Banking New England July/August 2014 by The Warren Group

JULY/AUGUST 2014

INSIDE: THE BANK SUMMIT: A CONFERENCE FOR FINANCIAL PROFESSIONALS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

Banking on

Wealth

Management Smaller Banks Venture into Wealth Planning

PLUS: OPTIMIZE THE MULTICHANNEL EXPERIENCE DEPOSITORY BANK NOT LIABLE IN KITING SCHEME REVERSE MORTGAGE COUNSELING UPDATE

A P UBLICATI O N O F TH E WAR R E N G R O U P

Your building, your vault, your money and your people: Protect them all. At the heart of every community is its bank. And at the heart of every bank are its people. That’s where our coverage starts, but it extends so much further. In one comprehensive package, we provide community banks with everything from traditional property and casualty to management liability insurance. The right policy is still only one part of your insurance carrier’s value. Travelers partners with you to help educate your bank on emerging and potential risks, and provides tools and solutions to better prepare your bank for the future. Contact your independent agent today.

travelers.com © 2013 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. The Travelers Indemnity Company and its property casualty affiliates. One Tower Square, Hartford, CT 06183

LETTER FROM THE EDITOR

Banking on Sustainability Christina P. O’Neill Editor, Banking New England

mall to midsized banks are increasingly entering the wealth management arena in order to increase and retain their customer base, as you will see in our cover story this issue. As one of the banks in the article points out, its staff has always had wealth-management conversations privately, but in creating a division, they can now say it in public. Admittedly, this isn’t for every retail customer. Two of the three banks in the article indicate that the minimum amount they’d manage is $500,000 or above and that these assets should be above and beyond the value of the client’s home(s). That makes investment sense – a house isn’t a liquid asset and its value can be volatile, as millions now know. This only shows the radical change in mainstream financial assumptions that has occurred over the last three decades. When the stock market was frothy, individuals plunged in

as electronic trading developed and took off. The viral video e-Trade talking baby commercials that ran from 2008 to early this year were extremely hip, funny and brilliantly video- and soundedited. But they probably wouldn’t have exerted such a strong tug on their target audiences if investors hadn’t secretly felt like babes in the woods. That’s where today’s bank clients need to talk to real people who make commonsense recommendations based on knowing the client’s entire financial picture. The model of financial advisement is changing, and, we hope, for the better. One of the bankers interviewed says he talks to people in their 20s and, looking back, wishes he’d had similar advice when he was their age. Let’s hope that his sensibilities allow the advisement model to be pushed down to asset brackets that are modest now, but could be cultivated over a longer timeline. BNE

MassHousing Mortgage Insurance on Non-MassHousing Loans—it’s back! With a new reinsurance agreement in hand, MassHousing is back with $10 billion in mortgage insurance capacity and looking forward to creating innovative and responsive CRA programs using its insurance with bank portfolio loans. Our MIPlus™ with unemployment benefit protection can help community banks create a compelling CRA program in their market. Call your MassHousing Business Development Officer for more details.

www.masshousing.com/lenders

BANKING NEW ENGLAND

Truth is...

you can learn a lot from your customers. Tap into the power of daily, in-depth client data to improve your service and boost your bottom line. DataPak, exclusively from Cetera Financial Institutions, gives you control over an unmatched breadth of client data whenever you need it. Pull data directly into your current systems and use it to give your clients better insight into their finances. Measure the success of your program and uncover opportunities to deliver enhanced solutions for clients. Benefit from this leading technology, along with access to our award-winning wealth management solutions, all backed with the scale and resources from our parent company, Cetera Financial Group. It’s the competitive advantage that your program needs. Explore the possibilities at www.ceterafinancialinstitutions.com or contact Sean Casey at 1.800.245.0467, ext. 65014.

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

A PUBL ICAT ION OF T HE WA RRE N G ROUP

CONTENTS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

EFFECTIVE ERM

The Top Three Things You Need to Know to Build an Enterprise Risk Management Program

MARKET STRATEGY

MONEY ORDER MADNESS

Depository Bank Not Liable in Kiting Scheme

SETTING A PRECEDENT

Security is a Two-Way Street

LEGISLATIVE UPDATE

Reverse Mortgage Industry Dodges Bullet

THE BANK SUMMIT

COVER FEATURE

Optimizing the Multichannel Banking Experience

Conference for Financial Professionals to Deliver Insights, Strategies for Success

BANK PROFILE

Meredith Village and Merrimack County Savings Bank: Stronger Together

Banking on

Wealth

Management

CORRECTION: 22

COMMUNITY GOOD WORKS

PERSONNEL FILE

IN CASE YOU MISSED IT

The Bank Profile of BankNewport in the May-June issue of Banking New England incorrectly identified BankNewport as the top Small Business Administration (SBA) lender last year in Rhode Island. BankNewport was the top 504 SBA lender in Rhode Island; Bank of Rhode Island was the top overall SBA lender. TWG STAFF CEO & PUBLISHER Timothy M. Warren Jr. PRESIDENT David B. Lovins

www.thewarrengroup.com ©2014 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

Interested in receiving additional copies of Banking New England? Call 617-896-5307 or email custompubs@thewarrengroup.com

EDITORIAL EDITORIAL DIRECTOR Cassidy Murphy CUSTOM PUBLICATIONS EDITOR Christina P. O’Neill ASSOCIATE EDITOR Anna Sims SALES DIRECTOR OF BUSINESS MEDIA George Chateauneuf PUBLISHING GROUP SALES MANAGER Rich Ofsthun ADVERTISING ACCOUNT MANAGERS Claire Merritt, Bob Holzhacker and Michael Lydon CREATIVE/MARKETING DIRECTOR OF MARKETING & CREATIVE SERVICES John Bottini MARKETING COMMUNICATIONS MANAGER Nicole Patti DESIGN PRODUCTION MANAGER Scott Ellison GRAPHIC DESIGNERS Amanda Martocchio, Tom Agostino and Tyler Grazio

BANKING NEW ENGLAND

EFFECTIVE ERM

The Top Three Things You Need to Know to Build an Enterprise Risk Management Program BY L. RANDY MARSICANO Randy Marsicano is the manager of professional services at WolfPAC Integrated Risk Management, a secure, web-based enterprise risk management solution used to automate the identification of risks, threats and control gaps.

RANDY MARSICANO

ommunity-based financial institutions are facing big challenges today. There are more compliance and risk management processes, policies and regulations present than ever before, while the environment grows more competitive. By following three basic principles that cover operation, finance and governance, your institution can create and implement an effective and efficient enterprise risk management program that can stand up to today’s challenges. Getting the ball rolling starts with looking at how your people are working to assess and mitigate risk. Effective risk management relies on teamwork, which means overcoming silos. The people and departments in your financial institution must be committed to enterprise risk management, working together to identify and mitigate risk and eliminating silos. One way to create an enterprise-wide view of risk is to structure your approach as a bottom-up risk management program. That means starting with the technologies, vendors and functions used in each of the products and services you offer. Once you have this inventory, you can be effective in performing risk assessments across functional areas and weigh the risks and controls using common criteria. Now, you can optimize efforts to allocate control resources, conduct control testing and align management’s expertise to develop risk mitigation strategies for the entire institution.

Your Risk Assessment Costs

A simple rule of thumb for risk management is this: If you can measure the cost of risk management, you can make it cost less. There are several ways to measure the cost of risk management. You can start with the hard costs like facilities, equipment and technology vendors and consultants, but don’t forget about the soft costs of people’s time. A common approach here is to take an average hourly rate for a mid-level or grade of managers, and add to it an hourly component that includes administrative costs, benefits, taxes and other costs directly linked to the cost of the employee. This “fully loaded” hourly rate can be applied to the hours a resource spends on risk management to produce a soft cost of that resource. Once you have this soft cost, you can determine the fully loaded costs of time spent on internal audits and other internal risk management activities. When you have an understanding of the blended 6

BANKING NEW ENGLAND

hard and soft costs of each risk management area, you can then match this to your organization’s functional risks, like credit, information security and regulatory compliance, to create an accurate picture of your risk and risk management spending. The CRO or risk management committee can then make adjustments and compose strategies to make your risk management program more effective and costefficient.

Install Strong Governance

Strong risk management governance is crucial to the success of your enterprise risk management program. Every community-based financial institution needs a chief risk officer, whether it is a dedicated role or part of an exciting executive’s responsibilities. This individual is the evangelist about the benefits and best practices of enterprise risk management for the entire institution. Without this role, the effectiveness of the program will diminish over time. There are various internal and external forces that drive the need for this valuable role. Internally, there are numerous risk indicators that require monitoring, changes to the business that require evaluation and emerging risks that need to be evaluated. Externally, there are regulatory changes, growing competitive pressures, new product introductions and increased scrutiny as an organization approaches and crosses the $1 billion mark. Strong risk governance is needed to set the institution’s risk appetite, establish the key risk indicators and determine the resources to be allocated to assess and mitigate risk. The risk management governance team should do a thorough assessment of current practices for assessing risk, work to “convert” everyone in the institution to be more risk-minded, create a common language to communicate risk and decide if the institution needs more resources and technology to address risk. Creating a robust and highly effective enterprise risk management program will bring significant change to your institution. Enterprise risk management isn’t just another compliance requirement. It’s not another management practice. And it’s not going away. ERM is a powerful and effective approach to risk management that will make your institution stronger, sounder and more successful in achieving its current and future business goals. BNE

TODAY WE BUILD SOMETHING BIGGER THAN OURSELVES. It’s time to transform banking at its very core. Your core platform serves as the foundation of everything you do. For nearly 50 years, CSI has delivered robust core banking solutions and industry-leading service to help banks go above and beyond. Our approach is to build a solid relationship with you, so you can create a better experience for your customers.

csiweb.com/letsdothis

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

MARKET STRATEGY

Optimizing the Multichannel Banking Experience Providing a Seamless Customer Interface is No Longer Merely an Option

BY GRAHAM CLARK Graham Clark is vice president and head of customer experience management for the industry solutions group at Mphasis.

oday’s consumers demand multiple methods for interacting with banks. Those banks with cutting-edge consumer-facing solutions have gained a competitive advantage in acquisition and retention, while late-adopter banks are struggling to catch up. A true multichannel strategy requires more than just a website and a mobile app. Each channel needs to be optimized and managed to provide a seamless customer experience. Optimizing the multichannel experience requires a simultaneous focus on unlocking the value of digital investments and a dedication to re-inventing the customer experience. Here are 10 critical areas to master for a successful multichannel banking strategy.

Personalize the Digital Experience

For the past 10 years, the banking and capital industry has focused on a customer-friendly, but inside-out “one bank” strategy, providing all products and services from one easily accessible branch, ATM, website or contact center. In digital, this is not enough. Wading through 62 products on a smartphone screen just doesn’t work for customers anymore. Individuals want to see only a few personalized products that are relevant and useful to them in the context of all their other banking and non-banking activities. Consumers want their banks to recommend what’s applicable to them (not best for the bank) and to interact with and message them when it’s to their advantage. Today’s customers want and expect a trusted partner and advisor, and this is achieved through personalization.

Improve the Physical Experience

Don’t neglect the value of the original banking channel: The in-person experience. Branch transaction volumes may be falling in volume, but they are more critical than ever. This requires more convenient hours, more intelligence, more local community atmosphere and more technology, including more advanced people-less banks or interactive ATMs and kiosks.

Tap Customer Experience Analytics You can’t serve consumers unless you

BANKING NEW ENGLAND

know them. Whether customers walk into a branch, call an agent, approach your website or use your mobile app, they expect you to understand their needs and serve them better. Use internal banking data and external data, such as transactions, social media profiles and shopping habits. Apply proven customer experience analytics to respond to each customer intimately, targeting specific products to each individual. And analyze your customer experience at an overall level with metrics like NPS, CES or CXi and at an individual interaction and channel level with tools like Fizzback, Foresee and customer sat scores.

Mobile Innovation is a Must

Just two years ago, consumers purchased 37 percent of their products online and 40 percent in a branch. Sixty percent of bill pay, balance/ transaction views, statement views and money transfers occurred via the Web. With mobility interactions growing at the rate of more than 30 percent per year, mobility will transform your ability to sell and service individuals when, how and where they want. For many, the mobile banking experience is their only point of contact. You must invest in the mobile channel, above all.

Prioritize Payments and Transactions

Arguably the most important banking functions are payment and transaction processing interactions, whether merchant payments, credit card transactions, customer bill pay, trading stocks and moving funds – whether through cash, checks or online. Digital and mobile technologies are transforming payment expectations, capabilities and experiences. Make these functions seamless for consumers.

Enhance Self Service

Self-service capabilities, specifically voice-based interactive voice response systems (IVRs), continue to grow in sophistication and importance, aligning tightly with web service and other assisted and self-service capabilities. These need to be aligned with your digital capabilities.

Transition from a Multichannel to an Omnichannel Strategy

Get Social

Personalize the Digital Experience

Increase Efficiency and Effectiveness

Arm Your Contact Center Agents

Enhance Self Service

Improve the Physical Experience

Tap Customer Experience Analytics

Prioritize Payments and Transactions Mobile Innovation is a Must

Arm Your Contact Centers Agents

Voice agent interactions may be declining, but they’re more critical and complex than ever before. In an era of self-service and social media, customers rarely pick up the phone unless it’s an escalated concern. Contact center agents increasingly need to become specialists with added tools (SWATs), taking advantage of intelligent call routing based on customer profiles and behaviors; desktop tools that provide predictive recommendations based on previous actions, prompted to action by customer analytics and enabled to deliver improved experiences through speech analytics better knowledge applications; and collaborative chat, email and social messaging capabilities.

Increase Efficiency and Effectiveness

Supplement live agents with intelligent

virtual agents (IVAs) to answer questions. IVAs remember every coaching moment, take no sick days, have zero attrition, work 24 hours a day and can handle hundreds or thousands of interactions at a time – all in the channel and language of the customer’s choice. Typically IVAs apply most easily in text-based interactions such as iChat, email or social media messaging. Interactive speech IVAs are emerging driven by customer expectations originating from the popularity of Siri and similar tools. Proven in many non-banking industries, IVAs often become the highestranked agents receiving repeated “agent of the month” awards from customers.

Get Social

Social media is increasingly important channel for sentiment and reputation analysis, market monitoring and promotion. And social is rapidly becoming necessary for targeted outbound messaging

and connecting to communities. The real results don’t come from monitoring or understanding, but from acting on the insight. Do this by responding to and engaging with individual customers and building collaborative communities where customers help each other, and your bank.

Transition from a Multichannel to an Omnichannel Strategy

Focus on maximizing the customer experience across multiple channels using powerful operational tools, and transform your call center to a customer experience command center. Like NASA’s Mission Control, the customer experience command center uses advanced analytics to monitor and manage the customer experience across all channels, all media, all segments and all geographical locations to not only achieve targets, but predict the impact of actions on enterprise achievement. BNE BANKING NEW ENGLAND

MONEY ORDER MADNESS

Depository Bank Not Liable in Kiting Scheme R.I. Court Clarifies UCC Liability Limitation BY LAURA ALIX Laura Alix is a staff writer for The Warren Group, publisher of Banking New England. She may be reached at lalix@thewarrengroup.com.

recent Rhode Island Superior Court decision held that a money order company victimized by a fraudster cannot hold liable for its losses the bank that accepted the faux money orders for deposit. The decision came in a lawsuit originally filed by Domestic Bank, now Admirals Bank, against Johanny Urbaez and others, in which Memo Money Order Co. Inc. intervened. The central question was which entity should take the loss in a fraudulent money order transaction, said Paul Sanford, an attorney for Domestic Bank in the case. The court considered whether the issuer of a money order fraudulently altered or forged by a third party could bring a Uniform Commercial Code (UCC) or general negligence claim against the bank that accepted the money order for deposit, Sanford told Banker & Tradesman by email.

New Jersey state court decision, according to Sanford. In that case, Western Union Telegraph Co. v. Peoples National Bank, the court dismissed the negligence claim brought by the drawer of the money order against the depository bank. Western Union had sued Peoples National Bank in Lakewood, N.J., over a $1,100 discrepancy on a money order calling for payment of $100 in text, but $1,200 in numerals. The money order was cashed for $1,200, and Western Union demanded reimbursement of the difference more than two years later. In that case, as in the Rhode Island suit, the court held that the drawer lacked standing to bring those claims, since it was Western Union’s own bank that had the last clear chance to stop the fraud.

First Such Case in 35 Years

Memo’s claim argued it could sue Domestic directly because it was not the drawer of those money orders, but the drawee, and that the purchaser of the money orders was actually the drawer. Domestic countered that Memo lacked the standing to bring many of its claims and that Memo should be taking action instead against its own bank, BancFirst. Ultimately, the court sided with Domestic on this claim. A lawyer for Memo Money Orders said that Memo disagreed with the decision, but did not want to comment further at this time, as a few of the claims in Memo’s claim and Domestic’s counterclaim remain pending. The decision, reached in late March, reaffirmed the UCC’s allocation of loss principles, which govern who may sue who in the event that a negotiable instrument like a money order is forged or fraudulently altered, Sanford said. In other words, a bank that accepts a personal money order for deposit cannot be sued by the issuer of that money order. The issuer must bring that claim against their own bank. “This is an important liability limitation created by the UCC,” Sanford said by email. “Prior to this decision it was unclear whether that limitation explicitly applied to personal money orders. The decision confirmed that it does. This should be very reassuring to banks in that money orders are treated similar to checks and other negotiable instruments for allocation of loss purposes.” BNE

The action originated when Johanny Urbaez, who was acting as a special agent and trustee of Memo Money Order Inc., passed bad money orders in a kiting scheme. According to the suit, in 2006 Urbaez entered into a trust agreement with Memo Money Order Co. Inc. allowing him to sell Memo money orders as part of his check-cashing business. In 2009, after the agreement was altered so that Urbaez, rather than Memo, could initiate the wire transfer that covered the money order, he deposited forged Memo money orders into his own accounts at Domestic Bank. Memo’s bank, BancFirst Stratford, honored $1.2 million worth of the money orders before the fraud was detected, but later returned $235,737 after Memo ordered it to stop payment. Later that year, Rhode Island’s Division of Banking revoked Urbaez’s license and ordered him to pay the state a $1,388 penalty. That left both Domestic and Memo out a considerable amount, and the question remained as to who should bear responsibility for those losses. After the fraud was uncovered, Domestic filed a suit against Urbaez. Memo brought a claim against Domestic, hoping to recoup some of its own losses from the bank itself, and Domestic brought a counter-claim against Memo. The last claim that considered a negligence case by a drawer against a depository bank in a personal money order setting was a 1979 10 BANKING NEW ENGLAND

What it Means for Banks

COVER SETTING STORY A PRECEDENT

Security is a Two-Way Street Eighth Circuit Case Affirms Balance in UCC

BY LAURA ALIX Laura Alix is a staff writer for The Warren Group, publisher of Banking New England. She may be reached at lalix@ thewarrengroup.com.

bank does not bear responsibility for making whole a commercial customer that lost more than $400,000 to a phishing scam, because the customer declined the bank’s “commercially reasonable” security measures, according to a recent appellate court decision that some Boston attorneys say could set a precedent for the industry as a whole. Furthermore, the Eighth Circuit Court of Appeals also ruled that Tupelo, Miss.-based BancorpSouth Bank may seek attorneys’ fees from the commercial customer in question, Missouribased Choice Escrow and Land Title. The decision turned on Article 4A of the Uniform Commercial Code (UCC), which governs funds transfers. Under Article 4A, a bank would ordinarily bear the risk of loss when an unauthorized transfer occurs, except when the bank has offered a “commercially reasonable” security measure or when it can prove that it accepted the payment order in good faith and “in compliance with the security procedure and any written agreement or instruction of the customer.” In this case, the appeals court decided that BancorpSouth’s security measures were commercially reasonable and that Choice Escrow should bear liability for the loss because it rejected those security measures. “I think it’s a very measured opinion that shows that the justices understand the banking

12 BANKING NEW ENGLAND

system and the business side for banks in a way that I think strikes a fair balance, which is what the legislature was trying to do in Article 4A,” said Brenda Sharton, a litigation partner at Goodwin BRENDA SHARTON Procter and chair of the firm’s business litigation practice. “I think this recognizes that balance in a way that shows some business acumen on the part of the justices.”

Fool Me Once …

At the root of the case was a phishing scam that befell one of Choice Escrow’s employees and infected their computer with a virus. That virus gave an unscrupulous third party access to that employee’s username and password and, additionally, allowed the thief to mimic that user’s IP address, effectively fooling the bank’s device authentication software. That’s how a hacker was able to conduct a fraudulent wire transfer of $440,000 from Choice Escrow’s account to a bank account in Cypress. Choice Escrow sued BancorpSouth for the loss of funds, and BancorpSouth counterclaimed for its attorney’s fees. BancorpSouth offered Choice Escrow a dual control security measure, in which any payment

order submitted through the bank’s online account platform would have to be approved by a second authorized user with a unique username and password before the bank would make the payment. Choice Escrow declined the use of dual control – not just once, but twice. First, Choice declined the measure when it first opened its trust account with BancorpSouth, and then again in November 2009, when one of the company’s underwriters alerted a Choice executive to the threat of a phishing scam and said executive wrote the bank asking whether it could limit wires to foreign banks. BancorpSouth couldn’t stop wire transfers only to foreign banks, a banker wrote back, but perhaps Choice might like to implement dual control now? The Choice executive declined, saying it would be “really tough unless we all shared passwords.” In March 2010, scammers targeted a Choice employee and made off with the cash.

“The efficient operation of the payments system is dependent on certain compromises among the party and recognition of the fact that security measures that are appropriate for one bank and its customers may not necessarily be appropriate for another.” — Lynne Barr, partner, chair of banking and consumer financial services practices, Goodwin Procter

appropriate for another.” In the PATCO case, while a lower court initially ruled in favor of the bank, the First Circuit court overturned the summary judgment and remanded it back to a lower court. The case settled shortly thereafter. Other cases, certainly, have dealt with Article 4A of the UCC, but many settle well before reaching the circuit court of appeals. That may be in some measure because the money in question wasn’t worth the

A Two-Way Street

The case bears some similarities to a previous appellate court case, PATCO Construction Co. vs. People’s United Bank, in which a Maine-based construction company brought a suit against Bridgeport, Conn.based People’s United Bank after it lost more than $500,000 in a series of fraudulent ACH transactions. Choice Escrow vs. BancorpSouth is “an important case because it is a second Circuit Court of Appeals opining on facts that are similar to the First Circuit case, but LYNNE BARR coming to a different – and in my opinion, correct – conclusion,” said Lynne Barr, partner at Goodwin Procter and chair of the firm’s banking and consumer financial services practices. “The efficient operation of the payments system is dependent on certain compromises among the party and recognition of the fact that security measures that are appropriate for one bank and its customers may not necessarily be

attorneys’ fees to bring the case very far, but it may also be that bankers are unwilling to potentially set a negative precedent for their industry, said Sharton, who represented People’s United in the First Circuit case, but declined to comment on the particulars of that case. The Choice Escrow case applies only to commercial customers, of course, but it establishes an important precedent: Customer security is a two-way street. BNE

Currency Automation Solutions and Self-Service Coin Centers Teller Tools for Success

Doing Things the Right Way

ters Cen oin ce C i v r -Se Self

Currency Dispensers

61-201 50 Y E AR S

Currency Recycle rs

BANKING NEW ENGLAND

LEGISLATIVE UPDATE

Reverse Mortgage Industry Dodges Bullet In-Person Requirement Seems Headed for Delay

BY COLLEEN M. SULLIVAN Colleen M. Sullivan is a staff writer for The Warren Group, publisher of Banking New England. She may be reached at csullivan@thewarrengroup.com.

he reverse mortgage industry in Massachusetts may have dodged the bullet again – but it’s not clear how long it can keep out of danger. Reverse mortgages allow borrowers to tap into the equity built up in their home to pay for their living expenses in retirement, while still living in their homes. When the borrower or their estate sells the home, the loan is paid off. Almost every reverse mortgage is issued under the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program, in order to for lenders to take advantage of federal wrap insurance on the loans. Under the HECM program, borrowers must be 62 or older in order to take out the loan, the property to be mortgaged must be their primary residence and, crucially, they are required to receive counseling to make sure they fully understand the terms of the loan before it can be issued. In the wake of the housing crash and foreclosure crisis, state lawmakers decided to stiffen those requirements for potentially vulnerable Massachusetts seniors. A law passed 14 BANKING NEW ENGLAND

in 2010 requires seniors who have a gross incomes less than 50 percent of the area median and assets, excluding their primary residence, valued at less than $120,000, receive their counseling in person and that a mandatory cooling-off period must ensue before they can take out the loan. The problem is that while the agency created the requirements, it didn’t provide any funds to implement them. The most recent roster compiled by the FHA lists only 12 counseling agencies that can provide reverse mortgage counseling for HECMs in Massachusetts, almost all in the eastern half of the state. Only a scant handful provide in-person counseling. The vast majority of borrowers receive their counseling over the phone, through a few large national firms that specialize in such counseling.

Rock and a Hard Place

Without more funds to provide inperson counseling, the implementation of the requirement would cause months of delays for borrowers – and that’s the best-case scenario.

The penalties for lenders who fail to meet the requirement are so stiff – under the 2010 law, the loan terms are rendered unenforceable and the lender may have their banking license revoked – that allowing it to take effect could effectively put a stop to reverse mortgage lending in the state, lenders say. “The bottom line is that it was flawed legislation from the beginning,” said George Downey, president of HarborOne Mortgage Solutions in Braintree, Mass. “There’s clearly a lack of capacity, and there just isn’t the counseling network out there to support it.” Lenders have already twice successfully argued for a delay of the in-person counseling requirement. An amendment to a bill passed in July by the House and currently under consideration in the Senate will extend the implementation deadline a further two years, to 2016. But in the four years since the law’s

“We have to get this matter resolved in the next two years, so that our seniors aren’t put at a tremendous disadvantage.” — George Downey, president, HarborOne Mortgage Solutions

passage, little has changed on the ground with regard to increasing in-person counseling resources. It’s not clear how long the can may be kicked down the road. “Since those two years have gone by [since the last extension], nothing has changed. If anything, it’s worse than it was before,” said Downey. Yet while the rollout of the law itself may be temporarily stymied in the Bay State, the idea behind it may be beginning to attract mimics. One other state, North Carolina, already requires in-person

IN 2013, A TOP 10 US BANK EXPERIENCED A MAJOR WIRED LINE OUTAGE.

counseling for reverse mortgage borrowers. Bills requiring similar mandates have been filed in several other states, including California. That’s especially troubling, the industry argues, because there’s little data to support the idea that in-person counseling is necessarily more effective than counseling over the phone. “We have to get this matter resolved in the next two years, so that our seniors aren’t put at a tremendous disadvantage,” said Downey. BNE

Exhibiting & Presenting at The Bank Summit 2014

MILLIONS OF TRANSACTIONS & CUSTOMER RELATIONSHIPS WERE AT RISK. FORTUNATELY, THEY HAD VENTUS WIRELESS.

4G LTE WIRELESS BACKUP

BANKING NEW ENGLAND

COVER STORY

Banking on

Wealth

Management

As Customers Seek Broader Financial Advice, Smaller Banks Step up to Give It

16 BANKING NEW ENGLAND

By Scott Van Voorhis Small and midsized banks across New England are diving into the business of wealth management, competing for customers in a field long dominated by the mega banks. Local bankers say wealth management gives them a hot new service needed by a growing number of the affluent and well-off faced with crafting their own retirement plans – valuable customers who would otherwise have to go elsewhere for help, possibly to rival financial institutions. But the new offerings have also given banks across New England access to potential new customers with whom they might not have otherwise done business. Hometown bankers say they offer a sweet spot for consumers, with far more personal service than the wealth management teams at big banks, combined with the institutional stability that many smaller or solo wealth management firms are less likely to offer. Instead of pushing a particular product or service, the banks, through their wealth management teams, work with their clients on their full-range of financial needs, from overseeing their investments to offering financial planning and estate planning services. “We don’t get all excited when markets go up and we don’t get all depressed when markets go down,” said Bill Cadigan, president of Wellesley Investment Partners, a subsidiary of Wellesley Bank. “We are very different from a very aggressive firm that does well when the market is up and suffers greatly, or goes out of business, when the market goes down. “We are in the wealth preservation business,” he added. Here are the experiences of three Massachusetts institutions – Wellesley Bank, Easthampton Savings Bank and BayCoast Bank – that have found success in money management and financial planning.

How They Got Started, and Why

With a history stretching back a century, Wellesley Bank has long offered advice to its customers on how to prudently manage their money and how to “borrow appropriately,” said CEO Tom Fontaine. But in 2008, Wellesley Bank took a major

step to build upon that tradition and meet current market demand, launching a separate wealth management subsidiary, Wellesley Investment Partners. Seven years later, the bank’s wealth management group has $125 million in assets under management and seven employees. “It’s gone very well,” Fontaine said. “The growth has been phenomenal for us.” Plimoth Investment Advisors got its start in 2005, when it was launched by what is now Fall River-based BayCoast Bank as a limited purpose trust company. The bank long had a trust department, but realized that demand on part of customers was shifting towards a broader array of wealth management services, noted George Oliveira, Plimoth’s chief executive. The business took off and by 2011, Plimoth was offering its wealth management services to other local banks as well. Dedham Institution for Savings then made the jump from client to part owner, buying a 20 percent stake in Plimoth, with BayCoast retaining the remaining 80 percent. Today Plimoth has 17 employees and $600 million under management. “We do everything, from soup to nuts,” Oliveira said. For its part, Easthampton Savings Bank launched a wealth management team back in 1999, said Tom Brown, a senior vice president at the bank. Easthampton got TOM BROWN tired of referring customers to outside financial advisors when they needed various wealth management services. Today the bank’s wealth management group has a $76 million portfolio. “We needed to be more well-rounded,” Brown said. “It’s a bigger scope than just about alternative investments” or any other individual product, he added. “It’s about the whole financial picture of our customer and financial planning,” he said.

Financial Planning as Loss Leader

Wealth management executives at the banks say they are more than happy to talk over finances with their potential clients. Continued on next page

BANKING NEW ENGLAND

COVER STORY Banking on Wealth Management Continued from page 17

Raymond Lacourse, certified financial planner and vice president at Easthampton Savings Bank, says he frequently has such casual discussions. The hope is that the conversations might lead result in a new client joining the practice. Drawing up a formal financial plan might RAY LACOURSE be part of the overall process of managing the new client’s portfolio. But Easthampton’s wealth management group does not offer one-off financial plans. The group earns its

“We are trying to stay in our back yard,” Cadigan said. “We are not going to start calling on people in California.” All three groups have a mix of clients, some referred by their bank parents, others from the general community. Easthampton works with a range of individuals and small businesses, moving beyond portfolio management to help draft buy/ sell agreements and estate plans, Lacourse said. He estimates about 2 percent of the bank’s customers are clients of Easthampton Savings’ wealth management group. Lacourse would like to boost that number to 4 percent, the industry average. That said, Easthampton’s wealth management group puts a big emphasis on finding ways to serve all its clients’ financial needs,

“

We don’t get all excited when markets go up and we don’t get all depressed when markets go down. … We are in the wealth preservation business.” — Bill Cadigan, president of Wellesley Investment Partners

keep through a fee based on a percentage of a client’s assets under management. “We talk to anybody,” Lacourse said. “I love to have conversations with younger people right out of college – I wish I had done then, in my 20s, some of the things I recommend people to do,” he said. Both Wellesley Investment and Plimoth Investment say their doors are always open to potential clients looking to chat, but they don’t separately offer financial plans. Instead, like Easthampton, they earn a fee based on the amount of money they manage for a client. “If we do a financial plan for our client, we are really not charging them for it,” Plimoth’s Oliveira said.

Who the Customers are

Wealth management practices often have a minimum asset requirement when it comes to prospecting for and working with potential clients. That’s the amount of money available for investment, beyond the value of a house or condo. Plimoth doesn’t have a hard and fast minimum, but its average client has a portfolio ranging from $750,000 to $1 million. Most of the group’s clients are individuals, though it does work with some charitable foundations, endowments and company retirement plans, Oliveira said. At Wellesley Investment, the minimum required is $500,000, though the typical client has a portfolio worth between $1 million to $5 million, Cadigan said. Eastern Massachusetts is Wellesley Investment’s market territory, fertile ground given the high income and asset levels in the Boston and its far-flung suburbs. 18 BANKING NEW ENGLAND

including banking. As he works with new clients, Lacourse and his fellow wealth team members drill down to get an accurate as possible view of their full financial picture, not just stock market investments, but insurance and mortgages and everything else. So while the percentage of bank customers using Easthampton’s wealth management services might be smaller, they are much more likely to have most or all their financial affairs centered at the bank, Brown said. “We are their primary financial advisor,” he said.

Profiting from Synergies Another upside of the wealth management business for New England banks is the multiple synergies that can result. Instead of having to refer customers out of the bank to various wealth management operations, banks can send them down the aisle to their own groups. But it works in reverse as well, with wealth management clients, like everyone else, in need of a range of banking services. Wealth management customers may also very well be business owners in need of a commercial loan, a mortgage or a car loan, Plimoth’s Oliveira said. Easthampton takes a similar approach. “When a customer comes through our door, we want to be one-stop banking,” Brown said. “We want to be able to do it all.” Wellesley, by contrast, takes a little bit more of a subdued approach when it comes to the synergy question. There is no cross-selling at Wellesley Investment of Wellesley Bank products. No sales commissions flow back to the wealth management group if a client takes out a Wellesley Bank mortgage, Fontaine said.

“We show that we can provide the best value,” Fontaine said. “We are not forcing people to do things that are not in their best interest.” BNE

THE BANK SUMMIT

Conference for Financial Professionals to Deliver Insights, Strategies for Success

WHAT The Bank Summit

WHEN Oct. 9, 2014

WHERE Holiday Inn Boxborough Boxborough, Massachusetts

MORE INFORMATION www.thebanksummit.com

Photos by Amanda Martocchio

he second annual Bank Summit, produced by The Warren Group, publisher of Banking New England, promises to deliver the vitally important information that financial professionals need from industry leaders and vendors from across New England. At the one-day conference, banking professionals will learn about emerging opportunities and innovative solutions for the retail and commercial banking industry, while getting hands-on practical information for strengthening bank management.

Something for Everyone

From guarding against acts of nature to navigating increasingly condensed vendor networks, thereâ&#x20AC;&#x2122;s something for everyone at The Bank Summit. Large-scale natural disasters and terrorist events in recent years have led to increased scrutiny by regulators to ensure that businesses are prepared to sufficiently recover and service their customers. Merely having a plan in place will no longer pass a regulatory exam. Banks and credit unions are required to provide more detailed information than in the past, and are called to prove that their recovery strategy can actually work. Tracy Hall, IT assurance manager at Wolf & Co., will lead a presentation focusing on the areas of a business continuity program that may require enhancement based on the latest revisions to regulatory guidelines. According to a recent report from the Business Performance Network, continued vendor consolidation within the core processing and IT services industry has made it increasingly difficult for community banks and credit unions to negotiate fair market pricing from vendors. In his session at The Bank Summit, Aaron Silva, president of Paladin, will present an analysis of the report, including

additional details and background not publicly available. Attendees will leave with an action plan of ways to begin managing costs during the restructuring of core and IT agreements â&#x20AC;&#x201C; without the need to change vendors. Addressing another hot topic, global manufacturer of and solutions provider for payment cards ABnote will have an update on the importance and implementation of EVM and RFID cards. The U.S. is in the early stages of EMV adoption, with a small number of cards by select issuers now finding their way into the market. Large-scale migration to EMV cards is imminent, but adding EMV to instantly issued cards requires all the complex components of card issuance in a branch location, and may rely heavily on the existing processor or issuer systems. The instant issuance of credit and debit cards at the branch bank yields benefits for the issuer, including savings, improved security and same-day and increased usage. ABNote will cover the best ways to implement EVM at your financial institution.

Learn More

The Bank Summit is designed for executives, senior management and bank personnel involved in operations, technology, lending, retail banking, marketing and sales, human resources, security, compliance and risk management. For more information about the conference, vendors and attendees, please visit www.thebanksummit.com. BNE BANKING NEW ENGLAND

BANK PROFILE

Meredith Village and Merrimack County Savings Bank: Stronger Together BY LINDA GOODSPEED

ess than two years after making history and forming New Hampshire’s first and only banking “alliance,” Meredith Village Savings Bank and Merrimack County Savings Bank think they have found a community banking model for the future. “There’s a lot of industry conversation about how institutions that are not mega-banks can comply with all the legal and regulatory challenges and costs that keep increasing,” said Richard (Rick) Wyman, executive vice president and CFO at both Meredith and Merrimack and the two banks’ new parent holding company, New Hampshire Mutual Bancorp. “Banks have got to find ways to become more efficient.” For the two newly allied banks, “efficiency” means complying once, instead of twice. “We are all under the same time requirements to get the same things done,” Wyman said. “Instead of issuing reports twice, we do it once.” And unlike a merger, Meredith and Merrimack have remained separate institutions, with their own charters, management, boards, staff, identities, branding and markets. In January 2013, Meredith Village Savings Bank, with 11 offices spread around Lake Winnipesaukee, New Hampshire’s largest lake, and Merrimack County Savings Bank, with seven offices extending from Concord to Nashua, formed a mutual holding company called New Hampshire Mutual Bancorp. 20 BANKING NEW ENGLAND

“We both have great followings, branding and have no intent to change who we are,” Wyman said. The two banks are near mirror images of each other. Meredith was founded in 1869, Merrimack in 1867. Both are independent mutual savings banks, and almost the same size, with combined assets of about $1.5 billion. They have no overlapping markets. Meredith serves northern N.H.; Merrimack southern. Their two closest branches are 45 minutes apart. Although the two banks have retained their separate identities, some functions have indeed merged, primarily in the back office. Among the operations that have merged are risk management and compliance, finance, audit, IT, customer and loan operations and human resources. The two banks each have their own president and CEO: Sam Laverack at Meredith, and Paul Rizzi at Merrimack. Each sits on the board of the other bank, and share the top job at the parent company. The banks share a CFO (Wyman), and also a COO (Phil Emma). Wyman said there have been no layoffs resulting from the alliance. Together, the two banks employ about 330 people, with employees now able to transfer between the banks without losing benefits or seniority.

A Greater Impact

By combining assets, Wyman said the two banks have achieved a stronger capital and loan

position, and many economies of scale. “We can help out small and larger businesses that we couldn’t do before, and have a greater impact RICHARD WYMAN on our customers and communities,” he said. “We will also be able to offer more products to our customers based on economies of scale.” Currently, the two banks have a combined loan portfolio of about $1.1 billion. The alliance has enabled the banks to significantly increase the size of the loans they can offer (up to about $20 million, twice the previous limit), which has helped attract new business. In 2013 alone, the banks shared more than $21 million in new commercial loans. Overall, the banks’ loan portfolio breaks down about 60 to 40 percent between residential and consumer loans, and commercial loans.

The Granite State is a story of two economies: The rural, tourist-dependant north, and the more industrialized, larger population centers of the south. Like most northern-based community banks, Wyman said Meredith had “southern tendencies.” “Eventually, if we didn’t have the alliance, we might have been competing against each other,” he said. Instead, the banks have expanded by joining forces. Later this year, Merrimack will open its eighth office in Hooksett, bringing the two banks’ combined total to 19. The alliance has been so successful, the banks are already talking about adding more partners. “If we had a third bank or a fourth, we would gain that much more economy of scale,” Wyman said. While he thinks alliances could be a strategy for small community banks to

survive an increasingly complex and costly regulatory environment, he said banks should proceed cautiously. “It takes some time to make it all work,” he said. “Maybe we’ll think about adding another bank in the future, but that doesn’t mean there is another culture match out there.” Of all the ingredients for a successful match – similar size, healthy balance sheets, no overlapping markets, strong management, good communication – Wyman said “culture” was the most important. “It’s not just about the numbers. Culture is very, very important for a successful alliance. Culture is different for everybody. Finding a culture that blends with yours is not easy.” After all, it took Meredith and Merrimack nearly 150 years to find each other. BNE

BANKING NEW ENGLAND

COMMUNITYGOOD GOODWORKS WORKS COMMUNITY

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 Editor Christina O’Neill at coneill@thewarrengroup.com.

Featured Banks • BankNewport • BayCoast Bank • Bay State Savings Bank

BankNewport

Representatives from the Housing Authority of the town of East Greenwich, BankNewport, the Federal Home Loan Bank of Boston, and the Rhode Island Housing Resources Commission were among the group that gathered this spring at 2880 South County Trail in East Greenwich to break ground on a new affordable housing development project.

Bristol County Savings Bank

Bristol County Savings Bank, through its foundation, awarded grants totaling $40,000 to seven New Bedford area nonprofits: Schwartz Center for Children; Caritas Communities; Nativity Preparatory School; New Bedford Festival Theatre; Horizons for Homeless Children; New Bedford Art Museum/ ArtWorks!; and Veteran’s Transition House of Southeastern Massachusetts.

Bristol County Savings Bank

• Bristol County Savings Bank • Eastern Bank

BayCoast Bank

• Rollstone Bank & Trust

Fall River, Mass.-based BayCoast Bank contributed $10,000 to the Southeast Regional Office of the Mass Small Business Development Center (MSBDC) Network, a program that supports the entrepreneurial growth of small businesses throughout Massachusetts. The donation will assist in providing no-cost comprehensive and confidential advisory services, focusing on business growth and strategies, financing and loan assistance, and strategic marketing and operational analysis.

• Skowhegan Savings Bank

Bay State Savings Bank

• Kennebunk Saving Bank • Marlborough Savings Bank • Meredith Village Savings Bank • MutualOne Bank • Needham Bank

The Bristol County Savings Charitable Foundation recently presented a $20,000 grant to Massasoit Community College.

Eastern Bank

• Washington Trust • Webster Five

Bay State Savings Bank has awarded seven $500 scholarships and one four-year, $4,000 scholarship to eight area high school seniors based on their academic achievements, character and service to community. One student was chosen from each of six public high schools in Worcester and two students chosen from Auburn High School. The $500 scholarship recipients were: Brian Bates, Burncoat High School; Shelly Lam, Claremont Academy; Klajdi Kosovrasti, Doherty High School; Michelle Addai, North High School; Frank Manu, South High School; Jimmy Phan, University Park; and Katelyn Pike, Auburn High School (Elizabeth Roy Memorial Scholarship). The four-year, $4,000 scholarship recipient was Jeanelle Wheeler. 22 BANKING NEW ENGLAND

Eastern Bank, through its charitable foundation, donated $750,000 in grants at the 10th Annual Community Quarterback celebration. Eastern Bank chairman and CEO Richard E. Holbrook and Doug Flutie, the bank’s spokesman, honored the organizations before about 100 guests inside the bank’s corporate headquarters in downtown Boston. Among this year’s honorees was former WCVBTV consumer reporter and news anchor Susan Wornick, who was recognized for her dedication to championing the interests of consumers living throughout eastern Massachusetts communities. The Eastern Bank Charitable Foundation made a special $5,000 donation to the Susan Wornick Journalism Scholarship Fund, which is given to a student at her alma mater, Natick High School. Wornick recently retired after 34 years at WCVB-TV.

Kennebunk Savings Bank

Marlborough Savings Bank

More than 20 Kennebunk Savings employees joined more than 900 volunteers for the United Way of York Countyâ&#x20AC;&#x2122;s 19th Annual Day of Caring on June 4. Volunteers raked, painted, moved offices, cleaned cabins, planted gardens and provided hands-on work for 46 nonprofits throughout York County to complete 92 service projects. Kennebunk Savings Vice President of Corporate Development Andrew Lederer was among the volunteers. This year Kennebunk Savings volunteers spent the day at Waban Projects in Sanford. Waban Projects offers a variety of programs and services for children and adults with developmental disabilities and is part of a campus with many outbuildings.

Marlborough Savings Bank

The Marlborough Savings Bank, through its charitable foundation, awarded the Westborough Public Schools Fine Arts Department a $1,000 grant to complete a dedicated sound system. The Gibbons Middle School is a public school serving about 600 seventh- and eighth-grade students.

The Marlborough Savings Charitable Foundation awarded the YWCA Westborough Child Care Center a $4,500 grant to purchase and install a playground structure.

Marlborough Savings Bank

Through its charitable foundation, Marlborough Savings Bank donated $5,000 to 15-40 Connection, an organization dedicated to empowering teens and young adults with knowledge that helps them recognize cancer at its earliest possible stage. Continued on next page

BANKING NEW ENGLAND

COMMUNITYGOOD GOODWORKS WORKS COMMUNITY

Featured Banks • BankNewport • BayCoast Bank • Bay State Savings Bank

Continued from previous page

Meredith Village Savings Bank

Meredith Village Savings Bank, through its charitable foundation, awarded a $5,000 grant to Granite State Adaptive (GSA) of Mirror Lake, N.H. The organization will use the funds to provide scholarships to children at local school districts who would otherwise be unable to afford adaptive ski lessons and participate in their school’s winter ski program.

MutualOne Bank

• Bristol County Savings Bank

Rollstone Bank & Trust

Rollstone Bank & Trust recently donated $5,000 to the YMCA’s Montachusett branch in Fitchburg, Mass. The grant will be used to continue the Working on Wellness (WOW) program at the YMCA. WOW’s goal is to prevent and reduce obesity in preschoolers and school aged children who participate in the program. It promotes health through education, innovation and access to services.

Skowhegan Savings Bank

• Eastern Bank • Kennebunk Saving Bank • Marlborough Savings Bank • Meredith Village Savings Bank • MutualOne Bank • Needham Bank • Rollstone Bank & Trust • Skowhegan Savings Bank • Washington Trust • Webster Five

Framingham, Mass.-based MutualOne Bank has awarded $2,500 to the Performing Arts Center of Metrowest through its charitable foundation. The foundation grant will help provide scholarships for PAC’s educational theatre program, which serves up to 300 youth from ages 8 to 18 each year, providing a range of skills from building scenery to learning dance and drama. The $2,500 grant to the Performing Arts Center of MetroWest was among awards totaling $43,725 in the foundation’s most recent round of funding.

Needham Bank

Needham Bank provided a $2,000 scholarship to a student entering his senior year at Xaverian Brothers High School. This year’s recipient, Jack Concannon, was selected based on his volunteerism and commitment to his community. As a volunteer, Jack plans activities and works to enrich experience of local children at the city’s Parks and Recreation Department. In addition, Jack is also involved with the Xcel program at Xaverian and The Ginormous Climb, which benefits the Suffolk County Children’s Advocacy Center. 24 BANKING NEW ENGLAND

Skowhegan Savings Bank, through its charitable foundation, has donated $10,000 to Jobs for Maine’s Graduates, a statewide nonprofit organization dedicated to helping local high school and middle school students who face barriers to education find success, a meaningful career and a productive adulthood. The donation will support JMG’s core financial literacy program, currently offered at 64 Maine schools. Specifically, the donation from Skowhegan Savings Bank will be directed to JMG’s financial literacy programs at seven schools located in the communities the bank serves.

Skowhegan Savings Bank has awarded $4,500 to the Lakewood Theater, established in 1901 and situated on Lake Wesserunsett in Madison, Maine. One of the oldest and most famous summer theaters in America, the Lakewood Theater was home to a well-known summer colony and was a proven “testing stage” for theater productions hoping to make it on Broadway. Now in its 114th season, Lakewood remains a vibrant summer theater offering musicals, comedies, dramas and children’s shows from late May through mid-September.

Washington Trust Bank

Webster Five

Washington Trust Bank has presented an $11,000 check to the Chorus of Westerly, R.I., part of a longstanding commitment to the 200-plus member choral group. The bank’s support has helped the chorus renovate their performance hall, fund their annual Summer Pops event and support their performances abroad. Additionally, Washington Trust annually sends a team of volunteers to set up the staging and the acoustic performance “shell” for the Summer Pops in Downtown Westerly’s Wilcox Park.

Webster Five, through its charitable foundation, has donated $3,000 to the Guild of St. Agnes in Worcester, Mass. The donation will support extending early childhood mental health services at the Webster Child Care Center. The Guild of St. Agnes provides care and after-school programming for children aged 4 weeks to 12 years at seven centers, 100 family homes and 10 after-school programs throughout Central Massachusetts.

Every business does. It’s like data insurance for your business. But like all insurance, it only works if you have it in place before it’s needed. We have affordable disaster recovery solutions.

Call 800.584.4279 or visit www.for-ibs.com today. Smarter Technology. Better Banking.

Easthampton, MA | Marlborough, MA

BANKING NEW ENGLAND

PERSONNEL FILE

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 Editor Christina O’Neill at coneill@ thewarrengroup.com.

Featured Banks • Bar Harbor Bank & Trust • Berkshire Hills Bancorp • Bristol County Savings Bank • Commerce Bank • East Boston Savings • Eastern Bank • Florence Savings Bank • Leader Bank • Hampden Bank • Katahdin Trust • Kennebunk Savings Bank • Lake Sunapee Bank • Needham Bank • Meredith Village Savings Bank • Merrimack County Savings Bank • Middlesex Savings Bank • National Bank of Middlebury • Savers Bank • South Shore Bank • SIS Bank • TD Bank • United Bank • The Village Bank • Webster Five 26 BANKING NEW ENGLAND

Appointments and Elections Berkshire Hills Bancorp

Middlesex Savings Bank

William J. Ryan, the former chairman and CEO of Portland, Maine-based TD Banknorth, has been appointed chairman of Pittsfield, Mass.-based Berkshire Hills Bancorp William J. Ryan Inc.’s board of directors. Lawrence A. Bossidy has retired from Berkshire’s board of directors. Ryan had served as CEO of the former Peoples Heritage Financial Group in 1990. He has been chairman of benefit and disability insurance company Unum Group since 2011, and is a director of health benefits company Wellpoint Inc. He is also the majority owner of the Maine Red Claws, an NBA Development League basketball team affiliated with the Boston Celtics.

Natick, Mass.-based Middlesex Savings Bank has made the following appointments: Michael G. McAuliffe, executive vice president and chief commercial banking officer; Christopher R. Gillin, branch manager, named community banking officer; and Carla M. Stover, business development representative, named business development officer.

Hampden Bank Springfield, Mass.-based Hampden Bancorp, Inc. and its subsidiary, Hampden Bank, elected Robert A. Massey as COO and Tara Robert A. Massey G. Corthell as CFO and treasurer of the company and the bank. Massey most recently served as CFO since 2008. He joined Hampden Bank in 1991 as treasurer. Corthell joined Hampden Bank in 2006 as the vice president, finance manager. In 2013, she was promoted to senior vice president, director of finance. She had held previous accounting and finance positions at The Hartford Insurance Co. in Connecticut and State Street in Boston.

Kennebunk Savings Bank Bradford C. Paige, president and CEO of Maine-based Kennebunk Savings Bank, was elected vice chairman of the Maine Bankers Association. The member banks elected Gregory A. Dufour, president and CEO of Camden National Bank, as association chairman for the upcoming year.

The Village Bank The board of directors of The Village Bank, based in Newton, Mass., has elected Joseph A. DeVito, executive vice president and CFO, as Tara G. Corthell its new president and CEO. De Vito was also elected to the board of Joseph A. DeVito Alfonso De Vito directors. Current Board Chairman Alfonso De Vito, incumbent since the 2003 merger of Auburndale Co-operative Bank and Newton South Cooperative Bank to form The Village Bank, will remain active on the board.

Webster Five Webster, Mass-based Webster Five has appointed Robert S. Haddon and Randall J. Morse, M.D. as corporators. Haddon is president and owner of Salisbury Management Inc., the largest property management firm in Central Mass., with headquarters in Boylston, Mass. He holds professional licenses related to his work and is a member of many community management and real estate associations. He is also an owner of Premiere Self Storage, located in Boylston. Morse, is a fellowship-trained physician specializing in geriatric medicine at the University of Massachusetts. Dr. Morse is board certified in internal medicine and has received a number of prestigious awards for academics, quality improvements and teaching.

Promotions Bar Harbor Bank & Trust

Maine-based Bar Harbor Bank & Trust has promoted Chris Perry to vice president, relationship manager â&#x20AC;&#x201C; middle market, and Michelle Curtis to vice president, regional market manager for three branches. Perry joined the bank in 2012 as vice president, regional market manager for Midcoast and Southern Maine. He has more than 12 years of financial-services experience. Curtis joined in 2011, and was promoted to branch relationship manager in 2012.

Bristol County Savings Bank

Taunton, Mass.-based Bristol County Savings Bank has promoted Michael J. Chatwin and Richard D. TerTrimachiry to vice president, commercial lending and Nancy Michael J. Chatwin Richard D. Terry F. Pimentel to vice president, indirect lending. Chatwin previously served as assistant vice president, commercial lending at BCSB, and prior to that, was assistant vice president of commercial lending for Ben Franklin Savings Bank and Foxboro National Bank, Nancy F. Pimentel Timothy E. Dailey both in Franklin, Mass., and Bank of Boston in Attleboro, Mass. Terry previously served as assistant vice president, commercial lending and commercial credit analyst. Pimentel previously served as assistant vice president, Nancy Trimachi Teresa M. Janeiro indirect lending. Prior, she was previously consumer loan officer in the indirect loan department at CompassBank in New Bedford, Mass. In addition, the bank has promoted Timothy A. Chaves, Timothy E. Dailey, Teresa M. Janeiro, Deborah J. Kirby, Lisa A. Lassiter, Peter L. Rivet and Deborah J. Kirby Lisa A. Lassiter Diana M. Rochefort to assistant vice president. Chaves previously served as a commercial loan officer and a management trainee at the bank. Dailey was promoted to assistant vice president, indirect lending sales officer. He previously served as indirect lending officer. Janeiro previously held several positions at the bank. Kirby was previously branch manager/officer and assistant branch manager at the BCSBâ&#x20AC;&#x2122;s Attleboro branch. Before that, she was sales and service representative at Fleet Bank, branch operations manager at New Bedford Institute of Savings, assistant manager at Attleboro Pawtucket Savings Bank and Customer Service Representative at Attleboro Savings Bank. Lassiter was promoted to assistant vice president/controller. She previously served as the

controller, accounting manager and staff accountant at the BCSB. Rivet has been promoted to assistant vice president, collections. He previously served as a collections officer, and prior to that, held the positions of assistant collections manager for Shawmut Bank and portfolio manager of collections officer at Compass Bank, both in the New Bedford, Mass. area. Rochefort has been promoted to the position of assistant vice president/branch manager of the Rehoboth, Mass. banking office. Prior to her promotion, she served as branch manager at the bankâ&#x20AC;&#x2122;s Rehoboth banking office. She previously held several positions at Sovereign Bank, including vice president, retail branch manager at its Seekonk office. She also previously worked for Bank of New England and Fleet. Nancy Adams-Trimachi has been promoted to vice president of operations. She previously held the positions of assistant vice president of operations, special projects coordinator, assistant vice president of residential services, residential mortgage officer and mortgage processor. Formerly, she was a mortgage consultant for Horry County Savings Bank in Myrtle Beach, South Carolina.

Commerce Bank

Boston-based Commerce Bank has promoted Maria Salvatore to senior vice president and director of human resources. Salvatore joined Commerce Bank in 2013 as vice president and director of human resources, following 20 years of experience in human resources. Maria Salvatore

East Boston Savings

John A. Carroll

John A. Carroll has been named as COO for East Boston Savings. He joined the bank in early 2012 as chief information officer. He previously served as senior vice president, operations and technology at Danversbank. He also previously worked for Sallie Mae and for other companies handling operations, call centers and project management.

Kennebunk Savings Bank

Maine-based Kennebunk Savings has promoted Mark Ross to vice president, retail market manager. He is responsible for overseeing two branches in Kennebunk. He joined the bank in 2008 as a financial services specialist in Sanford and was then promoted to assistant branch manager in the Wells Office and thereafter became its branch manager. He previously worked as a financial advisor for a company in Andover, Mass.

Lake Sunapee Bank

Melissa Case

Kandida Gray

Seven employees have been promoted to assistant vice president posts at Newport, New Hampshire-based Lake Sunapee Bank. They are: Melissa Case, branch manager; Kandida Gray, senior commer-

Continued on next page

BANKING NEW ENGLAND

PERSONNEL FILE

Career achievers in banks across New England are constantly on the move, with their professional journeys reflecting a combination of mobility and longstanding service. We acknowledge them, and welcome readers to submit news of their own staff.

Continued from previous page

Promotions

Kristie Kathan

Kevin McElhinney

Debra Hurd

Jodi Hoyt

Featured Banks

cial lending assistant; Kristie Kathan, SPHR, workforce development manager; Kevin McElhinney, branch manager; Karin Duchesne, mortgage originator; from the McCrillis & Eldredge Insurance Agency, a subsidiary of Lake Karin Duchesne Michael Correa Sunapee Bank: Michael Correa, insurance branches manager; and Debra Hurd, office manager. In addition, Jodi Hoyt, SPHR, senior vice president, has been named Lake Sunapee Bank’s chief human resources officer.

• Bar Harbor Bank & Trust • Berkshire Hills Bancorp • Bristol County Savings Bank • Commerce Bank • East Boston Savings • Eastern Bank • Florence Savings Bank • Leader Bank • Hampden Bank • Katahdin Trust • Kennebunk Savings Bank • Lake Sunapee Bank • Needham Bank • Meredith Village Savings Bank • Merrimack County Savings Bank • Middlesex Savings Bank • National Bank of Middlebury • Savers Bank • South Shore Bank • SIS Bank • TD Bank • United Bank • The Village Bank • Webster Five 28 BANKING NEW ENGLAND

Meredith Village Savings Bank

Meredith, New Hampshire-based Meredith Village Savings Bank has promoted Jason Hicks to senior vice president, corporate treasurer and investment officer. Hicks joined MVSB in 2009 as vice president of finance and controller following an extensive career in public accounting, commercial and community banking. In 2013 he was promoted to corporate treasurer and investment officer for both Meredith Village Savings Bank and Merrimack County Savings Jason Hicks Charlie Gorhan Bank, which operate under the same mutual holding company. The bank has also promoted John Swedberg and Charlie Gorhan to senior vice president, commercial loan officers. Swedberg joined MVSB as a commercial loan officer in 1999 after working as a commercial loan officer for the Pemigewasset National Bank in Plymouth, and a commercial credit analyst for North Conway Bank and Dartmouth Bank. Gorhan joined MVSB in 2009 as vice president/commercial loan officer, bringing with him more than 30 years of commercial lending experience, including the Pemigewasset National Bank and Concord Savings Bank. Cindy Hemeon-Plessner has been promoted to senior vice president/marketing officer. She has also recently graduated from the ABA Stonier Graduate School of Banking and The Wharton School Aresty Institute of Executive Education Leadership Program. A member of the bank’s senior management team, she is responsible for the development and implementation of its marketing and communication strategy. She also oversees the bank’s marketing department and serves as Trustee of the James D. Sutherland Memorial Scholarship. Hemeon-Plessner joined MVSB in 2006 as electronic marketing coordinator , rose to special projects coordinator in January 2008; promoted to marketing officer in November 2008; assistant vice president in October 2009 and vice president in August 2010.

Merrimack County Savings Bank

Angela Strozewski has been promoted to senior vice president/operations officer. She oversees loan operations, deposit operations and collections for Concord, NHAngela Strozewski Arthur J. Letendre Robert Sargeant Brad Kulacz based Merrimack County Savings Bank and Meredith Village Savings Bank, which operate under the same mutual holding company, New Hampshire Mutual Bancorp. She joined Merrimack in 1990 as a bookkeeper and as her career progressed she served several roles in the finance department. In 2011, she was promoted to vice president, operations and reporting. In 2013, as part of the affiliation of Merrimack and Meredith Village Savings

Promotions Bank, she assumed responsibility for overseeing deposit and loan operations and collections for both banks. Arthur J. Letendre has been promoted to senior vice president/consumer loan officer. He joined Merrimack in 2002 and helped the bank build its indirect lending program. In 2013, he was promoted to oversee consumer lending at both Merrimack and Meredith Natalya Thibodeau Village Savings Bank. Robin Hefele has been promoted to assistant vice president/underwriting and processing at Merrimack County Savings Bank. She joined Merrimack in 2011 as a government loan underwriter. Robert Sargeant has been promoted to executive vice president and senior commercial lending officer. He also serves on the bankâ&#x20AC;&#x2122;s Loan Review, CRA, Risk, Information Security, Pricing, Compliance, Total Quality Management, and Asset Liability committees. Sargeant joined MVSB in 2000 as vice president/ commercial lender after a 25-year career at The Pemigewasset National Bank, including 13 years as vice president and senior loan officer. He was promoted to vice president and senior commercial lender in January 2009 and to senior vice president later that year. Brad Kulacz has been promoted to assistant vice president and branch manager for the bankâ&#x20AC;&#x2122;s main office in Concord. He joined Merrimack County Savings Bank as branch manager in 2013. He previously worked as a teller manager/senior customer service representative at Merrimack in Concord, from 2004 to 2006. Natalya Thibodeau has been promoted to assistant vice president, financial advisor. She joined Merrimack in 2008 and advanced to the wealth management department in 2011. Sean Skabo recently joined the commercial lending department as senior credit analyst at Merrimack County Savings Bank. He was previously AVP/branch manager of the bankâ&#x20AC;&#x2122;s main office.

National Bank of Middlebury

The National Bank of Middlebury, based in Vermont, has named Caroline Carpenter president and CEO. She succeeds G. Kenneth Perine, who will retire at the end of the year. Carpenter, a 17-year employee of the bank and current executive vice president, will take over as president and CEO on Jan. 1, 2015. She Caroline Carpenter started her career in Addison County in 1991 as a mortgage originator at Vermont Federal Bank. In 1997, she joined National Bank of Middlebury.

Pentucket Bank

Amy Barcelos

procedures.

Amy Barcelos has been promoted to assistant vice president/business process manager at Haverhill, Mass.-based Pentucket Bank. She has been with the bank for three years, most recently in the role of training officer. In her new role, she is responsible for retail systems and operations, with a focus on process improvement; including documenting and streamlining operational

Savers Bank

Southbridge, Mass.-based Savers Bank has promoted four team members to assistant vice presidents. They are: Elaine M. Stone, Lynn M. Greenhalge, Robert J. Landolina and Kris A. Cullen. Elaine M. Stone has Elaine M. Stone Lynn M. Greenhalge been promoted to AVP, human resources. She previously served as HR manager, HR administrator and several years as a senior credit analyst in the commercial loan department. Greenhalge and Landolina have been promoted to the positions of AVP/credit officer. Robert J. Landolina Kris A. Cullen Cullen has been promoted to the position of AVP/marketing manager. He joined the bank in October 2013 as marketing manager. He previously was the marketing manager at GFA Federal Credit Union.

SIS Bank of Sanford

SIS Bank of Sanford, Maine promoted three staffers. Anthony Cataldi, COO, has added the role of chief risk officer and was promoted to executive vice president. Cataldi has been with SIS for nearly three years and previously held senior management positions at community banks in New York and North Carolina. Nathan Milkins, assistant vice president, electronic banking, will now serve as assistant vice president and network administrator while retaining some of his electronic banking administrative duties. Dean Garnett, an IT technician, was promoted to information security officer.

TD Bank

Portland, Maine-based TD Bank has appointed Frank Benedict to the position of regional mortgage sales manager. Benedict, based in Portland, Maine, has more than 20 years of experience in the residential mortgage industry with specific focus on business development, financial management and performance Frank Benedict management. Most recently Benedict served TD Bank as mortgage operations manager, where he oversaw teams of loan processors and mortgage underwriters. He previously owned Informed Mortgage Solutions Inc. in Wayne, Penn., and held increasingly senior positions with H&R Block Mortgage.

The Village Bank

Anna Lemieux, named an assistant treasurer in 2012, is now assistant vice president/ project manager at The Village Bank, based in Newton. She Anna Lemieux

Sobeida Santana

Continued on next page

BANKING NEW ENGLAND

PERSONNEL FILE

Continued from previous page

Promotions

David Pennybaker Jr.

Featured Banks • Bar Harbor Bank & Trust • Berkshire Hills Bancorp

Corey Rouleau

joined the bank in 2008 as an assistant manager, and transferred to its operations department in 2009. She previously held various retail and lending positions with Danvers Savings Bank, North Shore Bank and Eastern Bank. Nicole Sloan was promoted to assistant treasurer/ business process manager. She joined the bank in 2009 as teller supervisor, with previous experience as a head teller with JPMorgan Chase. Sobeida Santana was promoted to assistant treasurer/branch manager. She joined The Village Bank in 2011 as an assistant Richard P. White manager, from Connecticut-based Jewett City Savings Bank, where she held the position of junior accountant. David C. Pennybaker Jr. and Richard P. White have been promoted to vice president positions at the bank. Pennybaker is now vice president of commercial lending; White is now vice president and treasurer of accounting. Pennybaker previously worked at Brookline Bank as commercial relationship manager, assistant vice president. White joined the bank as accounting manager in 2006, responsible for financial controls and financial reporting. Previously, he most recently held positions with Commerce Bank & Trust Co. and Middlesex Bank & Trust Co.

• Bristol County Savings Bank • Commerce Bank

Webster Five Cents Savings Bank

Donna M. Serwa has been named as assistant vice president, assistant risk manager/ security officer at Webster, Massachusetts-based Webster Five Cent Savings Bank.. She manages the bank’s CRA program, and, as security officer, she is responsible for the bank’s security program. Serwa joined Webster Five in 1994 as teller line supervisor/ assistant branch manager. She was first promoted to branch manager in 2000 and in 2006 was promoted to assistant risk manager/security officer.

• East Boston Savings • Eastern Bank • Florence Savings Bank • Leader Bank

Donna M. Serwa

• Hampden Bank • Katahdin Trust

New Arrivals

• Kennebunk Savings Bank

Eastern Bank

• Lake Sunapee Bank • Needham Bank • Meredith Village Savings Bank • Merrimack County Savings Bank • Middlesex Savings Bank

John Fallon

• National Bank of Middlebury • Savers Bank • South Shore Bank • SIS Bank • TD Bank • United Bank • The Village Bank • Webster Five 30 BANKING NEW ENGLAND

Robert Barnhard

Eastern Insurance Group, a subsidiary of Boston-based Eastern Bank, has added five insurance executives to its team: Gregory Grintchenko, CISR, senior vice president, personal lines sales manager; Anthony J. Murphy, senior vice president, employee benefits sales executive; David James, assistant vice president, personal lines sales executive; J. Christopher Madden, assistant vice president, personal lines sales executive; and Monica Quintal, assistant vice president, personal lines sales

executive. The company also appointed John Fallon as executive vice president in charge of its commercial lines division. Fallon, who joined Eastern Insurance in 1999 as a commercial lines sales manager, was formerly a senior vice

president at the company. Eastern Bank has also hired Robert “Bob” Barnhard as a senior vice president in the bank’s commercial banking division, where he is to start and lead an assetbased lending team. Barnhard has previously started three other asset-based lending groups and has managed more than $3.5 billion in loans. Previously, Barnhard served as the group head and director of commercial lending at Commerce Bank.

Florence Savings Bank

Florence Savings Bank, based in Florence, Mass., has named Barbara-Jean DeLoria to its executive management team, where she oversees the bank’s residential mortgage division. She is also a Danielle Drapeau commercial lending officer. She is a member of the bank’s executive committee, enterprise risk management committee and asset/ liability committee. The bank has hired Danielle Drapeau as a mortgage production officer. She

New Arrivals was previously an underwriter-officer with United Bank in West Springfield. Her experience includes underwriting loans that include FHA, VA, Fannie Mae and USDA Farmers Home. Susan M. Seaver has joined Florence Savings Bank as vice president/ mortgage originator for mortgage originations. She was previously vice president/mortgage officer with People’s United Bank.

Hampden Bank

Springfield, Mass-based Hampden Bank has named Arley R. Ewald as vice president and financial reporting manager, where she is responsible for Security and Exchange Commission reporting as well as day-to-day activity for internal and external financial reporting functions. Ewald was formerly the financial reporting officer at Chicopee Savings Bank, and before that worked for KPMG LLP as an audit associate.

United Bank

Nicholas J. Devanski has joined United Bank as a commercial lending officer. He previously served as commercial credit analyst/ commercial credit team leader with TD Bank NA. Prior, he had served as branch manager/ business development officer with Citizens Bank, following a promotion from an earlier position as Nicholas J. Devanski senior banker/assistant branch manager.

Katahdin Trust

Vicki L. Bessette has joined Katahdin Trust as vice president/commercial services officer. She began her banking career with Machias Savings Bank in 1980 as a teller and was promoted to computer supervisor in 1984. She then transitioned to Key Bank in 1988, and in 1998 she joined Bangor Savings Bank as assistant vice Vicki L. Bessette president/retail lending officer, and in 2005 was promoted to vice president/business banking officer, prior to joining Katahdin Trust.

Kennebunk Savings

Kennebunk Savings has hired Carol A. Estes as vice president/middle market lender, commercial lending. She is responsible for business lending in the seacoast region of Maine and New Hampshire. She serves on the board and loan committee for the Regional Economic Development Corporation, and is an affiliate member at New Hampshire Carol A. Estes CIBOR and a volunteer for the Workforce Housing Coalition of the Greater Seacoast.

Merrimack County Savings Bank

Peter Thompson has joined Concord, New Hampshire-based Merrimack County Savings Bank as a mortgage loan originator. Thompson is the first and only Green Certified Professional (CGP) in New England, and a Certified Aging-in-Place Specialist (CAPS), and is the first representative of a financial institution in New England to Peter Thompson achieve the CGP designation from the National Association of Home Builders.

Middlesex Savings Bank

Middlesex Savings Bank has promoted the following officers: John P. Dargin, sales and customer service officer, promoted to assistant vice president; Maud Dentico, business development officer, promoted to assistant vice president; Barbara A. Kennedy, community banking officer, promoted to assistant vice president; Robert E. Paulsen Jr., vice president, promoted to senior vice president; and Nicole I. Pecorelli, assistant vice president, promoted to vice president.

Needham Bank

Chris Gleason has joined Needham, Mass.based Needham Bank’s residential lending team as a vice president. He has more than 14 years of residential mortgage lending experience. Most recently, he spent 10 years with Mt. Washington Bank, a division of East Boston Savings Bank. Sandra Marcantuono joins Needham Bank as Chris Gleason assistant branch manager of the bank’s new Dover office. She started her banking career as a teller for Mutual Bank for Savings. Fifteen years ago, she started at 60 Centre St. working for Bank of Boston and through each merger and acquisition she has stayed in the same bank location.

SIS Bank

Sanford, Maine-based SIS Bank has hired Ward “Nick” Grant II as vice president of compliance, BSA, CRA and security effective. He has more than 30 years of professional banking experience in the areas of audit, regulatory compliance, BSA, bank security and CRA. Most recently, he served as finance service regulatory Ward Grant II compliance director/BSA-AML officer for Pay Flex Systems USA Inc., a division of Aetna. Previous posts include financial services regulatory consultant for M&M Consulting, vice president corporate compliance, CRA and bank security officer at Bar Harbor Bank & Trust.

South Shore Bank

Leader Bank

Michael Bonsey has joined Arlington, Mass.-based Leader Bank as executive vice president and chief credit officer. Bonsey spent the last 14 years with Bar Harbor Bank & Trust, where he had been chief risk officer since 2011. Ward Grant II

Joni Traficante has joined the South Weymouth, Mass.-based South Shore Bank as a vice president/commercial lender. She has more than 20 years of experience in the commercial banking and mortgage industry, most recently as a senior mortgage development officer with Santander Bank. BNE BANKING NEW ENGLAND