Page 1




goin’ mobile


In today’s changing debit landscape, choose the STAR® Network to ensure success every step of the way. Regulatory change is coming, and you need to prepare. The STAR® Network adds value beyond the transaction with: • Cutting-edge Security Solutions

• Industry-leading Innovation

• Coast-to-coast POS/ATM Access

• Proven Commitment

©2011 First Data Corporation. All Rights Reserved.




features C O V ER S TOR Y

Credit for Life

Goin’ Mobile

Fair Introduces Students to Saving . . . . . . . . . . . . . . . . . . . . . . . 12

The Future is Now: Mobile Banking . . . . . . 16


Charting a Course to Financial Education . . . . . . . . . . . . . . . . . . 13


Chairman’s Column . . . . . . . . . . . . . . . . . . . . . . . 4 Legislative Review . . . . . . . . . . . . . . . . . . . . . . . . 8

Private Banking Outsources for Growth . . . . . . . . . . . . . . . . . . . 14



Like Clockwork . . . . . . . . . . . . . . . . . . . . . 6


On the Move . . . . . . . . . . . . . . . . . . . . . 22 Good Neighbors . . . . . . . . . . . . . . . . . . . 26 MBA Calendar of Events . . . . . . . . . . . . . . 30


One Washington Mall, Boston, MA 02108-3906 Phone 617-523-7595 • Fax 617-523-6373

Officers Chairman: Kenneth C. Brennan, President The Village Bank, Auburndale

Massachusetts Banker is the official publication of the Massachusetts Bankers Association, which is solely responsible for its written content. The magazine is produced quarterly by

Chairman CEO & Publisher President Group Publisher & Editor in Chief ©2011 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.

Vice Chairman: Norman S. Seppala, President Granite Savings Bank, Rockport

Treasurer: Dorothy A. Savarese, President Cape Cod Five Cents Savings Bank, Orleans

President: Daniel J. Forte Questions? Call: 617-523-7595

Editor Bruce E. Spitzer Associate Editor Barbarajean Adams The Warren Group

Editorial, Production and Advertising Offices:

The Warren Group 280 Summer Street, Boston, MA 02210 Phone 617-428-5100; Fax 617-428-5119

Timothy M. Warren Timothy M. Warren Jr. David B. Lovins Vincent M. Valvo

Finance & Administration Controller / Dir. of Operations Jeffrey E. Lewis Editorial Custom Publications Editor Christina P. O’Neill Associate Editor Cassidy Norton Murphy Advertising & Circulation Publishing Division Sales Manager George Chateauneuf Advertising Account Managers Rich Ofsthun Cara Inocencio Marketing & Events Coordinator Emily Torres Design & Production Creative Director John Bottini Senior Graphic Designer Scott Ellison Graphic Designer Ellie Aliabadi

Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


Chairman’s Column by Kenneth C. Brennan

Keep the Change


ometimes trends are easy to spot – they hit you over the head. Other times, you need to connect the dots. There are three pieces in this issue of Massachusetts Banker that are more like the latter. You may need to read them and think about them separately, and then perhaps you’ll have an “ah-ha!” moment, as I did. The first is a comprehensive cover story written by former Boston Herald business reporter Jay Fitzgerald about the meteoric rise of mobile banking technology, including one local bank that is offering not only the ability to pay bills from a smartphone, but the ability to deposit a check – take a picture of the check from your phone, send it electronically to the bank for deposit. The second piece was contributed by Massachusetts senators James Eldridge and Barry R. Finegold about the need for financial education among today’s youth. The legislation they and other legislators are sponsoring, currently in committee on Beacon Hill and supported by the Massachusetts Bankers Association, if passed, would mandate financial education in the commonwealth’s schools in grades kindergarten through 12. Yes, it’s hard to imagine, but in today’s complex financial world, many of our young adults are leaving high school for jobs or for college without any formal financial education. The third piece I would draw your attention to is our quarterly Dossier feature. This issue’s focus is on Bristol County Savings Bank and how its soon-to-retire CEO (and former MBA chairman) Dennis Kelly is passing the baton to Pat


Murray. What drew most of my attention, however, was Dennis’ reflection on how much change he has seen in the banking industry since he entered the profession in the early ’70s and how his institution adapted. So, what’s the connection you ask? Keeping up with change – or setting the pace. Our young adults may be the early adapters of new technology like mobile banking, but if they are not sophisticated enough to understand the accounts they are managing, they could be headed for a life of mismanaged finances, however convenient. Similarly, if we bankers do not keep pace with innovations we’ll lose these same customers to the never-ending list of nonbanks attempting to grab our market share. Opportunities abound if you take the initiative. Whether you are a banker or a student, to paraphrase, mix and mangle a couple of axiomatic expressions, change is good and fortune favors the prepared.

Farewell It’s hard to believe, but this is the last Chairman’s Column that is coming to you during my chairmanship of the Massachusetts Bankers Association. What a year! Considering what our industry has been going through, I’m sure you would agree. I can’t say the challenges we faced were all pleasant, but that’s the nature of the beast. And we faced them together. By far, what occupied most of our attention was the need to mitigate substantial problems in the Dodd-Frank financial reform legislation. The potential impact on mutuals; loan-to-one borrower limits; the Fed’s ability to regulate community banks; risk retention rules; the Collins Amendment on trust

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

preferreds; the mortgage cramdown language, and much more, all needed to be addressed. Your association gained quite a few victories, and is still fighting the good fight in many areas (interchange chief among them). This is not to say that it has all been drudgery with limited success. On the contrary, I am proud to say that it was such a delight to see the MBA make many other strides: 172 educational programs in 2010, the highest on record; foreclosure prevention initiatives; educating the media and the public about the difference between Main Street banks and Wall Street institutions; favorable revision of the state’s 18/65 law; successful marketing of the SUM program; pushing to end duplicative and burdensome regulations; educating and engaging the senior bankers of tomorrow from within your own organizations; spreading the word about the un-level playing field as we compete against tax-free credit unions; setting records in our charitable giving through our member-supported foundation; controlling health care costs; galvanizing more bankers into action through our grassroots program; commissioning and promoting the results of a small business lending study that showed Bay State community banks actually increased their lending during the recession; expanding the MassBankMortgages website; and much more. Those are the kind of things that you should remember, as I do, about your trade association. As I exit as your chairman on June 30, I leave you in the good hands of your incoming chairman, Norm Seppala of Granite Savings. (Take a deep breath, Norm, you’re in for quite a continued on page 25

Now is not the TIME to go it ALONE

Now is not the time to go it alone as you try to reach your goals.

It could get rough ahead as you chart your course for the coming year:

increased regulatory expectations and expenses, declining interest rates and revenues. Make sure you have the expertise you need to conquer today’s uncertain environment. For more than 30 years, John M. Floyd & Associates has helped thousands of financial institutions improve their bottom line and productivity through innovative programs, guaranteed compliant products and unsurpassed service. You can trust JMFA to help you ride out the storm and reach your destination.

JMFA OVERDRAFT PRIVILEGE® Non-Interest Income Enhancement Executive Recruitment Service Process Improvement Sales and Service JMFA Contract Optimizer • 800-809-2307 © 2011 John M. Floyd & Associates, Inc. J|M|F|A® and JMFA OVERDRAFT PRIVILEGE® are registered trademarks of John M. Floyd & Associates, Inc.

Dossier by Bruce E. Spitzer

Like Clockwork Institution:

Bristol County Savings Bank

President and CEO:

E. Dennis Kelly Jr.


Taunton, Mass.


$1.3 billion








State Mutual (Holding Co.)


1846 E. Dennis Kelly Jr.


utside of the old headquarters building of Bristol County Savings Bank, just off of Taunton’s historic common, sits a giant pedestal clock that through many years has become synonymous with the bank – so much so that it became part of the bank’s logo, and replicas are created when new branches open. Yes, the hands of time keep moving on. That might be the lament of E. Dennis Kelly Jr., Bristol County’s soon-to-retire CEO, were it not for a pleasant reality: It’s easier to retire when you know that the company you have nurtured for 34 years will be in good hands. As Dennis Kelly leaves his beloved Bristol County Savings Bank early next year for retirement, he is confident that Patrick Murray will succeed in his footsteps when Murray becomes the new leader of the 165-yearold Taunton-based institution. Things have changed since 1846. Perhaps never so fast as in Kelly’s tenure in banking that began in 1970 when Richard Nixon led the nation, the Vietnam War raged, and acting Gov. Francis W. Sargent defeated incumbent Boston Mayor Kevin White in the Massachusetts gubernatorial election.


Kelly is a soft-spoken, genial man who is quick to laugh and throughout his career has displayed a quiet confidence that immediately puts people at ease. He will tell you that he was just along for the ride, but Kelly’s steering had a lot to do with the bank’s growth, from a small-town savings bank with a single office and 20 staff in the mid ’70s, to today’s two-state commercial bank with 11 branches and more than 300 employees and two subsidiaries (a trust company and an insurance agency). All are now under the umbrella of a mutual holding company, Beacon Bancorp, with total assets of nearly $1.3 billion, and a superior capital ratio standing at 14.5 percent. Numbers are one thing, but Kelly is quick to point out that it’s the staff who are the most important. Typically modest, he credits his colleagues with his success. “It’s the people we’ve brought onboard that have made all of the difference,” he says. “Without our valuable staff we would have not gone very far. They are what I’ll miss the most. Our staff has done a tremendous job.” In his many years with Bristol County, including the years since he

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

Patrick Murray

became president in 1994, the greatest change Kelly has witnessed has come in the form of competition, ebbing and flowing. “When I started in Taunton we had 10 local banks and their presidents sat here [in Taunton]. Now, we’re one of two banks based here, but our competition is tougher because we have much larger organizations from outside of the state to compete against.” Perhaps the most rewarding of all of Kelly’s successes has been the creation and the growth of Bristol County’s charitable foundation that, over the years, has placed a particular emphasis on funding educational endeavors. “Since its inception in 1996 as part of the bank’s 150th anniversary, we have funded it with our own net worth,” says Kelly. To illustrate the growth of the foundation, he reports, “Last year we gave away a little over $1 million to more than 150 not-forprofits, and since the beginning the Bristol County Savings Bank Charitable Foundation has contributed more than $7 million to our local communities. When I factor in the hours that our people dedicate to it, the support is tremendous. We have people from our institution chairing

fund-raising campaigns and being actively involved in the communities we serve.” As an example of the proud support for education that the bank has demonstrated, Kelly points to a recent $22,000 grant to the Pawtucket, R.I. school department, representing just a fraction of the $400,000 to $500,000 annually distributed to schools and financial education programs. The grant provided the seed money to restore music programs in all 15 of Pawtucket’s public schools, and ultimately develop the talent to bring a high school band back to the city of Pawtucket. The superintendent of schools is now using this grant to foster support from other organizations, such as VH1’s “Save the Music,” the Pawtucket Red Sox and many other local entities. Other local support includes funding for a financial literacy program at Bridgewater State University, a credit recovery program at Attleboro High School and a literacy closet at Hopewell Elementary School in Taunton. If Pat Murray is a little intimidated about taking over for a man who has achieved so much at the helm of Bristol County, he doesn’t show it. Not that he is overconfident; on the contrary, Murray has an air of humility about him that is reassuring. “He’s pushing me out the door,” jokes Kelly, who in actuality has been grooming Murray for the CEO position for quite awhile. “We’ve been working on the transition for a couple of years,” says Murray. “It should be fairly easy, given that we’ve been working together for 20-some-odd years,” adds the EVP, who began his banking career as a teller while still in college in the late ’70s, then moved away for a few years to work in public accounting before joining Bristol County in 1986. “We’re focusing on consistency. It will not be that big of a change.” Despite the challenges facing the banking industry, Murray sees a bright future for Bristol County Savings Bank, and he’s committed to remaining a mutual.

“I think we’re a very good size also going to look and see how we to compete in the future,” he says. can diversify our non-interest in“We’ll raise capital through earncome with an emphasis on investings and focus on people, technolment management and insurance. ogy and products and services.” And, of course, credit review will Both Kelly and Murray have subcontinue to be an important part of mitted a plan to the board that has what we do.” been approved to promote three Murray also sees expansion on key people, a chief operating offithe horizon, looking at the Massacer, a chief financial officer and a chusetts South Coast and Rhode Ischief information officer, to manland as growth opportunities. age the responsibilities that Murray “I also plan to learn from the currently owns. group coming up behind me in the Murray, for all his optimism, is bank,” he says. “I’m looking fornot being Pollyannaish about the ward to them taking me out of my future: He does see a few chalcomfort zone.” lenges ahead. “My number-one priSpeaking of comfort, as he heads ority is to continue positioning the toward retirement, on the business bank for the future by maintainside and the charitable side, Dening our financial strength, supportnis Kelly is justifiably proud of his ing our communities, meeting the institution and the new course that financial needs of our customers Murray will be charting. and diversifying our lines of busi“We’re doing things now that I ness,” he says. “In Dennis’ tenure, would never have thought possiwe carved out quite a niche in comble,” says Kelly. “It’s been a tremenmercial lending, and I see an ondous run.” going challenge in attracting and That big ol’ clock just keeps right training commercial lenders. We’re on ticking. n Magner_4Prod_WarPubs_NY/MA/CenPt/CU:Layout 1 3/8/10 10:30 AM Page 1

Commercial Grade Desktop Money Handling Products AFFORDABLE NECESSITIES

75 Series Currency Counters

4 in 1 Currency and ID Authenticator

Pelican 305S+

Model 935 Coin Verifier/Packager

Proven Performance and Quality

Coin Counter/Sorters with Optional Stand

Contact us: 800-347-1414 ext. 336 or visit

OPPORTUNITIES: Magner is soliciting inquiries from dealers in their efforts to expand distribution channels in new markets and territories.

Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


Legislative Review by David Floreen

Play Ball?


pring has been late this year, especially after a tough winter. Even opening day at Fenway was later than usual. So too is our state legislature; while nearly a dozen state legislatures finished, yes, finished, their sessions for the year by the end of April, we are just getting started. In last quarter’s column we noted the shift in power to Republicans across the nation, especially in state houses where redistricting could be impacted in 2011. We did not have to wait long. Led by the aggressive tactics of Gov. Scott Walker in Wisconsin and governors in Florida, Maine, New Jersey, Ohio and elsewhere, state governments are tackling long-standing fiscal issues that were unthinkable just five years ago. Many of these new leaders are taking hard-line, no-compromise positions on many issues, particularly with respect to public employee benefits, primarily pensions, health care and collective bargaining. Even Massachusetts is not immune to this debate. Last month, the House voted 111-42 to support a major municipal health-reform package permitting municipalities to revise public employee health care benefits without going through collective bargaining. Has the paradigm truly shifted, or will some new revenue sources suddenly emerge to restore funding to pre-2008 levels? Most analysts suggest that current benefit spending levels are unsustainable, but are voters really willing to accept permanently reduced services? Will public officials and unions play ball or dig in? Will it be an inside fast ball or a dancing knuckle ball? The 2012 elections will decide.


The economic situation in Massachusetts, despite the nearly $2 billion structural budget gap for fiscal year 2012 (defined as costs for current obligated programs against current revenues) is far better than many other states. A Wall Street Journal study in late February showed that Massachusetts had the third smallest budget gap as a percent of its total budget (5.7 percent) of 45 of the 50 states (data was not available for five states). Ten states face gaps of 20 percent or more! Just recently Standard & Poor’s raised the state’s bond rating – Massachusetts is the only state in several years to receive an increase. Even so, Massachusetts and its cities and towns still face enormous fiscal challenges, as the recently released House budget attests. One bright spot: April state tax collections jumped 43 percent over 2010 and are up $1.9 billion for the first 10 months of fiscal year 2011. Aside from the deep and sustained financial pressures facing all governments, redistricting Congressional and state legislative seats may well be the second most important agenda item across the nation. Why? Because it will set the base of power for the next 10 years. How districts are configured is important and, given the fact that state legislatures generally set Congressional boundaries, their influence on federal policies is significant as well. That certainly is the case here in Massachusetts.

Beacon Hill Review While many standing legislative committees have not held or, in many cases, even scheduled public hearings, the Committee on Redistricting has begun its statewide series of 11 public hearings to elicit input from voters and public officials across the Commonwealth on how to

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

recast the current 10 Congressional districts into nine, based on the official 2010 U.S. Census data for Massachusetts released late last month. Municipalities are required to redraw all local precinct lines by June 15. Once those are filed with the Secretary of State, then the Legislature’s redistricting committee can really begin its work to draft actual proposed maps of the nine Congressional, 40 state senate and 160 house seats. Although there are clearly defined constitutional and statutory standards of cultural, demographic, economic and geographic congruity, political factors often play a role in any redistricting process. This process will really come to a head in early fall, but the jockeying already has begun. More immediately, the House debated its proposed state budget during the last week of April, which included further cuts to local aid and reductions in many agency appropriations and programs. Health care costs remain the 800-pound gorilla, due to direct payment for services and employee and pension health care costs. The Senate will consider its budget in late May, and then the leaders will work out a compromise prior to the start of fiscal year 2012 on July 1. Meanwhile, the legislative leadership is moving forward on several major non-budget initiatives. Parole and probation reform are high on the agenda, as evidenced by the fact that the Committee on the Judiciary held public hearings on both issues in March, an almost unprecedented situation. Most Beacon Hill observers believe that resolution of these issues could occur by summer. Health care reform is the other huge and dominating challenge, but substancontinued on page 10

Does your current insurance company see your bank as less sophisticated than it is? No matter what size bank you are, Travelers will never treat you like a second-class citizen. For more than 110 years, our local presence and industry-leading underwriters have combined to offer a comprehensive suite of coverages designed to fit each client’s needs perfectly. Contact your independent agent today to learn more about our Travelers SelectOneŽ for Community Banks, and stop being treated like you are just another mouth at the trough. Š2011 The Travelers Indemnity Company. All rights reserved. The Travelers Indemnity Company and its property casualty affiliates. One Tower Square, Hartford, CT 06183

Legislative Review continued from page 8

tive action, because of its complexity, is not likely to happen until fall at the earliest. Corporate tax policies and incentives could also emerge as high-profile issues given the Fidelity and Evergreen Solar scenarios. And then there’s casino gambling. The Association’s 2011 legislative agenda is simple: first, do no harm; second, clarify a number of corporate governance, operational and procedural issues contained in a comprehensive new bill, H 1209, filed by Rep. Thomas Golden (D-Lowell); and third, advance legislation to address the ongoing problem of bank robberies and adopt the uniform trust code. So, which of the over 5,300 House and Senate bills introduced in midJanuary will impact banks and their customers? While it’s far too early to predict those issues that may dominate the legislative agenda, here are some highlights: • Over 50 bills dealing with judicial foreclosure, mandatory mediation, mandatory rent escrow, requiring lenders to maintain foreclosed properties, and related topics. • Over 15 bills dealing with identity theft, data security and customer privacy. • Nearly 10 bills expanding regulation of debt collectors and all debtcollection activities. • Several bills allowing credit unions to accept public deposits and branch statewide. • Two bills prohibiting a bank from assessing any fee on an individual to cash a payroll check drawn on the bank for a payee who is not a bank customer. • Over 10 bills dealing with credit card rates, fees, practices, etc. • Proposals to restrict overdraft fees to one per day per customer and limit fees charged. • Nearly 10 bills sponsored by 30 legislators to mandate the inclusion of financial literacy concepts in the K-12 math curriculum frameworks in public schools. This list does not include the hundreds of bills affecting the operation 10

of all businesses, such as sick leave, employee records and benefits, corporate tax policies, economic development, etc., in which the Association will be engaged as necessary. Expect a number of public hearings in May and June, but little advancement of bills other than highly visible or essential matters until the fall.

Washington Update This is where the real ball games are being contested. Congress and President Obama did not reach agreement on a federal budget for the current fiscal year until early April. Meanwhile, House Republicans and the president remain far apart on spending priorities for fiscal year 2012 and raising the debt ceiling – a critical issue later this spring. While this big picture is important to setting the nation’s economic future, the banking industry is consumed with far more immediate and pressing concerns. Interchange, implementation of Dodd-Frank, the creation of the Consumer Financial Protection Bureau (CFPB), housing finance, and municipal securities rules, are just a few of the high-profile issues dominating bankers’ time and energy. Clearly, the cap on debit card interchange fees mandated by the Durbin Amendment in the DoddFrank Act is the most visible banking issue in Washington. There are billboards in the Metro area advocating for and against the repeal or delay of the cap, which is scheduled to take effect on July 21. However, the Federal Reserve Board, which is directed to finalize regulations setting the maximum fee, failed to meet its initial deadline. A number of consumer-friendly organizations have now come out in opposition to the price controls, asserting that the legislation is full of unintended, anticonsumer implications. Retailers are fighting back fiercely, trying to retain their ability to increase their profits, with no assurance that any fee reductions will be passed onto their customers. Meanwhile, Congress is considering proposals to alter the gover-

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

nance of the yet-to-be implemented CFPB, from a single regulator to a five-member board and to clarify the language determining which bank employees should register with the Municipal Securities Rulemaking Board (MSRB). The issue with perhaps the most far-reaching implications, and the most challenging to resolve, is housing finance reform. What is the government’s role? Can the private sector be consistent and avoid wild market fluctuations? Are we shifting permanently to more of a renters’ society? The federal agencies have issued for comment a proposed rule that requires sponsors of asset-backed securities to retain at least 5 percent of the credit risk of the securities’ underlying assets, with certain exemptions. The proposal exempts government-guaranteed securitizations and assets, mortgages sold to Fannie Mae and Freddie Mac as long as the government-sponsored enterprises are in conservatorship, and mortgages that meet stringent “qualified residential mortgage” standards. Together, these exemptions cover the vast majority of securitized mortgages. The QRM standards include, among other things, a 20 percent down payment requirement; a maximum loan-to-value ratio of 80 percent for purchase loans, 75 percent for refinance loans and 70 percent for cash-out refinance; specific debt-to-income ratios and credit history criteria; and some servicing requirements. Many fear this rule would greatly reduce home ownership and hurt the already fragile housing market, while the future of the 30-year mortgage remains unclear. These are profound and highly political multi-year questions that go to the heart of our economic challenges. Easy questions, hard answers. Are we ready to play ball, or just kick the can? n David Floreen is senior vice president at the MBA. He can be reached at

09FHL016_7.5x10_commitment_to_NE_r0:Layout 1


2:43 PM

Page 1

A commitment to New England The Federal Home Loan Bank of Boston is a trusted partner committed to the success of your financial institution and the communities you serve. As a reliable provider of liquidity and business solutions to financial institutions across New England, we’re here for the long term—committed to the region’s housing and community development needs. Make the most of your opportunities. Call 1-888-595-8733.

Federal Home Loan Bank of Boston 111Huntington Avenue • Boston, MA 02199 •

Credit for Life

Durfee High School junior Brenna Riley speaks with Paul Mello, vice president of business development at Citizens’ Union.


Fall River Mayor William Flanagan with Durfee students Andrew Ouellette (left) and Olivia Marques (right).

he second annual Credit For Life Fair was held at Durfee High School in Fall River on April 7. The event teaches students valuable financial literacy skills, placing them in the position of 25-year-old adults in charge of mak-

ing their own purchase and daily living decisions. The Credit for Life Fair was originated by Consumer Credit Counseling Service and is the recipient of national awards for its highly interactive exercise in the basics of budgeting and managing

Briana Gomes, a junior at Durfee High School, tries her luck at the “wheel of fortune” at the fair. Shown with Brianna is Jamison Souza of CD-Rec.

credit. The fair is made possible by community volunteers and the following sponsors: Citizens’ Union Savings Bank; Bristol County Savings Bank; Bank Five; Saint Anne’s Credit Union; and Mechanics Co-operative Bank. n

Proven Commitment

to serving Massachusetts financial institutions Stifel, Nicolaus & Company, Incorporated has been serving banks and thrifts for over 40 years. Since 2000: • Managed 484 Public and Private Offerings, raising $58.7 billion in capital • Managed 49 Mutual-to-Stock Conversion Offerings, raising $13.7 billion in capital • Advised in 218 Financial Advisory Transactions, totaling $14.7 billion Over 220 Financial Service Companies under research coverage Large retail and institutional sales distribution channel

The information presented includes transactions effected and matters conducted by Stifel Nicolaus Investment Banking, the Capital Markets Division of Legg Mason Wood Walker, Inc. (acquired on December 1, 2005), Ryan Beck & Co., Inc. (acquired on February 28, 2007), Thomas Weisel Partners LLC (acquired on July 1, 2010), and their respective affiliates. Stifel, Nicolaus & Company, Incorporated and Thomas Weisel Partners LLC are affiliated brokerdealer subsidiaries of Stifel Financial Corp. which are collectively referred to herein under the marketing name Stifel Nicolaus Weisel.


Senior Executive Involvement For more information, contact: Rick E. Maples Head of Investment Banking (314) 342-2038 • Ben A. Plotkin Executive Vice President, Vice Chairman (973) 549-4025 •

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

Michael F. Barry, Managing Director (212) 847-6458 • Mark B. Cohen, Managing Director (212) 847-6438 • Robin P. Suskind, Managing Director (973) 549-4036 •

member sipc and nyse |

Charting a Course to Financial Education by Senators James Eldridge and Barry R. Finegold


oday’s youth are bombarded with a multitude of financial options and responsibilities at an increasingly young age. One out of every three teenagers has a credit card, and even more have an ATM card. Yet many teenagers are ill-equipped to make informed decisions about financial matters. They don’t understand the fundamental principles of money management and how the larger economy works. As a result, teenagers are at a disadvantage when making important first financial decisions: buying a car, taking part- or full-time employment, and using credit cards. New college freshman have an average debt of $1,500 on personal credit cards. Four out of 10 Americans admit they are living beyond their means, primarily because of their misuse and misunderstanding of credit. Americans under 25 are filing for bankruptcy faster than any other age group. At the same time, financial transactions are becoming more and more complicated. As we witnessed with the recent collapse of the housing market, those lacking financial education can be steered into risky loans by unscrupulous lenders. Building on the leadership of former State Senator Sue Tucker, we have filed legislation in the Massachusetts State Senate this session that would integrate financial education lessons into the current math curriculum of all students in the Commonwealth, from kindergarten through grade 12. This will help give our students the tools to chart a course toward strong financial management. The components of the personal financial education program outlined in the bill include: understanding banking and financial services, loans, interest, credit card debt and online commerce; the rights and responsibilities of renting or buying a home;

saving, investing, and planning for retirement. Additionally, the bill creates an advisory committee to investigate and study the development of curriculum and guidelines. We believe that by incorporating this material into the math curricula, there will be a seamless transition for students as they move on from high school to jobs or to college. Ensuring that our graduating seniors are financially literate is critical to the Commonwealth’s economic future. In light of the economic problems facing our nation, we are reminded of how important it is to prepare our children to navigate an increasingly complex financial world. By teaching children the financial education basics in school, we will help

them make educated financial decisions in the future, preventing future bankruptcies, foreclosures, and unmanageable debt. It is our hope that our colleagues in the House of Representatives and the Senate acknowledge the fundamental need for financial education programs and enact “An Act Establishing a Financial Literacy Curriculum” during this legislative session. n Massachusetts Senators Eldrige and Finegold are the lead sponsors of legislation on Beacon Hill, supported by the Massachusetts Bankers Association, that would mandate the inclusion of financial education concepts in the Massachusetts K-12 math curriculum frameworks.

Risk Management & Compliance IT Assurance Audit Nathaniel C. Gravel, CISA, CISM, CRISC Director - Information Security Practice Tel: 978-538-9055 ext. 129 Email:

Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


Private Banking Outsources for Growth By Peter Amato


anks seeking to expand their wealth services business today face growing competition, most notably among broker/dealers. While opportunities for growth exist, one factor can make the difference in positioning private banking for success: the right technology. As the need to enhance core client-facing services grows in importance, so too does the innovative technology required to support those services. To stay competitive and focus on what they do best, many banks are choosing to leverage the external resources of third-party providers.

A Spectrum of Financial Capabilities Clients’ investment needs and preferences help determine a firm’s technology requirements. As today’s sophisticated private wealth investors look to diversify their portfolios, private banks that can accommodate a wide range of asset classes, including alternatives, will enjoy a significant advantage. Besides requiring the appropriate investment expertise, this means that a firm’s technology must also be able to support the functions unique to each asset class. Derivatives, for example, require specialized functions, such as unique accounting rules and collateral management. Similarly, private bankers need to allow for diverse transactions beyond asset types. These might include transactions that require multi-currency accounting, or those governed according to either trade date or settlement date. Open-architecture technology is key to enabling this degree of adaptability, not only for asset classes and transactions that are prevalent today, but also those that may emerge in the future. Moreover, information systems must provide comprehensive drill-down access to a portfolio’s data. 14

Technology can also help private bankers boost their growth strategy by catering to today’s diverse universe of wealth clients. Not only bankers, but their technology as well, should be attuned to the varied service expectations of their individual high-net-worth clientele. Accordingly, wealth managers may wish to tailor their reporting and communication tools to address divergent preferences. For example, clients that seek out greener methods of doing business may opt for online communication only. Some clients may favor interactive reporting and self-service features in managing their retirement accounts. Still others may look for a menu of options for information transfer and updating, ranging from periodic to real-time. The key to supporting and managing all of these activities lies in having the right technology platform. Too often wealth managers depend on their in-house legacy platforms to perform functions for which they may not have been designed, necessitating costly upgrades. By contrast, world-class platforms now feature versatile high-speed straightthrough processing, efficient modular design, access to enormous data storage capacity and flexible interface capabilities to allow for technology add-ons. Yet developing and continuously enhancing the technology to deliver these capabilities can be daunting. Preferring to avoid the distractions of pursuing an in-house strategy, private bankers increasingly view outsourcing as a sensible way to grow their business, expand their service offerings and scale up to compete more effectively. In an important developing trend today, wealth managers are entrusting their middle-

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

and back-office functions to the vast technology services of leading custody banks. Their familiarity with custody arrangements, sensitivity to risk issues and obvious comfort with the banking culture make these organizations strong candidates as third-party providers. In addition, by partnering with an outsource provider to support their technology needs, private bankers avoid the burden of contracting with multiple vendors and the potential pitfalls of integrating data systems. They also have the assurance of access to the most current technology but without the strain on internal resources. As a result, they can sharpen their focus on core activities such as building client relationships, research and investment management. While the benefits to outsourcing are clear, it’s important to keep in mind that selecting a provider is a critical business decision. What defines a provider of choice? A few attributes stand out. Aside from technology resources that represent the highest standards of performance and cross-functional expertise, look for a provider that views outsourcing as a partnership built around its client’s needs, with a proven track record for execution and service. A leading provider also demonstrates financial strength that, besides stability, allows for continuous technology investment. Above all, seek out a provider that knows the value of reliability and trust. n Peter Amato is a vice president in State Street’s Wealth Manager Services Group, and is responsible for the investment management and trust operations outsourcing areas of the business.

A new wrinkle in offering life insurance through your bank.

Fact: Banks that excel at selling life insurance also sell more investments! Vantis Life knows that offering life insurance helps banks build stronger, longer-lasting customer relationships. What’s more, top-tier life insurance banks produce 39% more sales revenue than other institutions across all investment and insurance products..* Founded by banks in 1942, Vantis Life has a thorough understanding of the unique environment of bank-offered life insurance. We offer simple products and streamlined processes with personalized national support. To find out how Vantis Life can offer you a better life experience, call Craig Simms, Senior Vice President, at 860-298-6005 or visit us online at *PrimeVest Financial Services and Kehrer/LIMRA, “Set for Life Insurance: Best Practices from Top-Selling Financial Institutions.” ©2010 Copy available at ©2011 Vantis Life Insurance Company, Windsor, CT. All rights reserved. Vantis Life and A better life experience are trademarks of Vantis Life Insurance Company.




When I’m mobile, keep me movin’ by Jay Fitzgerald

- The Who


fter years of research and development, experimentation and early implementation, the Massachusetts banking industry is now rolling out new mobile-banking products at a fast clip, making 2011 the “breakout year” for the latest tech innovation to sweep over the sector. “You’ve heard about it, you’ve read about it and you’ve closely watched its development and you have say to yourself, ‘OK, it’s not just coming, it’s here and it’s time,’” says Kenneth Simms, senior vice president of marketing at Hudson’s Avidia Bank, which began aggressively rolling out its mobile-banking offerings last year. “Mobile banking is very hot,” says Matt L’Heureux, vice president for product development at COCC Inc., the banking-technology cooperative now charged with developing robust mobile products for scores of its northeast clients. “Quite simply, it all boils down to the prevalence of smart phones and people increasingly living more and more on their mobile devices. And that’s what’s driving all of this.” Already this year, a number of institutions – from TD Bank, with $179 billion in assets, to Avidia Bank, with $1 billion in assets – have announced new mobile-banking products for customers, who many believe will eventually demand mobile-banking options as a required basic service. Other Massachusetts banks are expected to announce their own mobile-banking products for iPhones, Blackberries, Android-run phones and other hand-held gadgets later this year, as COCC and other bank-technology vendors put the finishing touches on their mobile-banking products for bank clients. “Customers expect mobile banking as almost the price of admission,” says Stephen Irish, chief operating officer of Lowell’s Enterprise Bank, which plans to launch “enhanced” mobile16

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

banking services later this year to complement its already deployed early-stage offerings. “It’s quickly becoming an expected option. The more services you have, the more likely you are to retain and attract customers.” Though mobile phones have been around now for years, the rollout of mobile-banking products has taken time, due largely to the initial technological limitations of small cell phones, compared to the more robust capabilities of personal computers, which drove the online-banking innovations and introductions of the 1990s. Many other challenges have confronted the industry as it has tried to grapple with the newfangled technology. Among them, not surprisingly, have been widespread worries about costs, security and other potential problems that initially made banks highly cautious about embracing mobile-banking technologies. But one of the biggest early problems for mobile banking was the simple issue of standardization.

Substandard Technology and Critical Mass In the mid-2000s, when larger banks started to invest in mobile-banking research and development, and later rolled out early versions of mobile products, there were simply too many types of cell phones on the market, making it nearly impossible for banks to develop manageable and affordable software platforms to handle and deploy for customers. Some early mobilebanking initiatives last decade failed, partly as the result of all the variables and complexities involved, industry experts say. But the introduction of Apple’s iPhone in January 2007 changed all of that, as the elegant and easy-to-use touch-screen on the “smart phone” took the mobile-phone market by storm. Consumers loved the iPhone and flocked to it by the millions,

forcing other mobile-phone firms to either adapt or to fall hopelessly behind. They opted to adapt – and quickly. “Until Apple’s iPhone, you didn’t have uniform standards,” says COCC’s L’Heureux. “Now you have [general] standards that the industry can work with.” Today, the smart-phone market is largely dominated by iPhones, Google’s Android-run devices and Blackberries – together offering a manageable “standardization” that the banking industry and other business sectors desperately needed before their mobile-phone channels could really take off. Many people associate mobile-banking products with downloadable “apps,” or software applications specifically designed to let mobile devices interact easily, quickly and seamlessly with banks’ computer systems. But mobile banking actually existed before the recent flood of specialized apps – and those “non-apps” are still heavily in use today. Winchester Cooperative Bank, with $500 million in assets, discovered recently that a large number of its 2,200 online computer customers were simply going to the bank’s website, using their smart phones and enhanced web browsers, and conducting banking business, such as checking-account balances and paying bills, on their mobile devices. “People figured it out on their own,” says Jim Duggan, assistant vice president at Winchester Cooperative, which doesn’t yet have formal smart-phone apps for customers. “They can actually do some of their online banking on their mobile phones as if they’re on a personal computer.” With the right browser-enhancement tweaks, mobile-phone customers can do a surprising amount of their regular online banking via smart phones without specialized apps, bank and industry experts agree. Another non-apps version of mobile banking is use of textmessaging technology. A customer can punch in a simple text code on a cell phone to fetch information – such as a checking-account balance – and get a text message response back within seconds. But most industry experts agree that specialized software apps are the wave of the future, as technological breakthroughs enable more and more bank services to be provided over mobile phones. The bottom line: apps simply provide a more rich and flexible experience to mobile banking – and younger people in particular view them as hip, experts say. So the technological race is on, to both help and impress customers with the most cutting-edge applications. The Starbucks coffeehouse chain is already working with banks to allow customers to effectively use their smart phones as debit cards: by simply waving their smart phones over scanners, their purchases of lattes and blueberry scones are deducted directly from their bank accounts. Industry experts are closely monitoring the possible, if not probable, widespread use of smart phones as direct-payment vehicles. Others see future “social marketing” components for mobile banking, such as alerting people to bank products (say, nofee checking accounts) when a smart-phone holder strolls by a bank branch. In other words, Groupon-like marketing and special discounts may soon be coming to mobile banking. Some banks are moving aggressively to establish themselves as next-generation bank leaders with other features.

Rockland Trust, with $4.7 billion in assets, wasn’t content with merely offering its customers technology that allows them to perform today’s most popular mobile-banking functions, like monitoring account balances, transferring funds within accounts, and paying bills. “We decided to be more innovative,” says Ralph Valente, senior vice president and director of marketing at Rockland Trust. “We wanted to push the envelope.” Working with its tech vendor, Florida’s FIS and its partner mFoundry, Rockland Trust now has a downloadable app that lets customers make check deposits via their smart phones. Using their mobile phones, customers can take pictures of a check and send it off to Rockland’s computer system, which reads the check numbers and records the transaction. The customer can either hang onto the check or void it and throw it away later. “It’s been working,” says Valente of Rockland’s “mDeposit” feature, which was launched in February. “We already have about 500 customers using it. It’s happening on a daily basis. When we started this, our reaction was: How is this going to work? But it is working. It gives us an edge when competing against bigger banks.” FIS, a banking and payments technologies firm that is the parent company to the NYCE payments network operating the Mass. Bankers Association’s SUM surcharge-free ATM program, knows that features like “mDeposit” can become key selling points for many convenience-craving customers – not to mention also offering the ability to enhance a bank’s image as a hip player within the industry. “It’s one of those things that customers, when they use it, say, ‘Wow, that’s great,’” Doug Brown, senior vice president of mobile financial services at FIS, says of Rockland’s mobile checkdeposit feature. “It’s the type of thing that helps bring people into mobile banking.”

The Cost All the fancy technological bells and whistles raise the question about costs, and most banks are hesitant to say publicly how much they’re investing in mobile banking. However, thanks to the early trial-and-error investments in the last decade by large institutions like Bank of America and JP Morgan Chase, it’s now well known that the cost of implementing new mobile-bank channels are coming down – and fast. Intense competition among technology vendors is also putting downward pressures on prices. Today, a small or medium-sized bank can spend anywhere from $30,000, on the low end, to more than $100,000, on the high end, for a suite of mobile-banking features, depending on the size and scope of a planned campaign. A bank can have all three mobile-banking channels – enhanced browsers, text messaging and apps – or just one or two of them. “The cost curve has fallen a lot since 2007,” says FIS’s Brown, who used to head Bank of America’s mobile-banking unit in Charlotte, N.C., before heading to FIS in April 2010. “As it’s become more mainstream, prices are being driven down.” Because of technological improvements and valuable experience gained from early-stage rollouts, the timeline for imcontinued on page 18 Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


Goin’ Mobile continued from page 17

Security Concerns For all banks, large or small, the top pre-implementation subject has not been about potential savings, but about mobile-banking security. What’s to stop

©2011 PULSE

plementing a standard mobile-banking strategy has been cut to as little as three months, from preliminary vendor discussions to actual implementation, Brown says. Bank officials say their internal bank discussions can stretch out that timeline, as different units within an institution analyze and debate a host of issues before approaching technology vendors about making their mobile-banking strategies a reality. “We had been devising our mobilebanking strategy for at least a year,” says Rockland Trust’s Ralph Valente. “We had a very broad approach on how we wanted to market mobile.” In western Massachusetts, Lynn Starr, vice president of systems and operations at Easthampton Savings Bank, says, “It’s been a learning curve as we’ve waited to see what has [technologically] emerged. It’s been a little frustrating. We’ve recognized that our customers want this, but we needed [technology] vendors to be ready. Now they’re finally ready.”

Easthampton, with $880 million in assets, offers browser-based mobile banking for its online banking customers, with the retail-banking component introduced earlier this year. Additional features are expected to come out later this year. Banks are expecting some savings as the result of mobile banking, such as reduced paperwork and less need for human handling of transactions. But many of those electronic-banking savings were already achieved, to a large degree, by the long ago advent of ATMs, debit cards and online banking. The biggest expense associated with mobile banking may simply be the cost of not providing mobile banking to customers, particularly to young consumers, who live and sleep with their latest handheld gadgets and whom many believe won’t bank with institutions if they don’t provide convenient mobile services.


M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

someone from intercepting data as it’s digitally shot through the air to and from banks’ computers? What’s going to stop the next generation of cyber thieves? Bank industry experts say they’ve learned much about security from previous technological innovations, from debit cards to online computer-based banking. While no system is 100 percent foolproof, mobile banking has benefited from prior hard-learned lessons about security. “It’s the number-one cause of concern,” says FIS’s Brown of security issues. “But we believe we’ve come up with a very, very secure system.” Along with a myriad of required user names and passwords, all data is sent in encrypted code, guarding information from being read and analyzed even if it’s somehow intercepted. Each mobile-phone device is also assigned a registration number, allowing authorities to monitor and track banking transactions on specific phones, keeping tabs on unusual activity on devices. Banks also have the ability to remotely disable mobile-banking fea-

tures on devices, in the event of the physical theft of a phone. “All these layers of security add up and are important,” says Brown. John Weinkowitz, head of online strategy and planning at TD Bank, says there’s also an almost counterintuitive component to mobile-banking security. The more people who switch to mobile banking, the more eyeballs there are on accounts, on a daily or even hourly basis. “If anything, customers notice little discrepancies before anyone else,” says Weinkowitz, whose bank rolled out its new Blackberry app in January and a suite of iPhone and Android apps last summer. “Mobile banking actually helps consumers combat fraud.” Easthampton’s Starr agrees that security measures are robust and impressive. “We’re confident about the security of the channel,” she says, but she adds that security threats will be an ever-present concern for mobile bank-




Let us help you • raise capital

• streamline operations

• complete mergers and acquisitions

• contract for business services

• develop new products

• resolve business and regulatory disputes

• manage compliance

Sign up for financial alerts & learn more at 100 Summer St, Suite 2250 • Boston, MA • 617.488.8100

continued on page 20

Our focus has been on debit and debit alone for 30 years. Through our experience we’ve developed training, education and analytical services that can be tailored to empower your financial institution. Our comprehensive professional development tools give you the strategic guidance to thrive in the face of adversity. Profit from our passion. Professional Development

Customer Service


A Discover Financial Services Company

Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


Goin’ Mobile

A TowerGroup study in 2007, when Apple’s iPhone was first unveiled and when it became clear mobile-banking was poised for a huge industry breakout, predicted that 30 percent of online-bank consumers in the United States would be using mobile banking by 2012 – while an additional 25 percent of nononline bank consumers would directly jump to mobile banking, with no onlinecomputer banking stops in between, by the end of next year. Total mobile-banking consumers: 40 million.

continued from page 19

ing, as they are for online computerbased banking, debit cards and even old-fashioned bank branches. “We need to be constantly vigilant. The bad guys are still out there. I expect them to start ramping up their [mobile-banking] activity very quickly.” Cost and security concerns aside, bank officials say it’s now inevitable that mobile banking will spread, likely on a massive scale.



EW t N




n phe Ste by Karam R.

a en is aram Steph ipal of K up Princ cial Gro , er Finanhis fath . with t Karam er Rob



ra ew e gan is terin ment. It n e e ar ge s e, we lio mana portfolio RA d a E c I de tfo EW new e por n of BOL rited c is n h a t r e AN su of sio inh start life in id expan manage t the -owned p . to s a ra nk ling rriers help of ba hat follow ks strugg ferent ca e, to at an dif spac ualified d k n an er s many b ed from a b n q evolve y o it n s a n a d as an mu at h rch com benefit BOLI h be ne th se pu to t and o os, or tho offse fferings.” at needs ank ed to ol us s li rb n o sset th o to e f la t roup e th r p v le o po cial G an a like ut ru ffecti e ss




into ed just m Finan to tax-e rnings, b I are g ag L I is a ea man and Kara ontinuin and BOL ce bank se of BO . c cts s u n y a e a assets pt pace, to produ le in th enh ed g s e e in s k th s al ro ity of rn has sa a vit acce il gove complex quire ant vide at play profitab re ro re t o p m es th men and nific ervic erations rs. nage and sig , s a m e re p k folio skill sets structu bank the o and ban Port a , vide y s ty of ts in infr security rs bank ilit to pro varie n ta ea le is ed capab oose stme y and da everal y al of ro e t v a h s c in s g of th h increa s must rincip that, nolo Part tech ements aram, P to form ility Bank ts wit K ir k , clien exibility. ve the ab hly requ d Steve l Group nce Ban a fl le and rs that h eliver hig t can ancia Renaissa veral ago, o a d se h m Fin vend ign and ducts th tion. Kara nce wit invested CPADS es ia pro d ll puta n A e a v to B ig an titi .R k’s re des tion e rs n p a o to b m is l e co Adv n dollars ministra ckage ancia ort th d o a supp m Fin elivering milli t Plan A robust p ity d t Kara n il r tha itted to post-sale y (Clie ). It is a efit liab analysis a le c m n n omm nce and speciall It is Syste et and be centratio ting e a p is c n s n Grou ise, guid mes, but nd of as nting, co d accou ustry. a rt ti n d u expe es at all of BOLI heir acco ther tax a to the in esigned ic T ra e d , o t. rv e u e n e d s w e v iq an ne ha ess un em nk clients c y g is rt a e ro o n th p in t ba supp ionally, th ssment o ma nds e e rtfoli of curren f thousa w rmin I it s o s d te p a d e L A d list ns o Ne priety anks ir BO long serve te ughout ny. a pro helps b ss of the o ro h h e whic idents th as testim whic ectiven s e ff re t rv e n f e o the d, s urre e . n s c g la e in u Eng hold “In th e contin that, ded nment, w the m ad o in Kara ial envir r BOLI c finan a need fo e to se

FOR FULL STORY, please visit







Seco S n



nd Q




Stephen R. Karam Stephen is a Principal of Karam Financial Group with his father, Robert Karam. Their concentration is in the conceptual design, funding and administration of executive benefit programs and other qualified plans with a concentration in banking and not-for-profit institutions. Karam Financial Group • 456 Rock Street Fall River, MA • •

Securities offered through LPL Financial Member FINRA/SIPC


M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

The Future COCC’s Matt L’Heureux says one simple fact convinces him that mobile banking is the wave of the future: The sale of smart phones is expected to soon outstrip the sales of desktop and laptop computers combined. The ratio of smartphone users to desktop/laptop users is even more pronounced among young people, who often view desktops and laptops as merely devices to play videogames on or to watch Netflix movies. Though Apple’s hugely popular iPad tablets aren’t smart phones, the banking industry is already moving to develop iPad and other tablet apps for customers, to add those users to a new variation of mobile banking. “Looking ahead, we see mobile banking exceeding online computer banking within three to four years,” says FIS’s Brown. “It’s a phenomenon that’s going to prompt people to shift banks if they don’t have it.” Banks are being a bit more modest about their predictions about the future of mobile banking, but they have no doubt it’s simply going to be a huge component of their business, combined with online banking, ATMs, debit cards and bank-branch services. Though hesitant about publicly releasing their short-term and long-term projections, some banks report that 10 to 20 percent of their online-banking customers are already regularly using mobile-banking features. “We see mobile banking as a major channel among many of our channels,” says TD Bank’s Weinkowitz, whose bank spans 15 states, with 154 branches in Massachusetts. “Our mobile channel will complement other services, including branches. The branches are more service orientated and will remain very important moving forward.” Rockland Trust’s Valente agrees that mobile banking is part of the future equation, and is more than just the latest technological trend to hit the banking industry. “We see mobile banking as a necessary technology because people, through all age groups, now rely on cell phones and carry them everywhere,” he says. “They don’t leave their home without their phones. They just want information and convenience.” n

Your growth is our number one priority. To succeed in today’s wealth management marketplace, you need a clear competitive advantage. State Street’s Wealth Manager Services group delivers flexible, comprehensive solutions tailored to meet the unique needs of trust companies, private banks, wealth management firms, family offices and registered investment advisors. Whether you’re looking for a custody-only solution or to outsource all of your non-core activities, our industry-leading tools and support can help you deliver more superior client service, streamline your operating environment, reduce your costs and gain the scale you seek in virtually any market. At State Street, we know that building your business is your first priority — because it’s ours, too. For more information, please contact Peter Thurmond at +1 617 664 6676 or

State Street Global Services is the investment servicing business of State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors.

©2011 State Street Corporation 11-0002-2664-0411

OntheMove Sabina Barresi

Kevin O’Donnell

Tim MacDonald

James Doyle

Alison Benz Czuchra

Levin Waters

Robert Jenkins

Cathleen Lee

Monica Spach Curhan

Richard Hayward Jr.

Linda Midura

Diane Jordan

Michael Carroll

Bozena Dabek

BANKERS’ BANK NORTHEAST – Hires Michelle Orsini, operations officer and client services manager; Megan Desso, enterprise risk manager; and Sabina Barresi, vice president and relationship manager.

CHICOPEE SAVINGS BANK – Hires Robert Jenkins, vice president, and Cathleen Lee, branch officer.

HAVERHILL BANK – Promotes Denise Joslin, human resource officer, and hires Asaad Faquir, compliance officer.

CITIZENS-UNION SAVINGS BANK – Promotes Monica Spach Curhan, first vice president and marketing director.

MECHANICS COOPERATIVE BANK – Promotes Deborah Grimes, executive vice president.

CLINTON SAVINGS BANK – Hires Richard Hayward Jr. , senior vice president, chief financial officer and treasurer, and Linda Midura, vice president.

MERCANTILE BANK – Promotes Marven Joseph, commercial lending officer, and Matthew Verhamme, commercial credit analyst.

BRISTOL COUNTY SAVINGS BANK – Hires James Doyle, vice president and business development officer.

DEAN BANK – Promotes Keri Brown, operations officer, and Diane Jordan, branch manager; hires Michael Carroll, marketing and communications manager.

MONSON SAVINGS BANK – Promotes Lena Buteau, assistant vice president, and hires Steven Lowell, president.

CAPE COD COOPERATIVE BANK – Hires John Fulone, chief marketing officer and William Riseley, chief commercial loan officer.

EASTHAMPTON SAVINGS BANK – Hires Bozena Dabek, senior vice president and chief financial officer, and Susanne deVillier, branch manager.

CAPE COD FIVE CENTS SAVINGS BANK – Promotes Bonnie Loedel, chief fiduciary officer; Elizabeth Thompson, trust officer; hires Alison Benz Czuchra, vice president, senior trust and estate officer; Erik Porter, director of accounting and finance; Levin Waters, commercial loan officer; Melanie Sabin, senior credit analyst.

FRAMINGHAM CO–OPERATIVE BANK – Hires Brien Maginnis, vice president and controller.

BERKSHIRE BANK – Promotes Tami Gunsch, senior vice president and Kevin O’Donnell, assistant vice president. BOSTON PRIVATE BANK & TRUST COMPANY – Hires Tim MacDonald, senior vice president and chief risk officer.


GEORGETOWN SAVINGS BANK – Hires Alan Johnson and Barbara Dyment, account executive and mortgage originators.

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

MUTUAL BANK – Promotes Adrianne Bearse, branch manager. NORTH SHORE BANK – Promotes Lisa Chochrek, appraisal officer; Lisa Morrissey, assistant manager; Dawne Studzinski, senior accountant, and hires Peter Malinowski, vice president, and Steve Sylvestre, assistant manager. PEOPLESBANK – Hires Tammy Bordeaux, assistant vice president and branch manager; Amybeth Perry, branch officer; and Kate Reagan, mortgage consultant.

Susanne deVillier

Brien Maginnis

Denise Joslin

Asaad Faquir

Deborah Grimes

Marven Joseph

Matthew Verhamme

Steven Lowell

Tammy Bordeaux

Amybeth Perry

Melanie Whitney

Meghan Fresta

Jeffrey Sweet

Linda Hadwen

Curtis Cogliano

Tracy Dunn

Jeffrey Worth

Robert Harvey

Patricia Urbano

Mandy Constantineau

Christina Sousa

ROCKLAND TRUST COMPANY – Hires Laurie Burkhardt, vice president and director of portfolio management; Melanie Whitney, senior accounting officer; Meghan Fresta, portfolio risk officer; and Michael Zajac, quality control and compliance manager. SALEM FIVE BANK – Hires Jeffrey Sweet, senior vice president; Karen Barter, business development officer; Linda Hadwen, loan officer; and Curtis Cogliano, market manager. SCITUATE FEDERAL SAVINGS BANK – Hires Tracy Dunn, commercial credit analyst. STONEHAM SAVINGS BANK – Promotes Jeffrey Worth, executive vice president and chief operating officer. TD BANKNORTH – Promotes Robert Harvey and Patricia Urbano, regional vice presidents; Mandy Constantineau, portfolio loan officer; Christina Sousa, Gail Goossens and Marius Dehelean, relationship managers; Mary Test, Lindsay Walsh and Anabela Blake, store managers; and hires Angela Miele, vice president and commercial relationship manager; Christopher Koenig, vice president and relationship manager; Jeffrey Bayard, vice president and portfolio manager; Eugene Amato Jr., small business relationship manager; Stephen Kotsios, portfolio loan officer; and Bill Lau and Sal Buonacore, store managers.

THE CO–OPERATIVE CENTRAL BANK – Hires Andrew Calamare, executive vice president.

Professional facilitation enhances the productivity and success of your meetings. Whether you are addressing board governance issues, balance sheet strategies or strategic planning a knowledgeable, objective facilitator is a valuable resource and a sounding board.

THE SAVINGS BANK – Hires Matthew Kelleher, senior mortgage originator.

continued on page 24

a uling d e h u sc nt A r e yo m a n a g e m e or b o a rd tional educ a g ic session e t or stra the bank’s ly ng p o s s i b a rd p l a n n i o b ye a r l y t? re t re a

Call a firm with experience in governance, ALM & community bank strategic planning. Jim Clarke understands community banking, mutuality, and the New England market as well as any bank consultant – he has worked with New England bankers for 25 years. He can develop programs customized to your bank’s specific needs and assist you in addressing the critical issues facing community banks in the current environment.

Jim Clarke, Ph.D. Clarke Consulting 610-688-9466

Call today for 2011 or 2012 meetings! Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


OntheMove Marius Dehelean

Mary Test

Anabela Blake

Angela Miele

Christopher Koenig

Jeffrey Bayard

Bill Lau

Andrew Calamare

Matthew Kelleher

Christopher Currie

Pamela Simpson

Nicholas Helides

Kazimierz Borawski

Paul Vallace

UNIBANK – Hires Christopher Currie, branch manager. UNITED BANK – Promotes Pamela Simpson, commercial banking officer; hires Nicholas Helides, senior vice president; and Kazimierz Borawski, vice president.

WALPOLE CO–OPERATIVE BANK – Hires Paul Vallace, vice president, commercial and construction loan officer. WEBSTER BANK – Promotes Paul Mollica, president (Boston region).  n

Photo Submissions:

Submit photos and text for consideration for inclusion in Massachusetts Banker to Barbarajean Adams at bjadams@ Photos must be full color, high resolution (300 dpi or higher), at least 1200 by 1800 pixels (4 by 6 inches) and have a file size of approximately 1 MB, or they may not be useable. In the caption, first describe what is happening in the photo and then list all of the people, from left to right. (Unless it is a head shot.) Copy submissions without photos are also welcome.

Lenders, take a closer look In a side by side comparison with an FHA loan, MassHousing’s RightRate Mortgage saves low- and moderate income borrowers money on their monthly payments and over the life of the loan. For low- and moderate- income borrowers in Massachusetts, the choice is clear.



M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

Visit for more details.

Chairman’s Column continued from page 4

ride, but the people who surround you make it much easier.) As I ride into the sunset, or more accurately back to my office in Auburndale, I thank all of you for the support, guidance and direction you have given me, especially the MBA staff. I hope that I adequately returned the favor. To all of our MBA members I say, it has been my supreme honor to serve as your chairman and, despite the many challenges that our industry faced, I will always look back on my tenure as your chairman with fond memories. There you have it – more change.n Ken Brennan is chairman of the Massachusetts Bankers Association and president and CEO of The Village Bank, Auburndale. He can be reached at kbrennan@


morE. ith

GEt morE w


It’s more than just a word. It’s what happens when a firm has served financial institutions for over 40 years. We understand your business. Co-operative Banks Savings Banks Credit Unions Mortgage Companies and Brokers Retail Finance Companies

Financial statement audits

Regulatory issues consulting

BSA/OFAC validations

Tax compliance and planning

ACH audits

Employee benefit plans

IT risk assessments

Thomas J. O’Connor, CPA Director of Financial Institution Services 424 Adams St. Milton MA 02186 617.696.8900

Business challenges can be unpredictable and surprising. We make it our business to help clients stay ahead of the game and anticipate trends rather than react to them. For more than a century, Nutter has been providing its clients with the industry insight, legal experience and dedication they need to turn business opportunities into realities. If you expect high quality, forward-thinking legal counsel, find out more at


Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r



BERKSHIRE BANK – Donates more NEWBURYPORT FIVE CENTS than $817,000 to various non-profit orga- SAVINGS BANK – Donates $700,000 to nizations. area community organizations. BRISTOL COUNTY SAVINGS BANK – Donates $5,000 to Children’s Friend & Service; $2,000 to Gateway Healthcare; $10,000 to Highlander Dunn Institute; $2,500 to Pawtucket Arts Collaborative; $5,250 to Pawtucket Business Development Corporation; $2,500 to Rhode Island Minority Elder Task Force; $2,000 to Shea High School; $5,000 to The Community Foundation of Southestern Massachusetts; and $7,500 to The Zeiterion Theatre.

ROCKLAND TRUST COMPANY – Donates $5,000 to South Shore Housing Development Corporation; and $2,500 to the Girl Scouts of Eastern Massachusetts. ROLLSTONE BANK & TRUST – Donates $10,000 to area food pantries.

SALEM FIVE BANK – Donates a total of $25,000 to 25 various non-profit organizations; $6,000 to St. Joseph’s Food Pantry; $6,000 to Salem YMCA; $6,000 to CITIZENS-UNION SAVINGS BANK – Wellspring House; and $6,000 to Spectrum Donates over $8,000 to various non-profit Adult Day Health Program. organizations. THE VILLAGE BANK – Donates a total FRAMINGHAM CO–OPERATIVE of $15,000 over three years to the Newton BANK – Donates $5,000 to the American Cultural Alliance. Cancer Society and Ovations for a Cure. UNITED BANK – Donates $88,118 to INSTITUTION FOR SAVINGS – the United Way. Donates $760,000 in 2010 to various nonprofit organizations. WEBSTER FIVE CENTS SAVINGS BANK – Donates $3,000 to The Bridge of MECHANICS COOPERATIVE BANK – Central Massachusetts. Donates $300,000 to Southcoast Centers for Cancer Care; $10,000 to the Fall River United Way.

The Community Bank’s Suzanne Fernandes, vice president and regional retail administrator, right, presents a check in the amount of $500 to Michael Molyneux, executive director of the The Charity Guild in Brockton to support its food pantry.

THE VILLAGE BANK’s Community Relations Officer Susan Paley, left, presents a check in the amount of $1,500 to Lisa Vasiloff, executive director of Birthday Wishes, to provide birthday parties for homeless children.


BOSTON PRIVATE BANK & TRUST COMPANY donates $5,000 to Horizons for Homeless Children to support its educational programs. Pictured, from left: Torrance Childs, senior vice president and director of sales, Boston Private Bank & Trust; Asa Fanelli, president and CEO, Horizons for Homeless Children; George Schwartz, executive vice president, COO and treasurer; Kathleen McQuillan, senior vice president, Boston Private Bank & Trust; Meryl Sheriden, chief development officer; and Katherine Carroll-Day, director of corporate and foundation relations, Horizons for Homeless Children.

ROCKLAND TRUST COMPANY donates $3,500 to the Medfield Coalition for Public Education to support its sixth Annual Spelling Bee. Pictured, from left: Susan Gorog, grant committee liaison, Medfield Coalition for Public Education; Cheryl O’Donnell, branch manager, Rockland Trust Company; and Susan Weisenfeld, co-president, Medfield Coalition for Public Education.

M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

COMMERCE BANK’s Senior Vice President John Kelley, right, presents a check in the amount of $4,100 to Marine Gunnery Sergeant Mark Luby of the 25th Marine Regiment at Fort Devens, representing the bank’s donation to the 2010 Worcester County U.S. Marine Corps Reserve Toys for Tots program.

MECHANICS COOPERATIVE BANK donates $2,500 to Preparatory Rehabilitation for Individual Development and Employment, Inc. (PRIDE) to support its capital campaign. Pictured, from left: Joseph Amaral, vice president, Mechanics Cooperative Bank and board member, PRIDE, Inc.; Joseph Baptista Jr., president and CEO, Mechanics Cooperative Bank; and Jeffrey Hunt, board member, PRIDE, Inc.

ROCKLAND TRUST COMPANY donates $10,000 to the United Way of Greater Plymouth County to support its programs. The bank’s donation is in addition to the $157,000 raised by the bank’s employees in their annual United Way giving campaign. Pictured, from left: Rick Nolls and Dennis Carmen, United Way of Greater Plymouth County; Jim Smith, regional branch manager; and Chris Oddleifson, president and CEO, Rockland Trust.

FRAMINGHAM CO-OPERATIVE BANK donates $3,000 to Programs for People, Inc., to support its on-site work program for low-income people recovering from mental illness. Pictured, from left: Rachel Stewart, administrative director, Framingham Co-operative Bank Charitable Foundation; Iris Carroll, director, Programs for People; and Ed Hebert, manager, Lunch Box Program.

FRAMINGHAM CO-OPERATIVE BANK donates $5,000 to Buddy, the Humane Society’s mascot, in support of the society’s mission to give homeless animals “a new lease on life.” Pictured, from left: Bob Lamprey, CEO, Framingham Co-operative Bank; Arlene Lamprey, holding Poppi; Rachel Stewart, assistant vice president of marketing; Erin Stelmach, adoption counselor; and Buddy.

The benefits that only come with experience. Actuarial and Benefits Consulting | Investment Advisory Service | Defined Contribution Services

COMMERCE BANK donates $64,189 to the United Way of Central Massachusetts to support its many programs. Pictured, from left: Commerce Bank Senior Vice President Michael Roy; United Way Assistant Vice President Lynne Feraco; Commerce Bank President and CEO Brian Thompson; Campaign Chair Nicole Sabatini; and United Way President and CEO Timothy Garvin.

Contact Richard Sych, FSA, Senior VP 860.521.8400 | 4.75x4.75_MassBanker_v2 approved.indd 2


Steps TO

9/22/10 7:20 AM


Bank Compensation Governance

FRAMINGHAM CO-OPERATIVE BANK donates $5,000 to the Natick Visiting Nurses Association to support the MetroWest Meds Program. Pictured, from left: Judith Boyko, CEO, Natick Visiting Nurses Association; Susan Moriarty, director, MetroWest Meds Program; Michael Bilinsky, assistant vice president and business development officer, and Nancy Devine, vice president, Framingham Co-operative Bank.







Bank Regulatory Safety and Soundness Examinations continue to focus on Board Compensation Governance, Board Fees, Executive Salaries, Incentive Compensation, Benefits, SERPs and Perquisites

“ I work in partnership with more than 100 community banks in 12 states to identify compensation issues and develop practical solutions.”

Arthur Warren, Esq.

Compensation and Benefits Advisor NORTH SHORE BANK donates $1,000 to the Peabody Education Council to support their funding of teacher-initiated and requested enrichment programs that fall outside of the school department’s budget. Pictured, from left: Patricia Schaffer, the Peabody Education Council; David J. LaFlamme, president and CEO, North Shore Bank; and Peabody Mayor Michael J. Bonfanti.

Arthur Warren Associates 1600 Boston-Providence Highway Walpole, MA 02081 508-660-0280 | |

Second Quarter 2011 n M a s s a c h u s e t t s B a n k e r


GoodNeighbors continued from page 25

ROCKLAND TRUST COMPANY’s Regional Branch Manager Lenore Tavares, right, presents a check in the amount of $5,000 to Rob Mendes, executive director of the Boys & Girls Club of New Bedford, to help with the maintenance and upkeep of the club’s 15-passenger van.

WEBSTER FIVE CENTS SAVINGS BANK donates $5,000 to NeighborWorks HomeOwnership Center of Worcester to expand education for current and prospective homeowners in Worcester County. Pictured, from left: Miguel Rivera, director, NeighborWorks HomeOwnership Center of Worcester; Karen Kempskie-Aquino, vice president; Susan Simeone, vice president; and Rich Leahy, president and CEO, Webster Five Cents Savings Bank.

WEBSTER FIVE CENTS SAVINGS BANK donates $2,000 to the Center for Women & Enterprise to support a range of financial literacy, business planning and entrepreneurship training programs for low to moderate income women in the greater Worcester area. Pictured, from left: Susan Rittscher, president and CEO, Center for Women & Enterprise; Karen Kempskie-Aquino, vice president, Webster Five Cents Savings Bank; Ivette Olmeda, program manager, Center for Women & Enterprise; and Rich Leahy, president and CEO, Webster Five Cents Savings Bank.

BRISTOL COUNTY SAVINGS BANK donates $1,500 to Amvet Boulevard School for its technology equipment used to assist with daily instruction in the areas of math and science. Pictured, from left: Third grade students Michael Hulbig, Saketh Uppuluri, Tyler Packer, Michael Trask and Avery McMorran.

ROCKLAND TRUST COMPANY donates $5,000 to the Brockton Neighborhood Health Center (BNHC) to support its services and programs to low-income and marginalized populations in the greater Brockton area. Pictured, from left: Melvin E. Benson, chief financial officer; Susan Joss, chief executive officer, Brockton Neighborhood Health Center; and Stephen Hutcheson, commercial lender, Rockland Trust.

THE VILLAGE BANK’s President and CEO Ken Brennan presents a check in the amount of $10,000 to Ruth Barnett, president of Newton Community Pride, to sponsor and promote the arts, culture, volunteerism and beautification in Newton. n


M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

FINANCING THAT HELPS CREATE JOBS. And feed the local economy.

Kayem Foods has been satisfying New Englanders’ appetites since 1909. To keep up with demand, the company used a $6.5 million tax-exempt


bond from MassDevelopment to purchase new equipment, increasing production and leading to 25 new jobs. It’s just one of the many companies


benefiting from our dedicated staff, creative financing, and flexible terms. See how we can help you.


Go to or call 800-445-8030 today.



DATE: 3/29/11




JOB: 11-MD-010 TRAFFIC: Jacki

77 North Washington


2011 MBA Calendar Dates are subject to change. Announcements are mailed approximately six weeks prior to event. For additional information, contact the education department at 617-523-7595. Visit our website at:



Fundamentals of Credit Analysis-Introduction to Commercial Lending Part 8: The Carlton Polish

Company Case Study: Preparation and Discussion – Marriott Courtyard Hotel, Marlborough


Accounting 101 Part 2 – Marriott Courtyard Hotel, Marlborough


Flood Insurance Seminar – Marriott Courtyard Hotel, Marlborough


CFO Forum – Middlesex Bank Training Center, Westborough


The New England School for Financial Studies,

Freshman Class – Babson Executive Conference Center, Wellesley


Fundamentals of Credit Analysis-Introduction to Commercial Lending Part 9:

Concepts of Corporate Finance – Marriott Courtyard Hotel, Marlborough


Call Report Seminar – Marriott Courtyard Hotel, Marlborough



The Velocity of Change 30th Annual New England Bank Retail Technology/Retail Banking

Conference & Exhibit – Holiday Inn Boxborough Woods, Boxborough


The New England School for Financial Studies,

Senior Class – Babson Executive Conference Center, Wellesley


Charitable Foundation Golf Tournament – Worcester Country Club


Fundamentals of Credit Analysis-Introduction to Commercial Lending Part 10:

Carlton Polish Case Study-Valuing a Business; Warning Signs

and Problem Loans – Marriott Courtyard Hotel, Marlborough


Telephone Collection – Marriot Courtyard Hotel, Marlborough


Emerging Leaders – Marriot Courtyard Hotel, Marlborough


Global Cashflow – Marriot Courtyard Hotel, Marlborough


Branch Managers 4 – Marriot Courtyard Hotel, Marlborough


Executive Officers Conference – Cranwell Resort, Lenox

list of Advertisers

The advertisers in Massachusetts Banker make this magazine possible. Please recognize their contribution and consider their services when needed.

Arthur Warren.............................................27

DRL Architects...........................................32

Clarke Consulting.......................................23 Federal Home Loan Bank of Boston.......11

First Data.....................................................02

GraVoc Associates.....................................13

G.T. Reilly & Company..............................25

Hooker & Holcombe..................................27

John M. Floyd & Associates......................05

ICS Compliance..........................................28

Integrated Security Group.........................31

Karam Financial Group.............................20

Magee Company.........................................07



Annual Bank Compliance Academy – Marriott Courtyard Hotel, Marlborough


New England Conference – The Mount Washington Resort, Bretton Woods, NH



Nutter, McClennen & Fish.........................25


Annual Security Seminar – Marriott Courtyard Hotel, Marlborough



CFO Forum – Middlesex Bank Training Center, Westborough


CFO Forum – Middlesex Bank Training Center, Westborough


Annual Two-Day BSA Workshop – Doubletree Hotel, Westborough


CFO Forum – Middlesex Bank Training Center, Westborough

State Street..................................................21


Pierce Atwood LLP....................................19


Stifel, Nicolaus & Co..................................12


Event Spotlight: June 2

The Velocity of Change 30th Annual New England Bank Retail Technology/Retail Banking Conference & Exhibit

Holiday Inn Boxborough Woods, Boxborough


M a s s a c h u s e t t s B a n k e r n Second Quarter 2011

VantisLife Insurance Company................15

Massachusetts Banker 2Q 2011  

Cover story: Mobile banking in the age of the iPhone; Credit for Life Fair introduces students to saving; Massachusetts bill that would requ...

Read more
Read more
Similar to
Popular now
Just for you