Banking New England March/April 2017 by The Warren Group

MARCH/APRIL 2017

INSIDE: TRANSFORMING YOUR LOBBY COULD SOLVE THE MILLENNIAL QUESTION

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

What Top-Performing Business Developers Know Best Practices from Commercial Banking’s Elite

A PUB LICAT IO N O F TH E WA R RE N G R O U P

Our 100 years tneans that wherever you are going, we can guide you there.

At Wolf & Company, we pride ourselves on insightful guidance and responsive service. As a leading regional firm, our dedicated professionals and tenured leaders provide Assurance, Tax, Risk Management and Business Consulting services that help you achieve your goals. Visit wolfandco.com to find out more

WOLF & COMPANY, P.C.

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

CONTENTS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

BANK LOBBY TO BANK LOUNGE

Transforming Your Bank’s Lobby Could Answer the Millennial Question

WHAT TOP-PERFORMING BUSINESS DEVELOPERS KNOW

MEASURING SUCCESS

Strong Customer Loyalty Could Be a Sign of Weakness, Not Strength

OVERCOMING OBSTACLES

When Life Insurance Impacts the Deal: Considerations for Lenders

BANK PROFILE

At Ledyard National Bank, It’s People First, Markets Second

BEST OF BRANDING

Wear Your Brand on Your Sleeve – And Everywhere Else

NOT ANOTHER ELECTRONIC BILLBOARD

Targeted Marketing is More Important Than Ever in Digital Spaces

PERSONNEL FILE

COMMUNITY GOOD WORKS

CORRECTION The January/February issue of Banking New England incorrectly identified the source of grants for affordable housing projects in partnership with banks across New England. The loans, grants and interest subsidies were made in partnership with the Federal Home Loan Bank of Boston, not the Federal Reserve Bank of Boston. We regret the error.

TWG STAFF CEO & PUBLISHER Timothy M. Warren Jr. PRESIDENT David B. Lovins

www.thewarrengroup.com

©2017 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.

IN CASE YOU MISSED IT

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

EDITORIAL EDITORIAL DIRECTOR Cassidy Murphy ASSOCIATE EDITOR Malea Ritz EDITORIAL INTERN Beth Siegert SALES DIRECTOR OF BUSINESS MEDIA George Chateauneuf PUBLISHING GROUP SALES MANAGER Claire Merritt SENIOR ADVERTISING ACCOUNT MANAGER Michael Lydon ADVERTISING ACCOUNT MANAGER Jon Patsavos ADVERTISING & SALES COORDINATOR Tori Blanchard CREATIVE/MARKETING DIRECTOR OF MARKETING & CREATIVE SERVICES John Bottini MARKETING COPYWRITER Mike Breed PUBLIC RELATIONS & SOCIAL MEDIA MANAGER Joe Kourieh SENIOR BRAND DESIGN MANAGER Scott Ellison GRAPHIC DESIGNERS Amanda Martocchio and Tom Agostino

BANK LOBBY TO BANK LOUNGE

Transforming Your Bank’s Lobby Could Answer the Millennial Question BY HILARY TROIA

Hilary Troia is vice president and co-owner of Office Gallery International (www. officegallery.net), which offers quality-crafted office furniture, space planning and design services for businesses of all sizes. She can be reached at hilary@officegallery.net.

Hilary Troia

BANKING NEW ENGLAND

icture yourself in a bank lobby. Almost any bank. What do you see? Chances are, your mind’s eye focuses on cherry furniture, an elaborate chandelier, hard, rigid chairs and lots of sage green and chrome accents. There is a “barlike” space, but all it houses are deposit slips and chained pens. Any people that happen to be in the lobby have most likely been born prior to 1975. The employees may be friendly and knowledgeable, but the environment is boring and predictable. Granted, new advances in banking technology have significantly reduced the need to physically visit a bank location, but technology may not be the only reason why there are fewer people to be found in a bank lobby these days. And if banks want to capture the future business of Millennials – especially as these individuals advance to the point where they’re ready to take out a mortgage or a home equity or business line of credit – banks need to do everything they can to entice Millennials to use their banks – both virtually and physically – here in the present. In fact, with their burgeoning purchasing power, Millennials are pushing virtually every industry to make decisions about what we’re doing to attract them. We need to create opportunities that are more welcoming for Millennials, and give them a good reason to choose one bank over another. We’ve all heard about the online bank Capital One and its efforts to “reimagine banking” by creating good-looking and contemporary cafés that – almost seemingly as an afterthought – also offer banking services. While this may not be a traditional pairing, these “banks” are creating an environment that Millennials are not only drawn to, but want to work in as well (another benefit that may catch banks’ attention). With so much competition, banks need to cater to their customers. These institutions need to think about what they can do to get their clients to come into the bank, to do more banking and to be introduced to additional products. The answer may lie in efforts to upgrade, change and update – to move beyond the impersonal while maintaining convenience, to highlight their tech-savvy capabilities while creating a space that people of all ages want to spend time in. This could be achieved by transitioning the more traditional but staid bank lobby into a more relaxed, collaborative banking lounge.

Adding contemporary furniture that combine a lounge-like, comfortable feel with a professional atmosphere is one way to accomplish this transition. Banking isn’t the only industry that’s evolved as a result of technology – new sofas have movable parts that can transition into semi-partitioned and sound-modified spaces that allow for private phone conversations, while also offering ports for users to plug into and charge their devices. Replacing hard, more formal chairs with soft seating in contemporary shapes like modular or serpentine chairs and strategically dotting the space with them also offer a soft, warm first impression. Bright and frequent colors and complementary patterns and textures also do the trick to transform a space from lackluster to lively, while still maintaining professional feel. Coffee bars are also popular additions to workspaces of all kinds these days, offering patrons an opportunity to talk with one another and linger. Adding one to a bank lounge could help to halt the rushed feeling people associate with visiting a bank, as well as gives customers another place to go rather than immediately heading for the teller line. Similarly, by converting current open space into collaborative workspaces, banks could attract remote workers, freelancers and other non-specific location workers away from the coffee shops and bakeries and into their own lounges. Banks should also consider making use of seldom-needed conference rooms by offering them to BNIs and other networking groups on a reservation basis. At a time when technology allows us to complete a financial transaction without going inside of a bank, why would we choose to go visit one? Especially as retail space is changing dramatically and service businesses are scooping up brick and mortar spaces, banks have an extraordinary opportunity to reinvent themselves. Banks that feature more up-to-date, contemporary and user-friendly environments could help to draw in customers – both current and new – and expose them to additional, bigger-ticket products and services. These initiatives will not only grow your client base, but will also strengthen the loyalty of your current customers – as well as offer you the opportunity to interact with them more frequently, by giving them a reason to come to the bank. BNE

SECRET FORMULA REVEALED!

Today’s banks are searching everywhere for a technology partner that does business the same way they do—a commitment to innovation and a focus on service. Well, look no further than CSI. Our innovative solutions and customer-centric approach are the secret combination you’ve been waiting for.

csiweb.com/Secret

Core Processing • Managed Services • Regulatory Compliance • Digital Banking • Electronic & Print • Payments Processing • Treasury Management

MEASURING SUCCESS

Strong Customer Loyalty Could Be a Sign of Weakness, Not Strength BY SUE HINES

Sue Hines is head of customer engagement at Informa Research Services, a provider of customer/member engagement and loyalty studies, competitive product rate and fee intelligence, and delivery channel experience measurements to the financial services industry.

Sue Hines

BANKING NEW ENGLAND

t’s one of the first lessons you learn in business school: Loyal customers are the best customers. They love your brand, wouldn’t dream of switching banks and have been with you for years. Focus on loyalty and you’re sure to beat the competition, right? Wrong. Loyalty isn’t everything. While there is inarguably a benefit to having existing customers evangelize your brand, particularly in a social media world, loyalty as a single measure isn’t all it’s cracked up to be. In fact, strong loyalty is often a sign of underlying problems. First, it’s important to look at loyalty for what it is: A look that sounds like it evaluates customer happiness but really measures how willing a customer might be to leave for another brand. “Loyal” customers can be the kind you really want, the ones who recommend your bank to friends, post on social media often about their experiences and go to your bank to buy more products and services from you. Loyalty could just as easily be a measure of apathy. Think about it: When a customer says she is loyal, the assumption is that she’s perfectly satisfied with her service. But sometimes a customer just isn’t interested in making a move. It’s the law of inertia. Someone might want to switch to another brand, but the thought of cancelling an account, transferring assets and buying completely new products is just more trouble than its worth. Some

customers might characterize an unwillingness to move as loyalty. And then there’s the issue about generation. Customer loyalty is higher with older generations than, say, Millennials. In fact, research shows loyalty weakens consistently from old to young customers. For instance, data from Informa Research Service’s SEA Score, which measures member and customer engagement, show that those over 55 years of age – the Baby Boomers – are 37 percent more likely than Millennials to be loyal to their financial institutions. Or, stated the other way, Millennials are 73 percent less loyal than Boomers. Knowing that, having high loyalty may correlate to having an aging customer base. While those are stable customers, they are often not growth customers, certainly not the ones who will be seeking new business loans, buying a vacation home or increasing deposits for saving. For those younger customers, loyalty doesn’t matter. They want competitive rates, a strong online experience, convenience and execution. The whole idea of loyalty is foreign to them, so any focus you put on loyalty in marketing to these high-growth customers is misplaced. That isn’t to say that loyalty isn’t important. You obviously want to cultivate customers who remain with you for a long time. But it is a single data point. Without context, and a strategy beyond simple customer retention, you might be putting your future growth at risk. BNE

Risk Management Services

100%

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ergo ita: non posse honeste vivi, nisi honeste vivatur? Utinam quidem dicerent alium alio beatiorem! Iam ruinas videres. Esse enim, nisi eris, non potes.

Risk Assessment

Disaster Recovery

Digital Forensics

Security Training

IT Assurance Services

Vulnerability Assessment

Penetration Testing

Social Engineering

Wireless Security Assessment

IT Audit Services

IT Audit

Compliance Gap Analysis

IT Controls Review

One Company, Many Solutions Cybersecurity concerns? We have a solution for that.

gravoc.com | (978) 538-9055

OVERCOMING OBSTACLES

When Life Insurance Impacts the Deal: Considerations for Lenders BY DAN DORAN AND DAVID HILLELSOHN

Dan Doran, CVA, is founder of Quantive Valuations, a certified valuation practice serving privately held businesses nationwide. David Hillelsohn is president of DHill Financial LLC, an independent insurance agency focused exclusively in protection solutions for businesses and the people they support. For more information visit www.quantivevaluations.com or www.dhillfinancial.com.

Dan Doran

David Hillelsohn

BANKING NEW ENGLAND

or those of us entrenched in the business valuation experience, there is nothing more satisfying than seeing good deals get done. Taking time to properly assess the value of a project not only reduces the cost to the borrower; it can positively impact some of the ancillary expenses related to the project. One of those ancillary expenses we often see associated with larger transactions is the purchase of life insurance, which can be used to protect the interests of the lender and all parties connected to the borrower and other key members of the transaction. Unfortunately life insurance as a requirement of a loan agreement can be an impediment to closing more business. Commercial lenders should keep these important tips in mind when

broaching the subject of life insurance with existing and potential clients.

Considerations for Commercial Lenders

It’s a positive. Having a life insurance policy or life insurance policies in place on the life of a borrower or a key person to a project should be a positive sign – they value themselves and the people who depend upon them for survival. When considering the credit-worthiness of an applicant, we believe that having existing coverage in place, regardless of type, provides insight into the borrower. The duration of coverage is also relevant. There are many parties involved. Insurance can ensure that the financial responsibilities aren’t left to others who lack the skills or preparation

to succeed, and focusing on the impact to others takes the focus away from requiring life insurance as an expense associated with a loan. Understand that there are other people that depend on the borrower for financial support, and having adequate levels of life insurance protection is good for everyone. It is normal for a lender to take the position that you want to be repaid for the loan, and you likely take the necessary steps to have proper collateral and strategy for potential loss recovery. De-risking the business adds value. As a valuation professional, we’re constantly seeking to understand what risk factors influence value in a company. Overdependence on a key employee or owner represents a single point of failure and negatively impacts value. Insuring against this risk can positively impact value by mitigating that risk factor. Understand the need and terms. The better you understand the actual need, the more targeted the solution can be for the borrower. This includes aspects such as dependence on a key person, the age of the borrower and/or the magnitude of the project. For example, a 64-yearold who needs $5 million to complete a construction project that takes 15 years may not need $5 million of protection for the entire duration of the project. A term life insurance layering strategy could be utilized to deliver the appropriate amount of coverage for different stages of a project reducing the financial burden to the borrower; in some cases, like a 64-year-old borrowing $5 million, this savings can be significant. A loan from you is better than a loan from their insurance policy. While term life insurance of different durations from 10 years out to 30 years or longer is the product de jour for most people, there are still individuals, especially high income earners, who may own permanent life insurance with significant cash value. The cost of a loan from a commercial lender is typically less expensive than a loan from a life insurance policy.

Most people believe that because the cash value in their policy is already their money that they can take a loan without any tax or expense exposure, but this is not the case. Unpaid loan interest is considered additional economic benefit derived from the contract, which increases the return above basis. This could lead to a tax liability even though the cash value has been stripped from the policy. Thus we advise you consult with your tax adviser and insurance professional before taking loans against the contract. Cash value is collateral. Cash value in a life insurance policy can be considered collateral to be assigned against the value of the loan. Not only is this asset a dollarfor-dollar increase to business value, but also it’s an opportunity to reward the borrower for owning liquid and non-

depreciating assets. Be mindful that the policy is properly owned and that there are no other rights to the policy values. Typical loan value is 90 percent of the value in the policy. A sound financial team. This may be obvious, but an experienced team of professionals who can assess the value and scope of the project and then use knowledge of the insurance marketplace to find the best solution is a value added component to the lending process. When clients feel that you’re sitting on the same side as them, looking for ways to help them succeed with a focus on not only getting it right today, but getting it right every step along the way, it shows that you have a well thought out concept of their vision with a strategy to deliver the desired results. BNE

INNOVATION LEADS TO SUCCESS Improve your operations with a firm that provides innovative solutions designed to help you thrive in a regulatory environment. From risk management, to tax planning, audit and assurance, compliance, or executive search, we’re here to help.

is now

Victor Howe, Principal Financial Institutions | 617-984-4442 Edward Blum, Director Professional Search | 781-419-9246

CLAconnect.com BANKING NEW ENGLAND

BANK PROFILEVULNERABLE CLIENTS PROTECTING

CONTINUED FROM PAGE 6

At Ledyard National Bank, It’s People First, Markets Second BY LINDA GOODSPEED

t Ledyard National Bank, growth is not about markets so much as people. “The way we plan to enter new markets is to look at opportunities to hire qualified employees,” said Kathryn G. Underwood, president and CEO. “We look at people first, markets second. Products are commodities. You can get a loan anywhere. Where we really shine is we understand our clients. We help them, get to know them, understand their goals and objectives, and then provide products and advice to help them reach those goals as well as a strong educational component so the client becomes a partner in the process. That model is what really defines us. It starts with people. The market becomes secondary.” At 26-year-old Ledyard, it’s always been about people. Headquartered in Hanover, New Hampshire, Ledyard formed in 1991 in response to the loss of several local community banks being sold or merged into larger institutions. “We decided we wanted a bank connected to the community,” explained Dennis Logue, board chair and one of the original founders. The group raised $10 million, double its initial goal, and opened for business on May 22, 1991, with one location in downtown Hanover, 12 employees and a full array of commercial, residential and retail lending and deposit products and services. The bank expanded quickly, and today has $475 million 10 BANKING NEW ENGLAND

in total assets, 110 employees and nine offices in Hanover, Lebanon, Lyme, New London, West Lebanon and Concord, New Hampshire, as well as one in Norwich, Vermont (where the bank is chartered). Ledyard established an investment and trust services division in 1994. Underwood, who arrived in 2005, has expanded the division, now known as Ledyard Financial Advisors, into a full service wealth management firm that provides investment, tax and wealth management services to affluent individuals, families and institutions. “It’s more than just investing money,” Underwood said. “We work with clients on all aspects of their personal and financial lives – tax planning, estate planning, charitable giving, succession planning. It’s very comprehensive, including the lending piece.” Ledyard Financial Advisors now has more than $1.2 billion under management – unusual for a bank Ledyard’s size – with clients in 36 states and six countries. Logue, who did all the original spreadsheets for the bank by hand, said the wealth management division took off faster than expected. “We’re terribly pleased with how it’s come along,” he said. “We were hopeful it would do this well, but it took off a little sooner than we thought.” He said neither division – the community bank

or private bank – dominates the business model. “We’re a very integrated organization. There’s always the danger of letting community banking swamp the private bank, and [Underwood] has done a very good job of keeping them in balance,” Logue said. “The senior management team is comprised of both banking and wealth management. They pay attention to each other. Everybody’s involved in strategic discussions.” Underwood said Ledyard’s loan portfolio of $295 million is comprised of about $160 million commercial, $110 residential mortgages and the balance consumer loans. “We’d like to grow our commercial loan portfolio,” Underwood said, noting the bank’s recent move into Concord at the end of last year provides that opportunity. “It’s a different market than here in the Upper Valley,” which is dominated by Dartmouth College and Dartmouth Hospital, she said. “We don’t have a lot of small businesses here. The opportunities in our current market are residential and personal relationships. Concord presents the opportunity to grow our commercial products. We have a strong commercial team, a strong credit team. We have the capacity and team to grow.”

Logue said Ledyard, which was ranked among the Top 200 publicly traded banks and thrifts in the U.S. by American Banker Magazine for the second year in a row based on return on average equity across three years, has lost money only once: The recession of 2008-2009. “We put more money than we needed into reserves that year,” he said. “Since that time we haven’t had to add to our reserve account. We were probably overly cautious, but probably prudent in ’08 and ’09.” As for the future, Underwood said Ledyard will continue to grow in all of its markets in the Upper Valley, Lake Sunapee region, and especially its new branch location in Concord. She said the bank will also continue to add to its technology offerings and expand its client education programs and networking opportunities. “Many businesses in our market are small businesses,” Underwood said. “They don’t have a lot of resources, money or staff. We try to help them in all areas of their business. We offer these events for them to learn about a topic, take back to their business, network with other businesses, establish relationships.” It’s all part of Ledyard’s original mission: A local bank closely connected to its community. BNE

After a Generation, Women Bankers Now Poised to Join the C-Suite By Linda Goodspeed

Kathryn G. Underwood is a rarity in banking: a female president and CEO. Although there are no official statistics on the number of female bank CEOs, estimates put the number at around 5 to 6 percent. But Underwood, president and CEO of Ledyard National Bank in Hanover, New Hampshire, Kathryn G. Underwood thinks that’s about to change. “I believe in today’s world, there is no better time to be a female in banking,” she said. “I think it took a generation to get through to where we are today.” Underwood knows from firsthand experience: She was part of that breakthrough generation. A 1981 graduate of the University of Southern Maine with a degree in economics, Underwood is also a certified financial planner. But when she applied for her first full-time banking job, she was told by HR that “‘women are either tellers or secretaries, and which one did I want’ to be?” “Banking was a very different environment at that time,” she said. “I think today women are respected for their talents. I think there are significant opportunities for women going forward.” Dennis Logue, board chair at Ledyard, agrees. He said the board was not thinking male or female when it hired Underwood to lead the bank in 2005. “We were going for the best available players. Kathy was the best person we interviewed. We have been delighted with her performance. She has done a remarkable job,” he said.

Underwood’s career advice to young women is the same advice she gives young men: “Be willing to move forward even if the path is not particularly clear,” though she acknowledges this advice is particularly true for women. Rather than stay at that first bank, she left and went to another. “I think women, especially, wait to be asked, wait until they are 100 percent confident they will succeed before moving forward,” she said. “I think women need to take chances in their career. It’s OK to fail. I encourage women to be uncomfortable, to push themselves.” From her own experience, Underwood also pushes the value of getting involved with nonprofit organizations. Over the course of her career, she has held leadership positions with local and state chambers of commerce in Maine and New Hampshire, the American Heart Association, United Way and many others. She is past president of both the New Hampshire and Maine bankers associations, and was director and audit chair of Federal Reserve Bank of Boston from 2009 to 2014. Currently, she is national director of the Independent Community Bankers of America. “I used my experience with nonprofits to develop skills and make contacts I brought back to work,” she said. Finally, she suggested, look for mentors. “When I talk to folks at the bank, male or female, I tell everybody to find mentors,” she said. “Reach out. It’s not necessarily a case of, ‘Will you be my mentor?’ You can have many different mentors. I have had many who helped promote and guide me during my career. You can’t underestimate the role of strong mentors.” BNE BANKING NEW ENGLAND

SUCCESS STORIES

What Top-Performing Business Developers Know Best Practices from Commercial Banking’s Elite

By (Dima) Neil Berdiev

s commercial banking industry’s profit margins near retail grocery business, demand for performance at all levels of an organization becomes critical. It is vital to understand what best performers do and how they do it, and to apply that knowledge within your team. Below is a collection of the best practices from some of the best business developers in our business. This know-how can be easily applied in other industries.

1. Educators first and foremost

Best business developers are educators, whether they deal with clients or their colleagues, including credit and risk management professionals. These successful peers may be educating their clients about the bank’s products and services and how they can solve their problems. Or they may meet with their credit colleagues to familiarize them with how a particular industry or borrower operates.

2. Not the most important team member

The true success of a commercial bank lies in the ability of different teams to work well together, solve problems, and jointly and zealously overcome conflicts. Best teams have no revenue generators and cost 12 BANKING NEW ENGLAND

centers, but everyone works toward common goals, one of which is becoming a strong profit center. High performing sales executives know well that they are only as good as their team’s weakest link.

3. Be a facilitator

Truly successful business developers are the glue that pulls together the business development and credit processes and helps make things happen. They help steer a deal through the hurdles of competitive situations or the difficult situations of a client’s intent to move the relationship. One of my former colleagues was always known for understanding what and why each team member needed something and that everyone had a job to do. As a result, he worked more closely than any other team member with credit colleagues to ensure that he had all the most relevant credit risk angles covered.

4. Don’t change the system in the middle of a deal

Problems arise on just about every deal at various points of the credit process. Perhaps the loan system does not work well, the credit policy is too stringent or outdated, or the credit team does not have sufficient resources to support relationship managers. Whatever the

their relationship managers are actively thinking what they will need to do to support the client in the next few years, if the plan is to grow. Some solutions may be in starting discussions with another commercial bank and potentially bringing it on in a club deal basis.

7. They are not your clients

It is easy to get caught in the riddle of who “owns” the clients, especially if you’ve had relationships with management teams for years or decades. The sense of ownership can even be stronger if you brought those clients to your current organization, and even more if they’ve been following you from organization to organization. It is not always easy to recognize that your employer’s name is on the paycheck, and it is your employer who will bear the loss, should something go wrong with the relationship.

8. If you can’t be hyper-organized, you are toast

The job of a relationship manager is a constant juggling of clients’ needs that can range from complex annual meetings to fire drills to daily administrative requests. If you have a few dozen accounts, the day of an established relationship manager may remind the screen of an air traffic controller with lots of things happening concurrently (without the risks of overseeing human lives in the air). Top performers know what’s happening at any given point in time, what needs to be done, when, where and how.

9. Proactive communication

Another quality of highly successful business development professionals is constant and proactive communication with various parties from clients to internal and external business partners. Many things can fall apart if you do not inform them of timelines and interim deadlines, what you and they will need to do and should expect, what the process is like and many more factors. Lack of proactive communication is similar to being stuck underground on a subway and having no information. You may not always appreciate the information but at least you know what to expect, having some ability to change the course of action and make alternative arrangements.

10. Ask for help issues, successful commercial bankers know that complaining, expressing discontent, fighting or trying to change the process instead of getting the deal done is counterproductive.

5. Selling by focusing on credit

Some of the most successful business developers were first and foremost experienced credit people. At a minimum, sales executives with limited credit background pair themselves with experienced credit professionals to offer a strong balance to their sales background. By wearing a credit hat, top performers are able to truly understand the clients’ financial situation, what’s behind the numbers and how financing elements connect with operations, strategy and direction for the company.

6. Think several steps ahead

Accomplished business development professionals do not operate in today. They look at clients’ current needs and challenges, and they also take the time to understand where they are likely to be a year from now and how it will affect the banking relationship. Perhaps the client is already reaching the organization’s lending capacity. If that’s the case,

For those who like and need to be in control, and business developers are certainly in that category, asking for help is perhaps one of the hardest things to do. It is especially hard if your credit is not performing as expected. Yet the best in our field know that waiting and hoping that things will work themselves out is the strategy that is fraught with unpredictability and is contrary to being in charge. After a few times of trying to reach out and ask for help, it becomes easier and easier to ask.

Final Thoughts

Not meeting sales goals won’t kill your career, but bad credits will. If your organization is heavy into sales goals, sales incentives, performance management, and dealing with underperformance quickly, there is always a risk that you may lose your job for not meeting your sales goals. As long as you’ve had strong years, decline in sales performance can be carried by those better years for some time. What can absolutely kill a commercial banking career is a credit gone bad. BNE (Dima) Neil Berdiev is a managing partner and co-founder of DNB Advisory LLC, a Boston-based advisory firm. It provides advisory and on-demand credit services for commercial lenders. He may reached at dnb@dnbAdvisory.com or (617) 233-1405.

BANKING NEW ENGLAND

PROTECTING BEST OF BRANDING VULNERABLE CLIENTS

Wear Your Brand on Your Sleeve – And Everywhere Else BY JACK DOHERTY Jack Doherty is CEO of College Hype, an apparel and promotional product company located in Dorchester. Visit www.collegehype.com for more information.

Jack Doherty

14 BANKING NEW ENGLAND

s a bank CEO or marketing director, you understand the importance of convenience and accessibility to your customers. The industry has transformed from one where “banker’s hours” meant that branches closed at 3 p.m. and were not open weekends, to a 24/7 world. Most banks have branches open on weekends, online banking around the clock, apps that allow people to deposit checks remotely – and so much more. Technology has significantly moved the dial for convenience. But being at the top of the curve technologically is not enough of a competitive advantage. Customers have come to expect this level of service. If banks don’t do a comprehensive job of letting potential customers know everything they do and offer, they may be among the industry’s better-kept secrets. When it comes to marketing, many banks have strong social media presences. Many have strong traditional advertising and public relations campaigns. These are all important. However, bank CEOs and marketing directors should not overlook the tried tried-and-true customer and community outreach programs, where they bring the message directly to their customers and the community. Visibility and brand awareness are critical in every marketing effort, and it begins with the bank’s logo. This is perhaps the most valuable piece of marketing that every bank owns. Banks invest considerable funds in logo and brand development, and this logo is the bank’s ticket to greater visibility. A logo must have a higher purpose than simply being used for business cards, letterhead and branch windows. Banks can expand use of their logo through the use of both giveaways and community outreach programs. Incorporating the logo on materials – apparel, promotional products and leave-behinds – can serve to increase customer retention and customer attraction. One strategy we have seen is a bank will occasionally have its vehicles “wrapped” with the bank’s logo, effectively making these vehicles into moving billboards for the bank. It’s very powerful visually to see a vehicle with a large bank logo motoring along I-95 or cruising through downtown Boston’s streets. A popular outreach strategy is hosting events in community schools. Banks sometimes offer financial literacy programs taught in elementary, middle and senior high schools. In so doing, it makes perfect sense to create a “leave-behind” textbook with the bank’s message (and logo!) prominently displayed. This will reinforce the bank’s message of community involvement; this goodwill gesture, many would argue, is far more persuasive than traditional

advertising – although good marketing campaigns embrace a variety of methods. Consider the importance of the logo as a brandbuilders when it comes to apparel. A logo does wonders when displayed on polo shirts, blazers, sweatshirts and other items of clothing. Every time a representative of the bank is in the community – whether at a golf tournament, speaking at a school career day, or attending a Chamber of Commerce event – he/she should wear apparel that prominently displays the bank’s logo. This “eyeball to eyeball” visibility helps propel the bank to the “top of mind” position and also conveys the message that the bank has a strong team and culture. In effect, the bank representative becomes an ambassador for his/her lending institution. Many banks are active in their communities, often sponsoring road races to help raise funds for cancer research, or other important causes. In these settings, personalized T-shirts help keep the name of the institution prominent, along with its alignment with this cause. We also see bank officials select apparel to promote local sporting teams – such as in support of the Red Sox as they approach playoff season. And who could have resisted Patriots wear leading up to the recent Superbowl? Another popular use of the logo is with a promotional product. These include everything from pens to calculators to flashlights. These are great keepsakes for customers and possible customers. Hightech gadgets are popular among bank giveaways. One popular item is the six-in-one charger, which plugs into a computer or a vehicle’s power source and can charge multiple devices at one time. Also popular is the portable power pack, which will boost the battery life of a cell phone; if someone is at a conference all day, or out on the golf course, this is a remedy. Calendars with local photographs are also a popular item. And, ironically, so is the pen. Most of us recall that bank lobbies often chain their pens to the desk. Yet many bank officials find pens to be an effective way to brand an institution. One additional item gaining in popularity is the shopping bag, created with recycled materials and branded with the bank’s logo. Whether it’s piggy banks for elementary schools, apparel in support of schools or historic building restoration, or products given out in the community, it makes strong sense for a bank to brand itself through these community outreach activities. For most banks, a “more rather than less” strategy for marketing is what works. Don’t overlook the logo on promotional products or apparel as part of the strategy. It “wears well.” BNE

! EW N

introduces

Self-Service Coin Centers MADE SIMPLE, COMPACT, and AFFORDABLE

Simple One Button Operation Easy to read, prompting display and instructional photos 423/4”

Compact

Less than 2’ x 11⁄₂’

AFFORDABLE As low as

$7,500

171/2

”

400 SERIES 233/4

”

CHOICE OF OUTPUT Model 405 Full sort with exact bag stops for 5 bags: 1¢, 5¢, 10¢, 25¢, 50¢/$1; programmable for Federal Reserve half or full bags Model 424 Mixed coin output to 4 bags, programmable by weight or piece count Model 401 Mixed coin output to a vault

NOT ANOTHER ELECTRONIC BILLBOARD

Targeted Marketing is More Important Than Ever in Digital Spaces BY ACHIM GRIESEL Achim Griesel is president at Haberfeld Holdings, a data-driven consulting firm specializing in core relationships, customer, and profitability growth for community-based financial institutions. He can be reached at agriesel@haberfeld.com or (402) 323-3793.

Achim Griesel

arketers talk a big game about segmentation, big data and predictive modeling – and then they put up a billboard or run a radio or newspaper ad. What if best performers in the retail world operated the same way? Have you seen a lot of Apple billboards? How about Starbucks radio or even TV ads? Let’s go a little smaller than these two giants. Do you see broad-based targeting from the best local or regional retailers? It doesn’t matter if your marketing channels are traditional, digital, or both; don’t fall in love with your broad-based branding approach and forget to target the right audience. The same is 16 BANKING NEW ENGLAND

true in banking. In acquiring and deepening core customer relationship, targeting is key. Figure out who your best prospects are and market to them with an omni-channel approach, instead of putting up another billboard – online or in the real world. Even in the digital age data suggests that customers’ selection of their primary FI is based on convenience patterns. Financial institutions have a wide array of data that can be used to determine whether a potential customer is a good prospect or not. Locations. Most community-based FIs generate 95 percent or more of their new

relationships in the branch. While customers will handle the vast majority of their transactions online, they still start that relationship, at least the core relationship, at the branch. As the branch is still important, the geographic reach from that branch should be determined. But don’t use this to figure out who you should market to; use it to figure out who should be analyzed in your targeting model. Customers. What do they tell us? Customer-specific data should be part of any predictive model, as customers demonstrated with their action that we are their primary FI. Our customer data can also teach us a lot about market demographics. If the goal of your outreach is not acquiring new primary accounts, but rather deepening existing relationships, your own customer data should also be a major component of your model. For your existing customers, you don’t just know what products they have – you know where they spend their money! Big data. Today we have an almost unlimited amount of data available. The key to using it is to determine what data points are most important and predictive. Knowing a potential customer’s habits and their footprint, by tabbing into their available cell- and GPS-based data, is a powerful addition to your predictive targeting. After all, don’t we all carry that phone with us 24 hours a day? In the digital age targeting becomes even more important. An single “billboard” – or the attempt to benefit from potential customers searching for their next financial institution – is not enough, and honestly may not be productive at all. This is where banking is different from other retail businesses. Potential customers are much less likely to go online and search for the next core banking relationship. When they are ready to move on, they usually already know which institution they want to move to. You have to get in the head of your next potential customer with your digital and traditional marketing prior to them knowing that they are looking for a new banking relationship. In the old days, a banner in front of your branch and some inside and outside

signage may have been enough for that. Today, this needs to cover all channels, digital and traditional. But even more importantly, it needs to be highly targeted. Once your predictive model outlined above helps you identify the best targets for your institution, you need to get in front of that specific group in a one-to-one setting whenever possible. Omni-channel. Don’t operate your digital and traditional channels in silos. Traditional approaches like branch signage and mail are still extremely effective. Both of them target the folks that you have identified as your best potential customers. Transitioning this to the digital channels, follow the same approach and look how you can highly target your best prospects. Tactics like IP targeting or targeting customers through their social channels fit the mold perfectly. Contextual targeting based on life changing events provides another valid option. Frequency. This is definitely an area where we have channel variation. Digital channels allow outreach to customers at

a much higher frequency. They also allow the flexibility of reaching your target segments with better customized message and a different frequency rate based on the targeted prospect. On the flipside it will likely take several outreaches prior to a customer responding to a digital ad. Offer. Lastly, the importance of your offer has not changed. Customer-centric models and good products are the key, and an incentive-based tiebreaker can be very effective. Good service is an impossible differentiator as an offer – I have not seen any institution advertise average service. On the flip side, good service – or, even better, exceptional service – will make a big difference when it comes to referrals. Most of the core principals of marketing have not changed. They apply in the traditional and digital marketing areas. Targeting the right prospect, with the right offer and the right frequency is key. Don’t fall into the trap that digital marketing can’t be targeted or does not allow the one-to-one communication most effective in every channel. BNE

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

National Marketing Award Winner

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

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

PROTECTINGFILE VULNERABLE CLIENTS PERSONNEL

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

Featured Banks • BankNewport • Berkshire Bank • Blue Hills Bank • Canton Co-operative Bank • Coastal Heritage Bank • Customers Bank • Dedham Savings Bank • Eastern Bank • Franklin Savings Bank • Ledyard National Bank

Appointments and Elections Berkshire Bank

Mechanics Cooperative Bank

Pittsfield, Massachusetts-based Berkshire Bank announced that it has named Jason Edgar as director of wealth management and interim CIO. In his new role, Edgar will lead Berkshire Bank’s wealth management initiatives and oversee its investment process. Edgar joined Berkshire Bank in 2014. Allan Costello has also been appointed as president of the bank’s wholly-owned subsidiary First Choice Loan Services Inc. Costello will set corporate policies and procedures and will continue to serve as executive vice president for the bank’s home lending division leading its sales and operations functions including loan origination, underwriting, compliance, processing and servicing.

Taunton, Massachusetts-based Mechanics Cooperative Bank announced the appointment of Richard Falzone as vice president and commercial lending Richard Falzone officer. Falzone joins Mechanics Cooperative Bank with several years of banking and management experience. He began his career in banking in 2008 with Sovereign Bank, where he helped identify and provided appropriate financial solutions through effective cross-selling techniques and produced total financial integrated solutions for his customers.

Dedham Savings Bank

New England Business Brokers Association

Dedham Savings Bank announced that Tracy E. Harvard, senior vice president of residential lending, was chosen to serve as a member of the board of Massachusetts Mortgage Bankers Association.

Jennifer Mason, Customers Bank vice president and SBA lender in the New England market, was elected as a director to the New England Business Brokers Association board by the association’s membership.

Awards and Accolades Canton Co-operative Bank

• Mechanics Cooperative Bank • Needham Bank • Webster Bank

April Joy McKee

Massachusetts-based Canton Co-operative Bank announced that Branch Manager April Joy McKee received her “30 Years of Service” Award.

Ledyard National Bank

Kathy Underwood, president and CEO of New Hampshirebased Ledyard National Bank, was honored as the recipient of the 2017 Crystal Heart Award at the American Heart Association’s 4th annual Upper Kathy Underwood Valley Go Red for Women Luncheon in February.

Franklin Savings Bank

New Hampshire-based Franklin Savings Bank honored three employees with a Vision Award, a distinction bestowed each year to individuals who make a difference with their customers and co-workers by Justin Keith and living the bank’s vision. This Mary Kay Haines year’s recipients are Mary Kay Haines, personal banker; Justin Keith, electronic services and deposit operations specialist; and Keith Laramie, network services technician.

18 BANKING NEW ENGLAND

Promotions BankNewport

Rhode Island-based BankNewport announced the promotion of Paul J. Kloiber to vice president and branch sales manager of the bank’s Cranston office. Kloiber joined Paul J. Kloiber Dariel A. Blanco BankNewport in 2015, most recently serving as vice president and manager at the Newport Branch. He is responsible for branch operations, business development and staff development. Dariel A. Blanco was also promoted to assistant vice president and community lending officer. He will be responsible for identifying, developing and originating residential mortgage loans in the Providence County geographic market, in addition to providing education and awareness to community members regarding new home ownership financing. Blanco comes to BankNewport from Coastway Community Bank, where he served as a mortgage loan officer for the Providence, Rhode Island market. Evan J. Rose was promoted to branch sales manager of the bank’s Newport office. He will be responsible for branch operations, business development and staff development. Rose joined BankNewport in 2010, most recently working as branch operations manager at the Middletown office.

Webster Bank

Massachusetts-based Webster Bank announced that Debra Drapalla has been promoted to Boston regional president. She succeeds Paul Mollica, who will be retiring, but who will continue to serve as an ambassador for Webster.

New Arrivals Blue Hills Bank

Hyde Park, Massachusettsbased Blue Hills Bank has added Laura J. Mullins as vice president and mortgage consultant to its growing home lending team. Mullins has more than 25 years Laura J. Mullins Evan J. Rose in the mortgage industry, most recently as a production manager and loan officer for PrimeLending. Mullins previously served as a vice president/loan officer at Mortgage Network and owned and operated her own mortgage company earlier in her career.

Coastal Heritage Bank

Mechanics Cooperative Bank

Taunton, Massachusettsbased Mechanics Cooperative Bank announced the following employee promotions. Thomas Steele has Thomas Steele Jorgelina Moreira been promoted to first vice president of information technology. Steel began his banking career at Information Resources Inc. In his new role, he is responsible for managing and supporting all bank technologies, including Karen Capelo Kristen Dussault development, implementation and administration of the bank’s management program and business continuity program. Jorgelina Moreira has been promoted to first vice president. Moreira began her banking career at First Federal Savings Bank of America. She worked for Slade’s Ferry Bank before taking a job in 2008 with Mechanics Cooperative Bank. Karen Capelo has been appointed to assistant vice president and retail banking manager. Capelo has been in banking for the past 29 years and began as a teller for Taunton Savings Bank. She also worked at Sovereign Bank and Community Bank. Kristen Dussault has been named assistant vice president of human resources. Dussault began her banking career in 2002 at Lafayette Federal Savings Bank.

Richard Crowley

Weymouth, Massachusetts-based Coastal Heritage Bank announced that Richard Crowley has joined the bank as senior vice president and chief information officer. Crowley joins the bank from Citizen’s Bank. He also previously held a variety of IT roles at Rockland Federal Credit Union, Radius Bank and BankBoston.

Eastern Bank

Sujata Yadav

Boston-based Eastern Bank announced the appointment of Sujata Yadav as senior vice president and head of consumer lending. Yadav, who most recently served as senior vice president and head of sales growth at Citi Cards North America, brings more than 13 years of experience in financial services marketing, product management and business development to Eastern Bank.

Ledyard National Bank

Paul St. Martin

Hanover, New Hampshire-based Ledyard National Bank announced Paul St. Martin has joined as vice president and information technology officer. St. Martin comes to Ledyard from Lake Sunapee Bank where he was information technologies manager for the past 15 years.

Needham Bank

Joseph P. Campanelli has joined the Massachusetts-based Needham Bank as CEO and will succeed Mark Whalen, who announced his retirement earlier this year. He began his banking career at Hartford National Bank and later worked at Fleet Bank, Sovereign Bank and Flagstar Bank. BNE BANKING NEW ENGLAND

PROTECTING GOOD VULNERABLE COMMUNITY WORKS CLIENTS

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

BankNewport

Featured Banks • BankNewport • Bristol County Savings Bank • Charles River Bank • Country Bank • Dedham Institution for Savings • Franklin Savings Bank • HarborOne Bank

Rhode Island-based BankNewport partnered with Coventry High School and West Warwick High School to sponsor a youth financial literacy program during the current academic school year.

Bristol County Savings Bank

• Jewett City Savings Bank • Newburyport Five Cents Savings Bank • Seaman’s Bank • Southbridge Savings Bank • Webster Five

Massachusetts-based Bristol County Savings Bank recently presented $34,000 in grants through its foundation to five Pawtucket, Rhode Island area nonprofit organizations.

Charles River Bank

Rhode Island-based BankNewport partnered with Coventry High School and West Warwick High School to sponsor a youth financial literacy program during the current academic school year. 20 BANKING NEW ENGLAND

Country Bank

Ware, Massachusetts-based Country Bank announced that it donated $50,000 to the Quaboag Valley Community Development Corp. to assist in its commitment to economic development and helping small businesses grow and prosper in the Quaboag Hills Region.

Dedham Institution for Savings

Massachusetts-based Dedham Institution for Savings Foundation donated $2,500 to OUT MetroWest to help fund its Nexus Program, an educational, social and supportive program for LGBTQ and allied youth in grades six, seven and eight.

Franklin Savings Bank

New Hampshire-based Franklin Savings Bank announced that approximately $5,000 has been donated to local charities through its Buzz Points program.

Jewett City Savings Bank

HarborOne Bank

Massachusetts-based HarborOne Bank’s Caring Crew donated and wrapped holiday gifts for a dozen families served by the Old Colony YMCA’s Family Life Center, a supportive transitional housing program for families living in Brockton.

Connecticut-based Jewett City Savings Bank announced its foundation has awarded 39 grants totaling $26,320 to providers of emergency services in communities served by the bank.

Seaman’s Bank

Newburyport Five Cents Savings Bank

Massachusetts-based Newburyport Five Cents Savings Charitable Foundation donated $10,000 to the Triton Regional School District to support costs for 125 Chromebooks and two charging carts for their middle school.

Southbridge Savings Bank

Massachusetts-based Southbridge Savings Bank’s Charitable Donations Committee is pleased to announce its recent donation of $2,500 to Worcester Community Housing Resources Inc. to help local families in need of housing.

Cape Cod-based Seaman’s Bank recently donated $25,000 to the Cape Cod Children’s Place.

Webster Five

Webster Five recently donated $5,000 to Tri-Valley Inc. Funds will be used to support its money management program. BANKING NEW ENGLAND

PROTECTING VULNERABLE IN CASE YOU MISSED IT CLIENTS

Eastern Bank Doubles Down On Social Justice In Brand Launch

Exhorting its audience to “Join Us for Good,” Eastern Bank launched its latest brand campaign in March, in anticipation of its bicentennial next year. At its launch party, the bank doubled down on its commitment to small businesses, Gateway Cities and social justice. Eastern allocates 20 percent of its approximately $7 million in annual giving to a particular area of need, and this year the bank will donate an extra $1.5 million in charitable grants to organizations supporting immigrants, Chairman and CEO Robert F. Rivers said at the event. Rivers said the bank’s charitable foundation expects to hear from more than 100 nonprofits working in immigration issues across Massachusetts, New Hampshire and Rhode Island, in its targeted grant application process. Those organizations offer a gamut of support, including assistance to people seeking asylum, citizenship classes, aid for separated families, educational programs and translation services for health care, day care, legal services and tax prep. Eastern also announced a corporate partnership with Life is Good, inviting co-founder Bert Jacobs to the stage to talk about using corporate influence for positive social impact and toss co-branded t-shirts from the stage. The bank is also partnering with social media influencers like Keytar Bear, the Boston Yeti and BostonTweet and will roll out ads promoting its new tagline across television, the Internet, billboards and “a few places you might not expect,” Rivers said. More recently, he highlighted the more than 50,000 volunteer hours logged by Eastern employees last year and the bank’s charitable giving, 22 BANKING NEW ENGLAND

which has topped $100 million since 1999, and he touted the bank’s commitment to social justice causes. Eastern was the first company to sign the amicus brief challenging the Defense of Marriage Act, for instance, and had more recently become a corporate leader of transgender rights, greater percentage of women on boards and pay equity. “Ten years ago we stopped opening branches in places that didn’t need us and started opening them in places that did,” Rivers said, underscoring the bank’s commitment to Gateway Cities. He said that Eastern had locations in 10 of the state’s 24 Gateway Cities and said the bank will open its next branch in Revere this spring, to be followed by another in Roxbury this fall. Rivers also said that later this year, Eastern will further expand its commitment to minority-owned small businesses, particularly in black and Latino communities, and he praised sustainability efforts and veteran support initiatives spearheaded not by the bank’s management, but by its rank-and-file.

KeyBank Takes On Commercial Banking In Boston

KeyBank announced in March that it had reestablished a commercial banking office in Boston, aiming to grow middle-market lending in the region. The Cleveland-based bank named its new market team as well: Boston market leader Jed Hall; Ethan Powell, senior vice president, commercial banking and Matthew Quinn, vice president, commercial banking. “We view Greater Boston as a significant market for growth opportunities for Key’s commercial banking practice, particularly the opportunity to work with larger middle market businesses,” Sterling Kozlowski, KeyBank’s New England regional executive, said in a statement. Hall joined KeyBank late in 2015. He previously spent 22 years at Brown Brothers Harriman & Co. (BBH) where he worked on corporate banking, health care banking and not-for-profit groups. Powell joined KeyBank late last year. He spent 11 years at BBH in New York, starting in its corporate banking group and moving on to its commodity finance group. More recently, he worked in the structured trade and commodity finance group at DZ Bank, based in Germany. Quinn also joined KeyBank late last year. Previously, he worked with BBH in Boston in its corporate advisory and banking group with a primary focus on middle-market clients in the healthcare and food and beverage industries, as well as privately held manufacturers. BNE

Supporting projects that create jobs and boost the econom economy. Thatâ&#x20AC;&#x2122;s the way to grow.

Town of Orange, Orange

Finicky Pet Food, New Bedford Bradstreet Partners LLC, North Andover

MassDevelopment provides financing and real estate solutions to hundreds of projects across Massachusetts. Our collaborations create jobs, revitalize communities, and stimulate the economy. Visit MassDevelopment.com or call 800.445.8030 to speak to one of our economic development professionals.

@MassDev

Lake Sunapee Bank in Concord, NH

Bank Design | Architecture | Project Management 905 South Main Street, Bldg B Suite 201, Mansfield, MA 02048 • 508-339-6600 • www.nes-group.com • www.drlarchitects.com