal access. In addition, third-party vendors that intersect with protected data and third-party applications that intersect with protected data offer potentially subtle access to would-be hackers. Ensuring secure, encrypted access systems for remote and extranet connectivity and encrypted systems that keep data encrypted both at rest and in transit are critical to keeping security threats in check.

Finding A True Partner

Given the high stakes involved in compliance issues and security threats within the banking industry, it makes sense that banks work with an information technology managed services provider (MSP). Selecting the best MSP for a bank is crucial; looking out for certain characteristics of the right MSP can help narrow the selection.

First and foremost, a bank or other financial institution must find an MSP that will work to be a true partner with the organization. This type of philosophy ensures that the MSP is always working in the best interest of the financial institution, understanding that the success of the bank is closely tied to the success of the MSP. In this vein, a bank should expect that its MSP will help

keep the bank up-to-date on compliance changes, and also help the financial institution understand how these changes might affect the technology in place.

In addition, a good MSP should offer its financial client full transparency. This includes easy access to inventories of the bank’s assets, daily tickets and warranties, as well as knowing what information is at risk and what is exposed. Information about how employees are using the technology (including what content is being trafficked on the network or on Wi-Fi), should also be readily available.

Finally, a partnership with an MSP should also encompass business continuity commitments. To achieve this, an MSP should offer an onboarding audit, going over all of the technology components of the financial institution

(regardless of whether those components are being provided by the MSP). This audit should result in a disaster readiness profile, along with recommendations of what might be needed to strengthen the institution in the face of disaster, however the disaster manifests itself.

Technology has inarguably made banking easier, more efficient, and more user-friendly. To make the most out of what technological advances offer to banks, those in the banking industry must have a firm handle on both the compliance issues involved as well as the possible security threats lurking.

Understanding this, and knowing how an information technology managed services provider can help meet these challenges, offers the best outcomes for everyone – except the robbers. BNE

Plan for and Prepare Your Bank’s Future Leaders As your current senior executives plan to retire, now is the time to identify your next generation of leaders with the new guide, Succession Planning for Banks.

Prepare those future leaders for success with the ABA Stonier Graduate School of Banking. With a prestigious faculty and its partnership with the Wharton School, Stonier is an unparalleled executive education program.

140 aba.com/talentmgmt-bne

years

American Bankers Association

BANKING NEW ENGLAND

11

PROCEDURE OVERVIEW

Inside the Business Valuation Process: A Primer for Commercial Lenders

BY DAN DORAN

Dan Doran, CVA, is principal of Quantive Business Valuations, a professional business valuation practice specializing in small to medium-sized closely held and family owned businesses.

Dan Doran

I

n the end, it all comes down to the bottom line.

“Value,” like beauty, is subjective – what the business is worth to the owner may not be what it is worth to the market. But if a business is to be sold, its value must be objectively determined – a sticking point for the lenders involved in the transaction.

In all buy-sell transactions, valuation is the proximate issue: just how much is the business worth? From a seller’s perspective, one way to find out is to let the market speak by soliciting offers.

From the buyer’s perspective, past experience might be one method to understand value, or perhaps quantifying what one can afford in terms of cash out of pocket and monthly loan payment is another.

Both of these methods tend to be imprecise.

And while they may satisfy the parties – and lenders – in some smaller deals, when it comes to Small Business Administration lending, the SBA’s standard operating procedure requires that when goodwill exceeds $250,000, an independent, third-party valuation is required.

Typically lending teams within larger financial institutions are more accustomed to the valuation process and requirements. However, for a large segment of community and mid-size banks, the valuation process and related requirements may be more of an enigma where SBA loan volume is lower.

12 BANKING NEW ENGLAND

This short tutorial provides lenders with guidance on who should perform a valuation for their client, how the lender can help with selecting a valuation professional and an overview of the factors a valuation analyst will consider.

Who Can Perform the Valuation?

The SBA requires that the valuation be performed by someone who routinely performs business valuations. While this makes sense at first blush, it also segues into a recent change: CPAs are not qualified to perform business valuations in the absence of an accompanying valuation credential.

Many jump to the conclusion that business valuation is a core component of CPA work. It’s not. While there are CPAs who also perform valuation work, the CPA credential on its own does not indicate that a practitioner routinely performs valuation work.

The SBA does recognize several credentials that are acceptable for third-party valuation firms. Those include: • CVA, a credential from the National Association of Certified Valuators and Analysts.

• ASA, from the American Society of Appraisers.

• ABV, Accredited in Business Valuation, CONTINUED ON PAGE 14

Strengthen Your Core

Integrated Technology for the Heart of Your Institution Maintaining your health starts by strengthening your core. Maintaining the financial and operational health of your financial institution is no different. A strong and flexible core should be at the heart of your institution.

At COCC, we deliver the latest in relational core technology. The COCC INSIGHT platform provides our clients with strength at the core while integrating the best-of-breed in ancillary products. Our powerful core platform ensures that we can develop, integrate and deliver capabilities that you need, when you need them.

Through our unique cooperative structure, clients have a strong voice in determining the future of the technology at the core. The trust we have developed in this partnership structure is the foundation of COCC and we measure that commitment each quarter by client report cards and surveys.

With COCC, each client receives:

• The highest ratio of customer service staff to financial institutions

• The most ambitious visitation, training and education in the industry

• A mutual ownership structure that ensures our focus remains on our clients

• A voice in determining your future core technologies Exercise your right to learn how COCC can strengthen your core. Call us today at 888.678.0444 or visit our website at www.cocc.com

100 Executive Boulevard, Southington, CT | www.cocc.com | 888.678.0444

PROCEDURE OVERVIEW

CONTINUED FROM PAGE 12

awarded to CPAs by the American Institute of Certified Public Accountants.

• CBA, Certified Business Appraiser, from The Institute of Business Appraisers Inc.

What Should Lenders Consider When Selecting a Firm?

When selecting a firm to perform a third-party business valuation it’s important to consider the experience of the appraiser or appraisal firm. Items to look for include: • Industry experience: Does the appraiser have experience working in the given industry?

• Valuation specialization: Does the appraiser routinely perform valuation work? Or merely hold a valid credential but rarely perform actual valuations?

• Capacity: How long will it take to complete the project? We all know the old saying, “time kills deals.” Ideally the appraiser has capacity to turn the project around in a reasonable time – typically one to three weeks.

What Will an Analyst Consider?

Each valuation is slightly different, but the valuator will consider three approaches: the market approach, the income approach and the asset approach. Each of these approaches considers the company in a different light, allowing the appraiser to take a deep look at the business.

For SBA loan valuations, the asset approach is usually considered, but not relied upon. The asset approach essentially looks at the book value of the company, perhaps making adjustments for assets and liabilities that may not transfer to the buyer. In most common applications of the asset approach there is no goodwill. Given that the SBA requirement is predicated on goodwill, it stands to reason that the asset approach is infrequently relied upon.

The market approach seeks to compare the subject company to other similar companies in the market. This approach – often comparing the subject company’s earnings, gross profit or revenues to other, similar companies – can provide great insights into how the market has priced similar businesses. The downside is the

Improve Performance CustomerLab® Identifies product opportunity, target segment and geographic focus NextProductLab™ New Launches multi-platform cross-sales StaffingLab® Assesses productivity and identifies financial impact MarketLab® Evaluates total demand and competitive landscape BranchLab® Defines demand, penetration and financial impact

National Marketing Award Winner

LocationLab® Defines means of market entry ProfitLab® Defines product profitability to prioritize business interests PerceptionLab® Evaluates Brand Performance PlanningLab® Positions your brand for enduring strategic success

603.424.5664 • www.longgrouponline.com 22 Greeley Street • Suite 2 Medallion Center • Merrimack, NH 03054 14 BANKING NEW ENGLAND

availability of data. Companies that fit within the SBA program are invariably not public, and data can be sparse and misleading. If the business type is common – such as day cares, gas stations or insurance agencies – market data may be robust. But finding data for less common businesses is more challenging.

The income approach seeks to develop a discount rate – essentially a risk profile – for the subject company. The advantage in doing so is that the appraiser can directly tune the calculation for the subject company. The analyst will look at the earnings stream of the company and apply the discount rate in order to develop the overall value.

While not required to rely on all of those approaches, by reviewing each the analyst is able to best triangulate fair market value. A good analyst will be able to select the best approach and model for the subject company to develop a fair market value.

Are There Common Pitfalls to Avoid?

Perhaps the most common pitfall in valuing businesses in concert with SBA lending is understanding which assets and liabilities are conveying to the purchaser. (This also happens to be an area that can derail deals when buyers and sellers do not clearly convey expectations.)

For example: is the seller retaining accounts receivable and accounts payable? Or is the buyer purchasing? How about real estate rental deposits? Or prepaid expenses? Accrued vacation?

Identifying which assets and liabilities will be part of the “NewCo” balance sheet early will help both the analyst properly prepare a valuation, as well as ensure buyer and seller are on the same sheet of music at closing time.

Where Can Lenders Go for More Information on Valuations?

The SBA SOP 50-10 5(b) recently added more extensive business valuation requirements to ensure that lenders are utilizing qualified and compliant valuation analysts. Lenders may also consult the websites of The National Association of Certified Valuators and Analysts and the American Society of Appraisers for more indepth information on the valuation process, such as IRS Business Valuation Guidelines and an International Glossary of Business Valuation Terms. BNE

They’ve always been the quietest.

Now they’re the smartest.

The quietest self-service coin machines are now driven by our new Version 5 Software.

USER FRIENDLY

Intuitive 7” touch screen display enhances balancing, bag removal and reporting functionality

CUSTOMIZABLE BRANDING

Add your logo onscreen and to receipt headers and footers

ACCURATE

Advanced alloy count sensor detects coins by 16 different parameters.

Contact a Magee Consultant Today 800-347-1414 ext. 336 · tconklin@mageecompany.com · www.selfservicecoin.com © 2015 Magner Corporation of America. All rights reserved.

LIMITED TIME OFFER

Introductory Rebate

COVER

Chipping Away Bank Card at the

Insecurity

By Christina P. O’Neill Christopher D’Elia uses his debit card every day, but during the normal course of his retail errands and transactions as of early November, he said, there wasn’t a chip reader terminal in sight.

D’Elia is president of the Vermont Bankers Association, so this is something he would notice.

Large banks, and many smaller ones, have already issued chip-bearing debit and credit cards to their customers through the adoption of EMV (EuropayMasterCard-Visa) chip technology. But D’Elia said that retailers in Vermont – both chain retailers and small local businesses – seem to be slow to adopt.

The post-recession pressure on bank margins, regulatory pressure to lower bank fees and the big retail breaches of the last three years have caused the banking industry to step up the push for more secure payment technology on the part of merchants, fueling the contretemps between card-issuers and retailers.

The cost of fraud, including card reissuance, has historically been borne by card-issuing banks. As of Oct. 1, the two biggest card networks, Visa and MasterCard, shifted point of sale liability for the cost of debit and credit card fraud onto whichever party in a transaction chain – merchant or card issuer – has the least EMV-compliant technology.

Merchants must either install chip-card readers or face increased fraud liability if a chip card is used in a non-chip reader. However, if the merchant has upgraded and the customer still carries a card that is mag-strip only, the card-issuing bank will still be liable.

Retailers say that to provide optimum security, EMV technology should include the added use of a PIN, as is common throughout Europe. Retailers contend that the liability shift is unfair because the chip reduces banks’ exposure to fraud while the lack of a PIN increases retailers’ fraud risk.

In testimony before the Congressional Committee on Small Business on Oct. 21, Washington, D.C. gift shop owner and National Retail Federation board member Keith Lipert alleged that small business owners are being forced by card companies to adopt “a flawed card system.”

He contested that the Oct. 1 deadline was arbitrary, adding, “No one from my bank processor or existing supplier even contacted me about the need to add a new EMV device, let alone a deadline by which to do so.”

The American Bankers Association, testifying before the Congressional Committee two weeks prior to Lipert’s testimony, said that the Oct. 1 date was “not a government mandate, nor a deadline, but rather a private sector joint effort – banks, networks

and merchants – to enhance payment security for all our customers.” The ABA said the benefit of advanced chip technology can only be utilized if merchants adopt chip-card readers – and it said the adoption would be a gradual process.

Calling All Parties

“Every entity involved in the payment system needs to be a part of the solution,” D’Elia said in an email. “Banks, card issuers, payment processors have done a tremendous job in securing their systems in an effort to protect the card holder. Unfortunately, nothing is 100 percent foolproof, because the criminals are very creative and tech-savvy.”

That savvy is increasingly moving away from card counterfeiting to other subterfuge. D’Elia said his debit card was compromised early in 2015 when criminals used data from an ACH transaction to withdraw $900 from his account. “You have to look at each data breach and determine the information that was captured,” he said.

For example, if a merchant conducts card transactions using wireless technology, a criminal with the right equipment could capture the data from a vantage point in the retailer’s parking lot. “What have they done to secure that communication?” D’Elia asked. Merchants who use the same computer system to conduct card transactions, that employees use to surf the net, go on Facebook or reply to emails, leads to unprotected data vulnerable to viruses that could capture customers’ card data. “Yes, training is part of the answer, but more importantly, we need merchants to begin adopting security measures,” D’Elia said.

Jon Hurst, president of the of the 3,200-member Retailers Association of Massachusetts, says that both merchants and small banks tend to push for the adoption of PINs on EMV cards to improve data security. Big banks have sophisticated frauddetection technologies, but smaller banks often do not, and they’re the ones ending up reissuing cards instead. RAM suggests that PIN adoption should be regulated at the federal level because so many retail transactions now cross state lines. He also advocates for multilayered security measures such as biometry.

Other measures include end-to-end encryption, which makes card data unreadable at inception, whether it’s card swipe, key entry, tap or insertion.

ABA testimony on Oct. 21 before the Congressional Committee on Small Business contended that retailers’ push for adoption of a PIN is a “smokescreen,” intended to take attention away CONTINUED ON PAGE 18

BANKING NEW ENGLAND

17

PROTECTING VULNERABLE CLIENTSCONTINUED FROM PAGE 17 COVER from big retail data breaches and their underlying causes. The ABA contended that PIN technology only addresses a small share of today’s fraud, and wouldn’t have prevented the big breaches. The ABA called for support for bills such as HR 2205, the Data Security Act of 2015.

Hurst noted that there are some areas in which retailers and credit card issuers agree – and some not. “There are divisions in all of those camps,” he said. “All are trying to do the right thing on behalf of consumers and retailers. It should have been done earlier, but it’s time to move on.”

Hurst cited a RAM member survey noting that 61 percent of respondents said they were not prepared to convert by Oct. 1, but half of those respondents said they would be compliant in three months.

Hurst cautioned of a potential for retailers to be pressured by marketers. He said RAM has worked to educate its members that the Oct. 1 date is not hard and fast (a concept with which the ABA, in its Oct. 7 Hill testimony, agreed).

For smaller retailers, he said, the amount of exposure to fraudulent purchases may not be worth the outlay for EMV technology right away. In the absence of a mandated deadline, retailers could hold out for a better long-term solution.

While Hurst said Visa maintains community banks could have done more fraud detection, “We all could have done better to stop squabbling, and try to make a system more usable for all.”

In Search of a Broader Accord

A full-scale effort to stop the squabbling has been in motion since 2012, involving parties across the payment spectrum, from payment providers to merchants. The EMV Migration Forum is an independent, cross-industry body created by the Smart Card Alliance to address issues requiring cross-industry cooperation and coordination in payments to introduce EMV and contactless technology in the U.S. It has about 140 members, representatives of whom meet quarterly, and offers a neutral environment in which to address crucial topics.

Financial services technology company Fiserv is one of the members. Jamie Topolski, Fiserv’s director of alternative payment strategies, sits on the EMV Forum.

Topolski said smaller merchants with a single credit card reader on the counter only need one new piece of equipment in order to successfully migrate fraud. Smaller merchants are spared the burden of custom programming, and vendors are ready to support them. “I think they will make the upgrade to protect themselves,” he said.

EMV by itself would not have prevented the big retail data breaches of the last three years, Topolski said, but it is effective in preventing criminals from creating counterfeit cards.

Issues yet to be addressed by EMV alone – and which have become the next focus of criminals – are card-not-present transactions, also known as MOTO (mail order/telephone order). In Canada, Fiserv was able to launch tokenization ahead of EMV, and sees that combination as an effective fraud mitigator.

Melissa Santora, a product strategist at Fiserv, examined the study of tokenization, in which account numbers are temporarily replaced for each card transaction with a one-time random set of numbers, which are valueless outside of a specific merchant or acceptance channel.

Santora works with the Boston Federal Reserve, as well as its tokenization subgroup, and said that large issuers such as Wal-Mart, 18 BANKING NEW ENGLAND

Wells Fargo, Android, Google and Samsung also use some form of tokenization, with large issuers becoming their own token service providers. “I see it as part of the growing infrastructure,” she said.

The Vermont Bankers Association’s Chris D’Elia voices a similar sentiment. Fighting security threats “requires multilayered and flexible solutions that work in different situations to effectively secure the system,” he said. Those remedies include proven and existing technologies such as encryption, tokenization, biometrics and network-based monitoring. Regulators at the federal level, he said, call for “allowing the payments industry to innovate, adopt a multilayered approach to payment security, and avoid mandating particular security technologies that tend to be quickly outdated.”

That said, he adds, “The ball is not ultimately in the court of the payment providers. Every entity involved in the payment system needs to be part of the solution.” BNE

EMV Fast Stats A June 2015 Fiserv survey of 1,500 U.S. consumers found the following:

38%

of credit card consumers received an EMV card, up from an estimated 13 percent in the first half of 2014

The number of credit and debit card consumers who have received an EMV card increased substantially over 2014. Approximately 38 percent of credit card consumers received an EMV card, up from an estimated 13 percent in the first half of 2014. Also, 19 percent of debit card consumers received an EMV card, compared to approximately 9 percent in the first half of 2014. A total of 76 percent of respondents had used their EMV/chip card since they received it.

62%

percent of consumers had heard of an EMV card

Consumer awareness of EMV cards has risen dramatically in one year as EMV cards become more prevalent. As of June, 62 percent of consumers had heard of an EMV card; for another 23 percent, the term sounded familiar. In contrast, in the first half of 2014, only 31 percent of consumers had heard of an EMV or chip card. The percent stating that it sounded familiar was nearly the same at 25 percent.

For many consumers, the EMV card is the preferred payment card in their wallet. A total of 30 percent of EMV debit or credit card holders stated they use the EMV card more versus only 15 percent stating they use it less.

Confusion over the benefits of an EMV/chip card persists. A total of 29 percent of consumers familiar with the term EMV simply did not know what the benefits were. Another 8 percent confused an EMV card with a prepaid card. This implies that a lack of understanding EMV benefits is even higher in the broader general population.

Millennials are more likely to use EMV/chip cards more frequently versus Baby Boomers, reflecting multiple factors: Awareness of security that EMV/ chip cards provide; typically have fewer cards in wallet vs. Baby Boomers; and Baby Boomers’ preferred card choice is influenced by broader range of factors including: 1) More knowledgeable of card product options; 2) More complicated needs that drive card choice (travel, business, cash back rewards, etc.).

TODAY I MAKE MY TECHNOLOGY DECISIONS HUMAN. It’s time you find a partner, not a vendor.

Your bank needs a technology provider that does business the way you do. For 50 years, CSI has been empowering financial institutions like yours to be more competitive, compliant and profitable. For CSI, it all comes down to delivering the solutions you need and the service you deserve.

csiweb.com/youdeservemore

CORE BANK PROCESSING • MANAGED SERVICES • MOBILE & INTERNET SOLUTIONS PAYMENTS PROCESSING • ELECTRONIC & PRINT DISTRIBUTION • REGULATORY COMPLIANCE

PROTECTING BANK PROFILEVULNERABLE CLIENTS

140 Years of Commitment to Community Banking at Savings Bank of Walpole

BY LINDA GOODSPEED

B Gregg Tewksbury President and CEO Savings Bank of Walpole

20 BANKING NEW ENGLAND

urdicks Chocolates, a $10 million company headquartered in Walpole, New Hampshire, ships its product all over the world, and by necessity has many banking relationships with large regional, national and even international banks.

But COO Cathy Watson said Burdicks makes those relationships “as brief as possible.”

“We just use those banks for deposits,” she said.

“We don’t want to go any further with them.”

Burdicks’ preferred banker is a small community bank located in its hometown: The Savings Bank of Walpole, a four-branch mutual savings institution with $350 million in assets.

“We transfer everything from those big banks to Walpole,” Watson said. “At those other banks you get a different person every time you walk in.

At Walpole, they know us and we know them.

We’ve built a great, confident relationship with them.”

The Savings Bank of Walpole (SBW) has spent the last 140 years building strong, confident relationships. Founded in 1875, SBW has two branches in Walpole, a small (population: 4,000), idyllic New England town on the Connecticut river, and another two branches 12 miles away in Keene, the county seat, with a population of 24,000.

Like other parts of the country, New Hampshire has seen a sharp erosion in headquartered banks. In 1985, there were 68 banks domiciled in the state; today, there are just 17, including Walpole, the only bank headquartered in the area.

Patient Growth

Gregg Tewksbury, president and CEO at SBW, blames the low interest rate environment and the additional regulatory burden imposed by the Dodd-Frank banking reform legislation.

“Capital doesn’t see banking as a good place for a return on investment,” he said.

In fact, of the 17 remaining New Hampshire banks, 12 are mutuals, which are more missiondriven than capital-driven.

“Our capital tends to be a little more patient,” Tewksbury said. “We’re less profitable over time – that’s the patient aspect. We’re not forced to find a partner, as long as our business model allows us to be profitable enough to be sustainable for the long run.”

And Walpole seems here for the long run – 140 years and counting. While other banks have raised fees, merged or cut employees in this low-rate environment, Walpole has done just the

opposite. The bank has the lowest fees for deposit accounts in its market and maintains a high level of staffing – 80 employees in its four branches. Despite continued weak demand for loans, the bank has also grown its residential and commercial loan portfolio. The result was the first increase in net interest income in four years in 2014. And though rates remained unchanged, net interest income increased again in 2015. Walpole’s loan portfolio of $220 million is comprised of about two-thirds residential and one-third commercial.

“We’d like to see a little more on the commercial side, but our area just hasn’t afforded us the opportunity to garner a greater percentage,” Tewksbury said. “We have low unemployment but not much growth.”

In fact, the county is the lowest growth area in the state. In such a slow-growth, well-banked market(12 banks plus credit unions), Tewksbury said Walpole’s strategy is an aggressive defense and more takeaways. The bank has just under 90 percent market share in Walpole, and Tewksbury said SBW will “vigorously” defend that market.

“As the namesake hometown bank, we will invest the resources to maintain that market share,” Tewksbury promised.

In Keene, SBW has about half of the market share of its largest competitor, TD Bank.

“Our goal there over the next seven years is to become the largest depository bank in town,” Tewksbury said.

To do that, Tewksbury said Walpole will open additional branches and is investing heavily in technology. The bank now offers mobile capture (depositing checks remotely using a mobile device) and person-to-person mobile device payments, as well as instant issue debit cards to new customers. Other banks also offer such services. But Tewksbury said the edge for SBW lies in its employees, level of service and community involvement.

“We believe if we are competitive on pricing, state-of-the-art, and offer a great level of service, being the hometown bank that gives back in time and philanthropy will result in more people wanting to choose us to do their banking,” he said.

For its 140th anniversary year, SWB threw a big party on the town green in Walpole, and gave employees small cash gifts and encouraged them to “pay it forward” with small acts of kindness.

The bank’s commitment to community has not gone unnoticed. In 2014, the local United Way chapter in Keene presented the bank the “Spirit of Monadnock” award, its highest recognition.

“The award is reserved for the organization and its employees who best exemplify the spirit of our region,” said Kathy Harrington, United Way president. “It’s not just about donating money; it’s about attitude, commitment to the community and leading by example. The Savings Bank of Walpole is out front in all these areas.” BNE

Operation Welcome Home Operation Welcome Home is a powerful new mortgage product created by MassHousing for Veterans and their families.

For product details and to learn how you can offer Operation Welcome Home to your customers, contact one of our Business Development Officers at

www.masshousing.com/bd 888.843.6432 Mission. Value. Service.

www.masshousing.com

E Q UA L H O U S I N G

O P P O RT U N I T Y

BANKING NEW ENGLAND

21

PROTECTING INDUSTRY NEWS VULNERABLE CLIENTS

CoreLogic: Mortgage Fraud Risk Decreasing

ABA: Delinquencies Dip In Closed-End Loans

For the 12 months ending the second quarter 2015, the report estimates the total value of applications with fraud or serious misrepresentations at $17.3 billion as compared with $19.8 billion a year ago, a decrease of 12.6 percent, according to a new report from CoreLogic, a property information company.

The analysis found that during the second quarter of 2015, approximately 12,814 mortgage applications, or 0.67 percent of all mortgage applications, contained indications of fraud, as compared with the reported 11,100 or 0.69 percent in the second quarter of 2014.

As has been the case for the past five years, the report said jumbo mortgages have exhibited the highest fraud risk, followed by low-down payment mortgages.

Susan Allen, senior vice president of Mortgage Analytics at CoreLogic new regulations and stricter credit overlays have helped curb the rate of mortgage fraud.

“In the markets where fraud remains strong, there are also significant inventories of distressed properties,” Allen said in the report. “Typically, this leads to large value discrepancies with nearby properties, which increases the risk of incorrect valuation, fraud-for-profit schemes, and occupancy fraud on properties recently converted to rentals.”

Delinquencies were down in closed-end loans in the second quarter, driven by a significant drop in home equity loan delinquencies and continued financial discipline by consumers, with delinquencies declining in seven of the 11 individual loan categories, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin.

The composite ratio, which monitors delinquencies in eight closed-end installment loan categories, continued a three-year trend of remaining below the 15-year average of 2.27 percent, falling 17 basis points to 1.36 percent of all accounts. The ABA report defines a delinquency as a late payment that is 30 days or more overdue.

Delinquencies in two of the three home-related categories declined 22 basis points to 2.9 percent and HELOC delinquencies fell 8 basis points to 1.42 percent, continuing their downward trend in the second quarter. Property improvement delinquencies rose slightly, up one basis point to 0.91 percent.

Bank card delinquencies increased slightly in the second quarter, up three basis points to 2.52 percent of all accounts, remaining below their 15-year average of 3.74 percent and only varying 14 basis points since the fourth quarter of 2012.

BofA Reaches $335 Million Settlement Over Mortgages, MERS

The U.S. Federal Reserve kept interest rates unchanged and in a direct reference to its next policy meeting put a December rate hike firmly in play. Investors had expected the Fed to remain pat on rates, but the overt reference to December came as a surprise.

The central bank also downplayed global financial market turmoil and said the U.S. labor market was still healing despite a slower pace of job growth.

“In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation,” the Fed said in a statement.

Investors quickly placed bets reflecting a higher chance the U.S. central bank will raise rates in December, with futures contracts implying a 43 percent possibility compared to 34 percent prior to the statement.

Going into the Fed meeting, the market had viewed March as the most likely time for the central bank to begin its rates “liftoff,” but it now sees a greater chance of that happening in late January. BNE

Bank of America Corp. has reached a $335 million settlement of a federal lawsuit accusing it of misleading shareholders about its exposure to risky mortgage securities and its dependence on an electronic mortgage registry known as MERS. Shareholders led by the Pennsylvania Public School Employees’ Retirement System claimed they had been misled into buying BofA stock in 2009 and 2010, including stock sold to repay $45 billion of federal bailout money.

They said the Charlotte, North Carolinabased lender knew it could not raise enough capital had it revealed it might have to buy back billions of dollars of securities backed by risky loans, including from the former Countrywide Financial Corp.

Shareholders also said the bank knew that record keeping in Merscorp Inc.’s private Mortgage Electronic Registration Systems registry was so poor that it would not be able to legally foreclose on thousands of delinquent mortgages.

22 BANKING NEW ENGLAND

Fed Puts December Rate Hike Firmly On The Agenda

Partnering with banks to keep Massachusetts growing.

For banks across Massachusetts, MassDevelopment’s financing expertise has been invaluable, as we offer solutions you won’t find anywhere else. Our programs include bond financing, loans and guarantees, tax credits, and access to grant funding. And along with all that comes the knowledge to help you figure out the best option for your customers.

Call us today at 800.445.8030, or visit MassDevelopment.com/bank. Way to grow.

AVOIDING LAWSUITS

CFPB Takes Aim At Arbitration Industry Groups Urge FIs To Join The Cause

BY LAURA ALIX Laura Alix is a staff writer for The Warren Group, publisher of Banking New England.

“Most financial institutions, including community banks, would consider this an adverse development. They already feel like they are burdened by excessive litigation and regulation and that the arbitration clause is one mechanism by which they can reduce the litigation that they’re subjected to.”

— Kevin Handly Banking Attorney

24 BANKING NEW ENGLAND

T

The Consumer Financial Protection Bureau’s proposal to limit the use of arbitration clauses could sweep community financial institutions into the cottage industry of class-action lawsuits, but if you want to know how the little guys might fare in this latest round of rulemaking, you’ll have to read the fine print.

By the time you read these words, the bureau will likely be moving ahead with its small business review panel, the next phase of rulemaking for an Oct. 7 announcement that it would be taking action on arbitration clauses.

“Companies are using the arbitration clause as a free pass to sidestep the courts and avoid accountability for wrongdoing,” CFPB Director Richard Cordray said in announcing the proposal. “The proposals under consideration would ban arbitration clauses that block group lawsuits so that consumers can take companies to court to seek the relief they deserve.”

The bureau further said its proposal would require arbitration clauses to explicitly tell consumers that those clauses do not apply to cases filed as class actions unless a court denies class certification.

Citing its own study of the subject, completed earlier this year, the bureau said that while arbitration agreements are pervasive in credit card and student loan contracts, among others, very few consumers individually seek relief through arbitration or the federal court system.

Further, the bureau said that more than 75 percent of consumers in the credit card market did not know if their contract had included an arbitration clause and fewer than 7 percent knew that an arbitration clause could restrict their ability to sue in court.

The bureau clarified that it is not seeking to ban the use of all pre-dispute arbitration agreements – just those that would block class-action litigation.

While it’s easy (not to mention popular) to scorch financial services companies for including those clauses in their agreements, bankers might point out that arbitration is intended to resolve disputes more quickly and cheaply than a trial in court – and further, that arbitration clauses put a limit on more frivolous class-action suits.

The Devil’s In The Details

The Consumer Bankers Association immediately blasted the proposal as siding with trial attorneys over consumer interests, perhaps a nod to litigants who are only happy to use well-intentioned consumer protection laws for their own profit, and the Financial Services

Roundtable similarly derided the bureau’s latest proposal, arguing that a ban on arbitration clauses would “only benefit plaintiff lawyers.”

“The idea that the CFPB would restrict the use of these arbitration clauses is not surprising to me. The mission of the CFPB is to protect consumers and this is totally in line with their mission,” said Kevin J. Handly, a Boston-based banking lawyer. “On the other hand, I think probably most financial institutions, including community banks, would consider this an adverse development. They already feel like they are burdened by excessive litigation and regulation and that the arbitration clause is one mechanism by which they can reduce the litigation that they’re subjected to.”

Of course, the Massachusetts Bankers Association (MBA) is keeping an eye on the proposal, said Senior Vice President Jon Skarin.

“I don’t know exactly how many of our banks have arbitration clauses in their deposit account agreements, but that’s an area we would have concerns about potentially,” he said. “A lot of it’s going to be in how they craft the details as they go forward.”

Andrew Glass, a partner at K&L Gates who often represents financial institutions in class-action suits, said the rule could have the effect of discouraging businesses from including arbitration clauses entirely in their consumer services agreements.

“I would say arbitration agreements would be permitted, but they couldn’t include a class waiver provision, and so it would make compelling arbitration on an individual basis difficult,” Glass remarked. “After the regulation went into effect, there would be a question about, could a small institution continue to maintain its current form of services agreement with new customers.”

Before the bureau can issue a more formal rule, it must convene a small business review panel, after which point it will issue a more formal proposal and invite comments.

Skarin said he expects the MBA will have some feedback for the bureau at that point, and Glass said he would urge small financial institutions to chime in now while the sausage is still being made.

“I think most banks try very earnestly not to violate consumer rights and try to do right by their customers when a violation is identified,” Handly said. “I think probably most financial institutions and their counsel would say it’s really not necessary for the CFPB to so restrict arbitration clauses in consumer agreements.” BNE

PROTECTINGFILE VULNERABLE CLIENTS PERSONNEL

Career achievers in banks across New England are constantly on the move, with their professional journeys reflecting a combination of mobility and longstanding service. In this space, we acknowledge them, and welcome readers to submit news of their own banks’ efforts and endeavors to Editorial Director Cassidy Murphy at cmurphy@thewarrengroup.com.

Featured Banks • Blue Hills Bank • Charles River Bank • Claremont Savings Bank • Country Bank • First Niagara • Franklin Savings Bank • Granite Bank • Needham Bank • North Brookfield Savings Bank • North Shore Bank • Savings Bank of Walpole • TD Bank • Webster Five Cents Savings Bank

Appointments and Elections Blue Hills Bank Blue Hills Bank announced the appointment of Anthony “Bud” LaCava to its board of directors. A former managing partner in KPMG’s Boston office, LaCava brings to Blue Hills 35 years of public accounting experience.

First Niagara First Niagara Financial Group announced the appointment of Jonathan Miller as senior portfolio manager for First Niagara Jonathan Miller commercial finance and asset-based lending. Miller will be responsible for managing existing clients and cultivating new asset-based lending relationships. Miller was previously a vice president at Capital Crossing Servicing Company in Boston.

Webster Five Cents Savings Bank Webster Five Cents Savings Bank named Nicholas Lynch a mortgage loan originator.

Nicholas Lynch Lynch brings 10 years of experience working with customers in multiple communities in and around Worcester County, Massachusetts, within the financial services industry. Lynch spent the majority of his career at Bank of America, where he worked for 10 years as a financial center manager.

Needham Bank Needham Bank in Massachusetts has appointed three to its advisory council, including Christopher J. Kelly, a founding owner Christopher Kelly and principal of Newtonbased real estate development and investment company Insight Partners Inc. Kelly also serves on the board of directors and management committee at A.M. Burden & Co., a private investment company located in New York City.

Bill Treddin has also been appointed to the bank’s advisory council. Now retired, Treddin 26 BANKING NEW ENGLAND

enjoyed a long career in commercial lending, most recently spending 11 years at Bank of Canton. Before then, Treddin spent portions of his career with Compass Bank and Bay State Federal.

Bill Treddin Kelly Hynes McDermott has joined the bank’s advisory council. McDermott a is a marketing consultant by trade. In her career she has consulted on image and branding for many local businesses. She has worked Kelly McDermott on national advertising campaigns for many widely-known brands such as American Express and Reebok. In her current role, she works with companies to create unique marketing strategies that drive sales through multi-communication channels.

TD Wealth Private Client Group TD Wealth Private Client Group has named Adam West as relationship manager in Metro Boston, Adam West covering the Southeastern Massachusetts, Metro West and Worcester markets. As a relationship manager, West provides high-net worth clients with a custom wealth management experience leveraging TD Wealth’s holistic client service model. Working with TD Wealth’s Investment Advisors and Trust Advisors, West will proactively manage and invest his clients’ assets, and introduce them to the full range of wealth management solutions available to meet their specific financial objectives.

TD Bank Martha Papachristou joins TD Bank as assistant vice president and store manager of the location at 921 Meriden Waterbury Turnpike in Plantsville, Connecticut. She is responsible for new business development, consumer and business lending, managing personnel and overseeing the day-to-day operations at the store serving customers throughout the area.

Promotions Charles River Bank

Heather S. Johnson

Charles River Bank has promoted Heather S. Johnson to vice president and commercial loan officer. Johnson joined Charles River Bank in December 2014 as a commercial credit analyst for CRB’s lending group. Johnson will be based in Charles River Bank’s Medway, Massachusetts office, and also have regular office hours at the Bellingham and Mendon offices.

TD Bank

TD Bank has promoted Andrew S. Love to store manager of the location at 95 Main St. in Gorham, Maine. He is responsible for new business development, consumer and business lending, managing personnel and overseeing the day-to-day operations at the store serving customers throughout the area.

Andrew S. Love TD Bank has promoted Jamison M. Torres to assistant vice president and store manager of the location at 121 Main St. in Buzzards Bay, Massachusetts. He is responsible for new business development, consumer and business lending, managing personnel and overseeing the day-today operations at the store serving customers in Buzzards Bay, Bourne and East Wareham.

Juan R. Alvarado TD Bank promoted Juan R. Alvarado to assistant vice president, store manager of the location at 150 Main St. in Amesbury, Massachusetts. He is responsible for new business development, consumer and business lending, managing personnel and overseeing the day-today operations at the store serving customers in the North Shore area.

TD Bank promoted Nicholas D. Wolf to Nicholas D. Wolf assistant vice president, store manager of the Brighton location at 391 Market St. in Brighton, Massachusetts. He is responsible for new business development, consumer and business lending, managing personnel and overseeing the day-to-day operations at the store serving customers throughout the area.

Granite Bank

Angela Ferris has been promoted to assistant vice president and portfolio manager at New Hampshire-based Granite Bank. Ferris began her banking career in 1996 and joined Granite Bank in 2009.

She is a 2014 graduate of Southern New Hampshire University where she earned a bachelor’s degree in accounting.

Franklin Savings Bank

Franklin Savings Bank announced the promotion of Garrett Henry, who has been with the Franklin, New Hampshire-based bank since 2003, to vice president and information technology officer. Henry is responsible for the day-to-day oversight of the bank’s IT activities, to include technology planning and budgeting, Garrett Henry project management, research and development, security training, and compliance with information security and cybersecurity guidance and regulations.

Savings Bank of Walpole

Lisa Bierweiler-Franks and Heather Scheck have been promoted to assistant branch manager positions at Keene, New Hampshirebased Savings Bank of Walpole. Bierweiler-Franks, who joined the bank two years ago, is the new assistant branch manager at the bank’s North Meadow Plaza branch in Walpole. An employee at the bank since 2008, Scheck will transfer to the West Street branch in Keene.

Country Bank

Worcester, Massachusetts-based Country Bank has promoted Robert Kolb to executive vice president, chief commercial and retail banking officer. Kolb has 33 years of experience in the banking industry and has been with Country Bank since 2012. Prior to joining Country Bank, Kolb worked at TDBank as the Rhode Island market Robert Kolb president. Prior to that, he held the same position for both the Central and Western Massachusetts divisions.

New Arrivals Granite Bank

Carol A. Estes joined Granite Bank as vice president and commercial loan officer of the bank’s Portsmouth, New Hampshire, office. She has 30 years of New Hampshire banking industry experience, including commercial lending, credit analysis and business development.

Pamela Bunnell has also joined the bank as vice president and residential loan officer in the Colebrook office. She comes to the bank with 39 years of industry experience.

And Bridget Freudenberger is returning to the bank as vice president and commercial loan officer. A former 20-year employee of the bank, Freudenberger began her career there, working as a parttime teller during high school.

North Brookfield Savings Bank

Pam Kozlik

Pam Kozlik has been promoted to the position of commercial credit analyst of Massachusettsbased North Brookfield Savings Bank. She will be responsible for conducting analyses on business loans, supporting existing financing relationships and reviewing new business loan opportunities.

North Shore Bank

North Shore Bank has named Suzanne O’Brien as the new assistant vice president and branch manager of its Cliftondale Square branch in Saugus, Massachusetts. Previously, O’Brien was the assistant vice president and branch manager of North Shore Bank’s Beverly office. BNE Suzanne O’Brien

BANKING NEW ENGLAND

27

PROTECTING GOOD VULNERABLE COMMUNITY WORKS CLIENTS

Financial institutions large and small have been making a difference in their communities for years. In this space, we acknowledge them, and welcome readers to submit news of their own banks’ efforts and endeavors to Editorial Director Cassidy Murphy at cmurphy@thewarrengroup.com.

Featured Banks • Androscoggin Bank

Androscoggin Bank

Androscoggin Bank will award approximately $7,000 to four Maine recipients as part of its bi-annual grant awards, providing support to nonprofits and organizations that benefit the community in three specific areas: economic development, education and the arts.

Androscoggin Bank’s MainStreet Foundation has also awarded $17,400 to five nonprofit organizations – At a Bend in the Road, Lewiston Education Fund, St. Mary’s Regional Medical Center’s Nutrition Center, Tedford Housing and The Root Cellar.

BankNewport

• BankNewport • Bay State Savings Bank • Bristol County Savings Bank • Commerce Bank • Country Bank • Dedham Institution for Savings • East Boston Savings Bank

BankNewport granted $5,000 to Good Neighbors to support the purchase of food and supplies for the soup kitchen, food pantry and day shelter. BankNewport and its business partner, OceanPoint Insurance Agency, also donated $2,000 to Special Olympics Rhode Island.

Bay State Savings Bank

Bristol County Savings Bank

• Eastern Bank • Franklin Savings Bank • HarborOne Bank • Kennebunk Savings • Merrimack County Savings Bank • MutualOne • Webster Five Cents Savings Bank

Bay State Savings Bank recently awarded $11,425 in grants to seven local nonprofit organizations through its charitable foundation. Among the recipients were Big Brothers Big Sisters of Central Massachusetts/Metro West Inc.; The Casa Project Inc.; Jeremiah’s Inn; Literacy Volunteers of Greater Worcester; McAuley Nazareth Home for Boys Inc.; National Education for Assistance Dog Services Inc. and Rachel’s Table.

Commerce Bank

Commerce Bank recently presented a $2,500 donation to the Massachusetts Small Business Development Center Network Regional Office at Clark University to support the MSBDC in its mission of providing management advice and technical assistance to prospective and existing small businesses.

28 BANKING NEW ENGLAND

Bristol County Savings Bank recently donated $5,000 to Buttonwood Park Zoo in New Bedford, Massachusetts, for its popular “Boo at the Zoo” event that raises funds for its educational and family programs. Through its charitable arm, the Bristol County Savings Charitable Foundation, the bank awarded grants totaling $62,000 to 13 Pawtucket, Rhode Island-area nonprofit organizations during a ceremony recently at McCoy Stadium, home of the Pawtucket Red Sox.

Country Bank Massachusetts-based Country Bank distributed a $250 gift card to Staples to 29 local schools who participate in the bank’s Savings Makes Sense School Banking Program to help purchase school supplies.

Dedham Institution for Savings

The Dedham Institution for Savings Foundation donated $2,500 to Sportsmen’s Tennis & Enrichment Center in Dorchester, Massachusetts, to help fund summer scholarships for both partial and full enrollments to the Learning Center at Sportsmen’s Tennis & Enrichment Center.

East Boston Savings Bank East Boston Savings Bank presented scholarships to students at the Annual Italian American Heritage Month Kick-Off Event.

Eastern Bank

The Eastern Bank Charitable Foundation awarded the Manchester Police Athletic League with a $5,000 grant as part of its 2015 Targeted Grant program, which goes toward organizations working in the area of violence prevention. The foundation also awarded Easter Seals New Hampshire with a $5,000 grant, the Boys & Girls Club of Manchester with a $10,000, the Child and Family Services of New Hampshire with a $10,000 grant and Granite State Children’s Alliance with a $10,000 grant.

Franklin Savings Bank

Franklin Savings Bank honored 12 community organizations for their contributions to improving the lives of individuals throughout the Central New Hampshire Region at the 3rd Annual Fund for Community Advancement Event and donated $22,600 in grants to six nonprofit organizations. It also donated $5,000 to the Network for Educational Opportunity to support the K-12 Education Scholarship Program, which awards grants to New Hampshire students who are struggling in their current learning environment. Franklin Savings Bank also raised $15,125 for its Granite United Way Pacesetter Campaign.

HarborOne Bank

HarborOne Bank donated $2,500 to the Boys & Girls Club of Brockton, Massachusetts, and $1,000 to the South Shore Conservancy’s ImagineARTS in support of their programming, which provide arts and literacy education to Brockton students at the Adult Learning Center Preschool, the Gilmore Early Childhood Center and the Barrett Russell Kindergarten Center.

Kennebunk Savings

Kennebunk Savings announced a milestone in its Community Promise community investment program; the Maine-based bank has given $10 million away over the last 21 years to nonprofit organizations.

Merrimack County Savings Bank

The Merrimack County Savings Bank Foundation granted $3,400 to Concord Dental Sealant Coalition, which will go toward their mission of addressing the unmet dental needs of Concord, New Hampshire-area school children.

MutualOne The MutualOne Charitable Foundation donated $2,500 to help fund the Framingham Police Department’s National Night Out, $5,000 to MetroWest ESL Fund, $10,000 to the Boys & Girls Clubs Framingham Clubhouse and $2,000 to a Natick special needs program.

Webster Five Cents Savings Bank

The Webster Five Foundation has donated $1,000 to the Pakachoag Music School of Greater Worcester for the financial aid program to help alleviate tuition for students from low-income families. The bank also announced that the Strengthening Our Future capital campaign project at Harrington HealthCare at Webster has been completed through a $50,000 grant from the foundation and has additionally donated $15,000 to Quinsigamond Community College.

BANKING NEW ENGLAND

29

PROTECTING VULNERABLE IN CASE YOU MISSED IT CLIENTS

Featured Banks

Country Bank

HarborOne Bank

• Camden National Bank • Country Bank • East Boston Savings Bank • HarborOne Bank • Needham Bank

Country Bank has opened its 15th branch location in Worcester, Massachusetts. The new location on 278 Park Ave. is Country Bank’s first full-service branch in the city. The branch will feature a drive-through lane, a drive-up ATM, coffee bar and a technology lounge with Wi-Fi. The branch is managed by Sheila Orsi, who has been with Country Bank for six years.

Needham Bank

Needham Bank has opened its newest office in Millis, Massachusetts. The bank rehabilitated the lot on 857 Main St. with a new building and landscaping on the intersection of routes 109 and 115. David Scarcella, who has been with Needham Bank for three years, leads the Millis team. Nicole Barbour is the Millis office’s assistant branch manager. She has worked in the bank’s Needham office for five years.

Over 50 area business leaders attended an Oct. 1 open house at HarborOne Bank’s new commercial loan office, located in the financial district at Suite 703 of 40 Westminster St. HarborOne opened the downtown Providence office in June with Vice Presidents Mathew Insana, George Sadler and Murray Charron, who have extensive lending experience in the Rhode Island market.

Camden National Bank, The Bank of Maine

East Boston Savings Bank

East Boston Savings Bank had a ribboncutting ceremony to unveil its new Dorchester, Massachusetts, located at 960 Morrissey Blvd. This is the bank’s 28th branch. City Councilor Frank Baker, staff from State Rep. Daniel Hunt’s office and other local officials and community leaders were on hand to celebrate the grand opening. The new branch, located inside the new Marketplace on Morrissey, will offer a convenient drive-up ATM and an array of banking services. Branch Manager Jackie Hartshorn has been with the bank for over 13 years.

30 BANKING NEW ENGLAND

Camden National Corp., the parent company of Camden National Bank, has acquired SBM Financial Inc., the parent company of The Bank of Maine. Announced in March, the focus of this merger will remain on expanding relationships, with Camden National Bank welcoming 55,000 new customers who will have access to 64 banking locations and over 85 ATMs across the state of Maine. Camden National Bank remains headquartered in Camden, Maine, but the merger further expands Camden National Bank into Portland, Kennebunk, Saco and York. BNE

?

MARKETING LISTS | PROVIDED BY THE WARREN GROUP

NEED HELP FINDING NEW PROSPECTS We Will Find Your New Clients Among The Many With The Warren Group’s Marketing Lists.

Whether you are in search of mortgage refinance candidates or homeowner anniversaries, The Warren Group has the list you

need to best reach your target audience. Successful businesses consistently rely on The Warren Group to identify new revenue opportunities with the most accurate and detailed information available. Homeowners invest in upgrades, renewal, and maintenance every day; invest in our marketing lists to find them.

There are millions of households in the United States. In every one, individuals invest time and money—painting walls, picking weeds, paying bills. Things get broken; things get built. With millions of doors

Find Your Target Audience Through Our Custom Lists: n Homeownership

Anniversary n Mortgage

Refinance n First Time

Homeowner n Home Equity

Candidate

for your opportunity to knock on, do your knuckles a favor by using The Warren Group’s Marketing Lists to hone in on the right homes.

n And More ...

Pinpoint Your Next Customer With Our Marketing Lists Today!

Speak with an account manager about which marketing lists are right for you.

(617) 896-5365 | datasolutions@thewarrengroup.com

LOW WALL 4

Is your lobby

4

5

changing?

5

3 4

2

A2.0

5

1 4

4

4

Public Lobby

103

5

4

4

Pods

Hotelling

2

135

째

Cash Recycling

2

6

6

For all the latest in branch concepts, contact DRL Architects. We have completed numerous branch transformations in the past 2 years. Contact us and we can show you what is happening to your branch

ILTs

6

6

014

002

6

째

2 West St. Suite G, Weymouth MA 02190

www.drlarchitects.com

115

1

001

6

4

Ve

8

Manager

102

Loan/Office

135

781-331-8541