Banking New England May/June 2015

MAY/JUNE 2015

INSIDE: IT’S TIME FOR NOT-SO-BIG BANKS TO EMBRACE BIG DATA

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LETTER FROM THE EDITOR

What It Takes Christina P. O’Neill Editor, Banking New England

O

ur cover story on the traits needed for a successful community bank CEO covers both the technological skill requirements and the intuitive skills that such a leader must have.

It’s a good compendium of both the objective and subjective qualities needed in a community bank leader and it couldn’t come at a better time.

With so much consolidation among small to midsized banks, it’s incumbent on boards to make the right choices regarding future leadership. The proper candidate to lead a community bank must be prepared to deal with issues bigger than himself or herself, while nurturing the roots of community relationships in order to keep the bank’s garden growing.

Another feature addresses how bank branch personnel should respond to customer requests to deal with legal documents. Online-generated legal documents – which likely have not been reviewed by an attorney – and the increased regulatory scrutiny of banks’ role in protecting the security and

privacy of their customers create sensitive territory.

Bank personnel are not qualified to give legal advice and shouldn’t even give the appearance of doing so.

There are the difficult issues of why the document is being presented and by whom. Banks need to protect themselves against “invalid” documents – those with no legal standing, despite appearances – but bank personnel also need to deal tactfully with customers, family members or other parties who may be in the middle of life-changing situations, such as assuming power of attorney for a relative or other loved one, who come to the bank seeking help and advice from any avenue possible – all the more if they have relied on online legal help in lieu of consulting an attorney.

Both features deal with the need to draw a line.

For bank personnel, it’s a matter of simple protocol and tact. For a community bank leader, it’s a matter of bigger-picture sensibilities, and antennae to get the sense of the sensibilities of the entire bank organization. BNE

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CONTENTS

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

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

6

10

BIG DATA

Why It’s Time to ‘Open the Core’ Data of Banking Systems to the Not-So-Big Community Bankers

COMMENTS ON EGRPRA

Proceed with Caution

14

INDUSTRY NEWS

20

16

BANK PROFILE

COMMUNITY BANK CEO

Community Dividends

Only Exceptional Candidates Need Apply

22 FEATURE

Credit Risk Rating System

26

PERSONNEL FILE

30 28

IN CASE YOUGOOD MISSED IT COMMUNITY WORKS

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

www.thewarrengroup.com ©2015 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210

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 INTERNS Rachel Benoit, Katelyn Conley and Jessica Pitocco 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 DESIGN PRODUCTION MANAGER Scott Ellison GRAPHIC DESIGNERS Amanda Martocchio, Tom Agostino and Tyler Grazio

BIG DATA

Why It’s Time to ‘Open the Core’ Data of Banking Systems to the Not-So-Big Community Bankers

BY YONI ELMALEM & HARRY HUGHES

Yoni Elmalem & Harry Hughes are with Inbox America, a global consulting firm that specializes in marketing and predictive analytics.

C

ustomer data analytics – also referred to as data mining – is a rapidly expanding field that is providing big returns to those who are exploring it. Marketing and distribution departments use it to enrich their customers’ knowledge and gain accuracy, relevancy and profitability: Customer value, lifecycle, up and cross-sell propensity, marketing campaign optimization, retention plans, etc. are the key elements to build or strengthen customer relationship.

However, the analytics market tends to be overrun by some buzzwords like “big data.” This brings confusion knowing that the biggest stake for small and mid-sized organizations remains the same: How can I transform my data – considered as an asset – in valuable customer knowledge?

Community bankers represent a segment of the banking industry that has built its existence on what experts regard as the foundation of all success: knowing the customer and building strong relationships. But based on who in the banking sector is reaping the most benefit of this innovative strategy, it seems that all too often customer analytics means 6

BANKING NEW ENGLAND

big costs. Small and mid-sized players thus see it as a tool only available to the big banks with plentiful resources. However, “community banks cannot afford to wait to set their strategies once a future standard emerges,” said a top-level executive at the management consulting firm Oliver Wyman.

Customer Knowledge Should Not Mean Big Costs

How many times do you suppose that a C-level executive of a community bank – struggling to maintain market share and grow its business – has daydreamed about actually having the analytic horsepower and resources to tap the muscle and might of various data? This could serve their obvious goals: to improve branch performance, identify developing trends that provide pivotal guidance on commercial and retail delivery strategies, keep up with customer’s needs and anticipate trends that allow proactive action before the window of opportunity has vanished.

Continued on page 8

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BIG DATA Opening the Core CONTINUED FROM PAGE 06

Inbox recently met with one of the most recognizable banks on Wall Street with worldwide offices. They employ several hundred dedicated analytic programmers in their Market Research and Strategy department. Small and mid-sized banks certainly won’t hire such a team and won’t invest in dedicated servers cluster to run cutting-edge and expensive analytical software. We just want here to emphasize the fact that we are talking about methodology and scalable technology.

Innovative banks are already taking advantage of the valuable data gathered from their core banking system in a big way because they anticipated the real stake: relevant data collection. So, where are the golden nuggets lying?

Community Banks Have the Right to Access Their Own Data

Community banks that try to capture strategic data should be confident in their right to retrieve their own proprietary data from their existing core banking providers (eg. SAB, Atlas, Delta, Orion, FISERV, FIS) and as often as they wish.

For the very few core providers who still make it difficult for banks to access their own data, Inbox suggests to write it clearly in the contract when renewing your existing core or shopping for a new system. Remember, it’s your data! It does not have to be so hard to get them in the desired format that is useful or, most importantly, actionable.

Why Not Simply Use the CRM We Purchased Five Years Ago…?

The usual answer at a lot of community banks is that “our resources were limited when we purchased our latest CRM several years ago, and it doesn’t really interact transparently with our core system.” In many cases, the older a bank’s core system, the less likely it shares data with the customer relationship management system (CRM) or has the features to do the things that have become critical to future success.

Ironically, many of the banks that do have a CRM will tell you it has become jokingly referred to as their ‘Can’t Really Measure’ system.

The actual trend is considering that relationship management should be supported by customer experience management. On the other hand, CRM is the engine of the customer interactions, not the solution, and like every engine, it requires some energy. The CRM’s gasoline is relevant information, and the higher its grade is the best performance you’ll obtain. Analytics, by helping you the best opportunities will help you to refine your solicitation process and to identify the hidden gems in your customers’ database, leveraging your CRM usage.

When Did You Want Your Reports?

Now you are ready to execute optimized solicitation campaign; it’s time to measure the performance of your relational actions. What about a dashboard exposing how you dramatically improved the sales ratio and increased your customers’ portfolio value. The information is hosted in your core system. Sadly, it’s a commonly heard reply from IT managers who hate to say no to any request that could improve profitability, “I’ll have to check with our core provider and find out how 8

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long it will take to get that data (and how much it might cost) ... when did you want that by ... 2015 or 2016?” In other words in IT dialect: “Fuggedaboutit!” Hopefully, most core banking systems provide backup features that allow bank’s IT department to extract that data. It’s simple, free and usually included in your contract.

It’s your data! It does not have to be so hard to get them in the desired format that is useful or, most importantly, actionable.

Get the Customer Insights Your Core Won’t Offer

Having a good, flexible and readily available analytical partner is a smart choice to seize the benefits of big data and predictive analytics.

Such a partner will help you gain a competitive edge by assessing the hidden potential of your bank and performing these “must-haves” services: 1. Enriching customer data with valuable insights (e.g. sales opportunities, loyalty scores), 2. Providing daily sales leads to your sales team, 3. Capturing transactional data to help focus and manage a sales team’s daily activities to prioritize smart actions to reach sales goals, 4. Aligning your marketing and sales strategies for more agility and quicker time to market.

Your Strategy to Meet Next Year’s Goals Is Available Today

You should be considering looking for an analytical partner now if you are willing to leverage your bank’s data and unlock your core banking system. Starting with a segmentation tailored for your bank’s specific customers is certainly the bedrock to support next year’s sales and marketing effort. You can also ask your partner to perform these key strategic studies that will drive profitability for 2015 and years after: 1. Cross and up-sell potential 2. Price sensitivity analysis 3. Prediction of future needs 4. Identification of preferred channels of communication 5. Customer loyalty assessment Other services include sending your sales team a daily list of sales opportunities compiled from real-time analysis of your customer and prospect database. With the buy-in commitment of your sales team, this will enable your branches to have the data-driven focus and guidance they need to improve performance each day.

Last but not least, since your analytical partner hopefully works for many banks, he can offer the kind of guidance and resources big banks have, and you can expect its pricing to be structured with an understanding of community bank’s resources. BNE

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COMMENTS ON EGRPRA

Proceed with Caution Bank Personnel Must Draw the Line on Legal-Appearing Documents

When presented with a legal document or request for action outside the bank’s approved policies and procedures, bank personnel should, as a matter of instinct and protocol, refer the situation to senior management or the bank’s legal counsel.

Untouched by Legal Hands

BY KEVIN HANDLY

Kevin Handly is a Bostonbased attorney who lectures on financial institutions M&A at Boston University Law School’s Graduate Program in Banking and Financial Law. He can be reached at khandly@ bostonbankinglaw.com.

10 BANKING NEW ENGLAND

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teenage son of a customer comes in to the branch and asks if someone can notarize his mother’s signature on a legal document. The branch notary notices that the document is already signed in the customer’s name, but includes a recital that the document was signed in front of the notary.

A person comes in to the branch and asks a teller for information about the account of a close relative who is a bank customer. He says he has the power of attorney for the absent customer and presents identification and what appears to be a formal legal document.

A person comes in to the branch and seeks to open an account in his own name and the name of the bank “as co-trustees.” He has personal identification and what appears to be a formal legal document evidencing the existence of a trust naming him and the bank as co-trustees.

A customer walks in to the branch with a large envelope containing what appear to be numerous stock and bond certificates. He asks if the bank would mind placing the certificates in its vault for a short while “for safekeeping.”

What should bank personnel do in each of these scenarios? Hopefully, the bank has written, board-approved policies and procedures and the branch personnel have been well-trained on how to respond when a customer presents and asks the bank to handle or rely upon a legal-looking document.

I say “legal-looking” advisedly. With the proliferation of online services offering legal forms for “do-it-yourself ” wills, trusts, deeds, powers of attorney, trademark registrations, prenuptial agreements, divorces, corporations, LLCs, bankruptcies, etc., there are a lot of “legal-looking” documents out there that were not actually prepared or reviewed by a lawyer skilled in that area of practice. The combination of a non-lawyer’s diligent online research, an online publisher of legal forms and review by a relative or friend who once attended law school may, but often will not, produce the intended legal status, relationship or result.

Bank branch personnel are not lawyers, or trained or employed by their bank to review legal documents, or perform other professional legal tasks, nor should they be. Yet quite often, tellers, CSRs and other branch personnel are presented legal documents in the course of performing their daily duties at the branch. How branch personnel handle these encounters can have material implications for the bank as well as for the customer or customers concerned and any other interests involved.

Resort to the use of a couple of technical legal terms may be needed here. The first of these is “caution.” The second is “common sense.”

Caution and Common Sense

The exercise of caution is particularly appropriate when a legal-looking form or document is presented by a customer at a branch office of a bank. A customer may seek advice regarding the meaning or effect of terms or wording in the document. Or a customer may ask the bank to take specific actions in reliance on the document presented. There is a risk in either case that if the bank answers the customer’s questions or takes the requested action and the document turns out to be defective, the bank, the customer or others may suffer injury or Continued on page 12

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COMMENTS ON EGRPRA Proceed with Caution CONTINUED FROM PAGE 10

damage as a result, and may seek to hold the bank responsible.

Because banks are neither legally authorized nor technically equipped to provide legal advice to their customers, it is very important for bank personnel to avoid even appearing to provide legal advice. Since banks enjoy a high level of trust from their customers and are regarded as knowledgeable and experienced in finance and business, it is natural for customers to come to them for advice in legal and business matters. When approached by a customer with questions about a legal-looking document, the banker should always remind the customer that the bank and its personnel are not permitted to provide legal advice and that the customer should consult legal counsel to get such advice, including answers to questions regarding the interpretation or effect of legal documents. This is just good old common sense.

There is an even greater need for caution when a customer or other person asks a bank to take action in reliance upon a legal looking document the customer presents. Rather than asking the bank to review and answer questions regarding the document, a customer may present a document as legally valid and ask the bank to take specific action in reliance upon it, such as opening a new account in the name of a corporation or trust, or honoring a check drawn or endorsed by the customer or another person, or providing information about or access to an account or safe deposit box belonging to another. In these situations there is, of course, a danger that if the bank honors the request and the legal-looking document later turns out to be invalid, the bank or its customer may incur significant losses or liability as a result.

Unintended Consequences

The recent case of Kelley v. Wells Fargo Bank illustrates the hazards that can attend banks’ reliance on powers of attorney and notarizations of seemingly valid legal documents. In the Kelley case, a person holding a power of attorney from a married couple residing in Massachusetts executed a mortgage on the couple’s home in favor of Wells Fargo Bank. The signature on the mortgage was required to be notarized. The 12 BANKING NEW ENGLAND

couple subsequently declared bankruptcy. The bankruptcy trustee sued Wells Fargo, seeking to set aside the mortgage on the ground that the notarization on the mortgage document was defective. The bankruptcy court found for the bank, and the trustee appealed. On appeal, the Federal appeals court reversed, concluding that the bank’s mortgage on the property was invalid because of defects in the notarization of the power of attorney holder’s signature. The form of notarization used on the mortgage document was defective, the court held, because it did not include the statutorily required affirmance that the power of attorney holder signed the mortgage as the “free act and deed” of the grantors.

In the Kelley case, Wells Fargo Bank could have protected itself from loaning (and losing) money on an invalid mortgage by having an experienced Massachusetts conveyancing attorney supervise the execution and notarization of the mortgage document.

The attorney would have known of the statutory requirement and made sure that the form of notarization of the power of attorney holder’s signature included the required “free act and deed” language.

Any customer request involving a trust should be handled only by advance appointment and only after advance review by the bank’s trust counsel of any trust agreement or other documentation involved.

The provision of fiduciary services is a highly structured, highly regulated activity, governed by complex legal requirements.

discretion on behalf of another.

On the other hand, many banks offer notary, fax, photocopying, signature verification and notary services at their branches as an accommodation to their customers and as a public convenience, often free of charge or for only a nominal fee. In addition to or in lieu of offering safe deposit box rentals, some banks offer safekeeping for customer valuables. In addition, many banks offer financial and retirement planning and first time home buyer counseling, investment brokerage, and insurance agency services to their customers, either directly or through appropriately trained and licensed subsidiaries, affiliates or third party vendors.

To protect themselves and their customers, it is good practice for banks to formalize their provisions of these ancillary products and services through the adoption of written policies and procedures specifying what products and services are provided, where, when and by whom they may be provided, and at what cost or fee to the customer. These policies and procedures will incorporate and reflect applicable regulatory restrictions and requirements. They may also take into account the terms and exclusions of the bank’s own insurance coverage. If, in the course of providing these ancillary services, a legal document (other than the bank’s own forms) is presented, it should be referred to the bank’s legal counsel for review and appropriate disposition.

Fiduciary Services vs. Convenience

Yet another form of legal documentation often encountered in the conduct of banking business is judicial (and less frequently, administrative) “process.” This includes subpoenas, search warrants, summonses and complaints, orders of impoundment and court or administrative notices and orders of various kinds. Any document of this type should be immediately flagged and referred to the bank’s legal counsel or senior management for urgent attention.

Then, there’s the different matter of customer expectations in terms of trust services. Most community banks do not have trust departments empowered to accept appointments as trustee or act in other fiduciary capacities. Those that do have boardapproved policies and procedures governing their conduct of their fiduciary activities. A bank that does not have a duly authorized and established trust department cannot engage in fiduciary activities or provide fiduciary services – for established customers or anyone else. Generally speaking, that means acting as trustee, guardian, executor, administrator, investment advisor or in any other capacity that involves the exercise of judgment or

Of Immediate Concern

This article is not intended to be and must not be relied upon as legal advice, which can only be given by an attorney duly licensed in the jurisdiction after consideration of all relevant facts and circumstances. BNE

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INDUSTRY NEWS

third quarter of 2015, subject to shareholder and regulatory approval by both companies. Camden National stated it expects the transaction to be accretive to earnings per share beginning in 2016.

Nuvo Bank & Trust to be Sold to Merchants Bancshares

MillRiver Wealth Management on April 1 officially joined Merrimack County Savings (The Merrimack) and Meredith Village Savings Bank (MVSB) as a third subsidiary of New Hampshire Mutual Bancorp. MillRiver combines the financial advisory divisions of The Merrimack and MVSB. The wealth management and investment services departments at The Merrimack and MVSB in 2013 had already joined under the leadership of Paul Provost, senior vice president and investment executive. The official formation of this new subsidiary also expands the delivery of The Merrimack’s proprietary investment management and trust services to MVSB.

Springfield, Mass.-based Nuvo Bank & Trust Co. will be sold to Merchants Bancshares Inc. of South Burlington, Vt. for $21.8 million in stock and cash. Nuvo will operate as a division of Merchants Bank. M. Dale Janes, Nuvo CEO, and Jeffrey S. Sattler, Nuvo’s president and chief loan officer, will remain with the Nuvo division. Under the terms of the agreement, shareholders of Nuvo can decide to receive either 0.2416 shares of Merchants common stock or $7.15 in cash for each share of Nuvo common stock outstanding, subject to total consideration being comprised of approximately 75 percent stock and 25 percent cash. The transaction has been approved by boards of both banks and closing is expected in fourth quarter of 2015, subject to the approval of Nuvo shareholders, regulatory approval and other closing conditions.

Merchants expects the transaction to be accretive to earnings in the first full year of combined operations.

Camden National Buys Bank of Maine

Provident Bank Launches Partial IPO

MillRiver Wealth Management Affiliates with New Hampshire Mutual Bancorp

Camden National Corp., the Portland, Mainebased parent company of Camden National Bank, and SBM Financial Inc., parent company of The Bank of Maine, announced a merger agreement under which the Bank of Maine will merge into Camden National Bank. The deal would pay SBM Financial stockholders a combination of stock and cash totaling $135 million, according to an SEC filing. Camden would become the largest bank headquartered in Maine, with 68 branches and 10.6 percent of the state’s deposits. The transaction, announced March 30, is expected to close in

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Amesbury, Mass.-based Provident Bank has filed to go public, offering up to 4.2 million shares at $10 per share, according to an SEC filing.

Expected bet proceeds of between $29.5 million and $40.4 million are anticipated to be used to redeem preferred stock and invest in securities; the bank’s employee stock ownership plan is expected to acquire up to 8 percent of the offered shares. The bank expects to create a stock-based benefit plan for key employees and directors following the offering.

Provident has more than 100 employees and focuses on commercial lending and business services. BNE

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COVER STORY COVER

COMMUNITY BANK CEO Only Exceptional Candidates Need Apply

By Carll Wilkinson While Brian Moynihan and Jaime Dimon might disagree, I contend that community bank CEOs have the hardest job in the industry. The persistently difficult interest rate environment, the pace of dynamic technological change, the unlimited competition created by online and mobile access and the frustrating, expensive and demoralizing smother of excessive regulation, all without the resources and economies of scale available to larger institutions, have created an operating environment that requires community bank CEOs to be better than ever before. Retirements are expected to accelerate over the next five years. The average age of community bank CEOs hovers at about 60 nationally, and boards will be expected to identify candidates with the right skill set, vision and temperament to compete in the new normal environment. What to look for?

On the one hand, boards must look for a candidate with an exceptional executive skill set, and this is industry-agnostic, across industry lines, whether it be banking, construction, hi-tech or consumer package goods. How do candidates think strategically, solve problems, communicate, collaborate, handle adversity, mentor, coach, build teams, delegate, make decisions and maintain a moral compass?

Do they have above average intellect? Are they passionate? Will they view success or failure as something deeply personal, or do they think they are passive players in a bigger game? Can they take ownership?

Are they loyal, to the organization, to the board and to the employees?

Diagnosis of the executive skill set looks for the best athlete; someone with strong fundamental executive talents, and this person could theoretically come from anywhere.

On the other hand, boards must seek an appropriate technical skill set, one that is industry specific, particular to commercial and

retail banking only. The technical skill set provides context, memory and a frame of reference. And while a CEO’s role is never primarily a technical position, the smaller the bank, the more technically demanding the role. Do candidates have a comprehensive grasp of the key technical elements of the business? Do they understand the evaluation of credit risk across loan types and market segments? Have they mastered the dynamics of balance sheet management and asset liability management? Do they have existing relationships with other bankers, regulators, auditors and external consultants? Do they already know the competition, understand the competitive dynamics of the industry, have an intuitive feel for the personalities in various roles and understand how the business model has changed and shifted the skill sets required for success across functions?

The executive skill set speaks to a candidate’s ability to be successful over the long term; the technical skill set speaks to how quickly a candidate will ramp up based on prior experience, and shortens the learning curve intrinsic to tackling any new role.

No leader is perfect, and boards will always be faced with this reality in approaching a selection decision. But, the right CEO candidate must present a majority of the following characteristics: True strategic thinking: Remember the hackneyed “3-6-3 rule” (deposits at 3 percent, loans at 6 percent, golf at 3 PM)? It was a strategy (and a golf schedule) before the new normal, and the fact is, the only easy money in banking was made a long time ago, when net-interest margin was relatively easy to maintain, geographic barriers to competition kept customers secure, compliance was light Continued on page 18

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COVER CEOs Wanted CONTINUED FROM PAGE 17

and technology was non-existent. As the operating environment and competitive landscape have become significantly more complex, so too have the strategic considerations involved in running a bank. The board must feel confident that a CEO candidate is ready to tackle the difficult questions around the bank’s brand strategy, sales and customer service strategy, branching/e-banking/delivery channel strategy, product/pricing strategy and interest/non-interest income strategy. The same old same old won’t cut it anymore.

The right CEO candidate will be able to live the values of his or her organization in everything they do; there is no room for ironic remove.

Grit: Leadership is hard, success is uncertain, setbacks are inevitable and a real CEO had better be ready to muster the intestinal fortitude to handle adversity and keep pushing forward. Everyone looks good as a winner; it is the true leaders (with true grit) who lose the battle, but keep their cool, preserve their vision and continue to endeavor forward. The board needs to know that the right CEO candidate is tough and determined.

Communication: Simply put, it is the CEO’s ongoing and constant role to communicate and continually reinforce the strategy and values of the organization. This is not a suggestion that oversharing, whining or confiding inappropriately with subordinates is a strategy. It is all about the conscious understanding that when it comes to articulating vision and values, there is really no such thing as over-communication. Importantly, neither being intrinsically introverted or extroverted suggests effective or ineffective communication by itself, so long as the candidate is aware of his or her own inclinations. Bottom line, the board needs to know that the right CEO candidates appreciate their role as communicator in chief.

Passion for winning: Vince Lombardi famously said that “Winning is a habit. Unfortunately, so is losing.” Great CEOs correctly see success and failure as deeply personal. They are passionate about winning, and their passion and conviction propel the organization forward. The board will be sorely disappointed with a CEO candidate who doesn’t need to win.

EQ (emotional IQ): Being the smartest person in the room is truly not enough; the best CEOs have a strong and intuitive sense of people. These CEOs hire well, because they have developed a philosophy around how they evaluate people, and they have a strong natural sense of what makes people tick. They manage well, because they are in tune with what motivates and demotivates their employees, and because they don’t let their own ego get out of control. The board should look for the right CEO candidate to easily articulate their hiring philosophy, and provide real insight into their current or recent direct reports, which highlights a critical sensitivity to people.

18 BANKING NEW ENGLAND

Real management: The best CEOs coach, mentor and delegate effectively, and in doing so create a cult of loyalty throughout the organization. Direct reports are given real authority to execute the CEO’s vision, and managed to deliverables, not microscopic details.

Micromanagement bottlenecks decision making and execution, slows down positive change and forward progress and is guaranteed to disenfranchise top talent. Transitioning from a tactical executor to a strategic director and manager is a critical leap, and the board will want to be certain that the right CEO candidate is temperamentally capable of making the jump.

Cultural stewardship: The right CEO candidate will be able to live the values of his or her organization in everything they do; there is no room for ironic remove. They must truly believe in the mission of the bank. They will have a healthy and mature moral compass, and an appropriate ego. And they will be loyal to the organization, to the board and to the employees. The board will want to speak to a variety of references that are in a position to comment on the CEO candidate’s values.

Balance sheet/asset liability management: Two CEOs running the same bank in the same market could have very different performance at the end of the year, and it comes down to truly understanding the levers that adjust the performance of the balance sheet, and being conscious and disciplined, most importantly in matters concerning deposit and loan pricing and overall operating expense management. Every bank uses some variation on the same ALM modeling software, and there is no magic in the technology.

And, this is not a suggestion that a CEO needs to act like the CFO. But, a board needs to know that the right CEO candidate grasps the fundamentals of structuring a properly performing balance sheet.

Credit risk management: The evaluation of credit risk is equal parts art and science, and is a skill that develops and improves over time. There is simply no more effective way to ruin a perfectly good bank than by making poor credit decisions, and the smaller the bank, the less margin there is for error. First things first, the CEO needs to be able to set the right overall credit strategy for loan sizes and credit types, in order to avoid being the unwitting lender of last resort on a deal that every other bank in town has already passed on.

The board will want to feel confident that the right CEO candidate has a strong fundamental background in lending and credit risk, ideally through direct lending experience and with a history of some credit approval authority. At a minimum, the right candidate will have sat on a credit committee, and have been part of the credit conversation with prior banks.

The new normal operating environment is creating challenges for community banks across the country. But under the right board oversight and executive leadership, community banks have a wonderful opportunity to drive market share and brand loyalty. As boards contemplate CEO retirements and succession plans, a focus on the right mix of executive and technical skills will ensure a bright future for the bank under the next generation of leadership. BNE Carll Wilkinson is the managing partner at Smith & Wilkinson, which has grown into one of the largest banking industry executive search firms in the country.

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COVER STORY BANK PROFILE

Community Dividends Northfield Savings Bank

BY LINDA GOODSPEED

The bank’s logo, turned into a spotlight during the bank’s biggest annual sponsorship, Burlington Discover Jazz Festival.

A

President and CEO Thomas Leavitt

20 BANKING NEW ENGLAND

t Northfield Savings Bank (NSB), “110 percent banking” is more than just a motto. It is, quite literally, how the bank does business.

NSB, headquartered along the Connecticut River in Northfield, Vt. gives away at least 10 percent of its net income every year to local nonprofit organizations, a large social commitment for a private company.

“We’re a mutual bank,” explained Thomas S. Leavitt, president and CEO. “Unlike stock held banks that turn back their earnings to stockholders in the form of a dividend, we provide a community dividend.”

In the last five years alone, that community dividend has exceeded $2.5 million.

Northfield’s community dividend is made possible as one of the state’s oldest and most successful banking institutions. Founded in 1867, NSB is the second-largest bank headquartered in Vermont with total assets of $800 million and 13 branches. The bank’s investment services arm, Northfield Investment Services, has $143 million under management.

For a small state (population: 630,000), Vermont is well-banked with a number of large regional banks, several large community banks, including Northfield, several more smaller community-based banks and a scattering of credit unions. Although best known for skiing and tourism, Vermont has a surprisingly diversified economy, particularly along Northfield’s footprint. The bank has eight branches in and around Montpelier, the state’s capital, and five in Chittenden County, the state’s most populous county and home to the state university, largest hospital and growing high tech and financial services sectors. “[In] each of our offices, markets can stand alone,” Leavitt said.

A Disciplined Credit Culture

Leavitt says Northfield’s niche is Vermont, and only a small part of that small state.

“We don’t cover the entire state. We’re looking at maybe a third of the total as our footprint. That

represents a very defined opportunity. We have to do the best job we can to carve out our fair share of growth. We’re really looking to invest for the long haul and not worry about business cycles. We believe in Vermont and the community. We’ll rise as they rise.

Larger banks run out of opportunities, and look elsewhere. That’s not the case with us.

We’re committed to Vermont.”

Leavitt, a Vermont native himself, was named to Northfield’s top post in October 2014, replacing Thomas N. Pelletier, who led the bank for 16 years. Prior to NSB, Leavitt served as president and CEO of similarsized MountainOne Bank in North Adams, Mass., and before that spent several years as executive vice president of Merchants Bank in Burlington, Vt. Northfield’s loan portfolio of $560 million is about evenly split between residential and commercial loans.

“We do originate some mortgage loans for the secondary mortgage market, but we bring the lion’s share into our portfolio,” Leavitt said. “We keep all our commercial loans, which tend to be backed by commercial real estate. We’re also growing in our effectiveness to attract commercial and industrial lending.”

He said the bank’s asset quality is better than the state’s average, and Vermont’s average is among the best in the country.

“It’s the result of a disciplined credit culture,” Leavitt said. “We have the ability to get close to all of our borrowers and understand their needs. It allows us to underwrite and preserve capital that results in very few losses.”

Seeking a Bigger Community Impact

He said the bank’s loan limit of about $10 million is able to meet the needs of about 95 percent of its market. Among its 150 employees, Northfield has nine commercial lenders, four in central Vermont and five in Chittenden County, where Leavitt said the growth potential is about double that in central Vermont and will be the site of any

future bank expansion, which he predicts will happen over the next two years.

Since its inception, Northfield has taken its civic responsibility seriously. During the Great Depression of the 1930s, the bank accepted cows and horses from customers as payment and has always supported local nonprofits and charities.

“In 2002, under the leadership of Tom Pelletier, the board elected to implement an official policy that the bank would donate 10 percent of net income per year and no less than $300,000 should income dip,” said Jill Bird, marketing manager.

In 2006, the bank deepened that commitment with the NSB Foundation, which, as part of the 10 percent commitment, selects a nonprofit to receive a three-year, $450,000 grant.

“It’s a way to have a bigger impact in one area,” Bird said.

Tom Longstreth, executive director of the current recipient, Resource Management, a nonprofit based in Burlington, Vt., said such a multi-year commitment in the nonprofit world is unusual. Resource Management accepts used household goods and building supplies, then refurbishes and uses them to build affordable housing and train unemployed youth and adults. He said the three-year NSB grant has helped Resource Management build capacity, establish a new site and more than double the number of its trainees.

“It’s been huge,” Longstreth said.

“We’re so appreciative to be one of the bank’s partners.” BNE

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21

FEATURE

Credit Risk Rating System A Dynamic Management Tool

BY JOSEPH J. HILL

Joseph J. Hill is founder and chairman/president and CEO of CEIS Review Inc. He can be reached at jjhill@ceisreview. com or (212) 967-7380.

Joseph Hill

22 BANKING NEW ENGLAND

W

hat is a credit risk rating system?

A credit risk rating system provides the means by which a financial institution can grade each transaction in the commercial loan portfolio by the level of risk it contains. While this paper primarily focuses on credit risk arising out of loan transactions, banks may also incur contingent and direct credit risk by issuing L/Cs, and by entering into derivative and/or foreign exchange transactions, and cash management services. Such risks should not be overlooked when implementing a credit risk rating system.

What are the regulatory requirements?

For banks not in the “large bank” category, regulators do not impose specific requirements for rating commercial credit transactions. The regulators do require that banks assign categories of special mention, substandard, doubtful and loss to transactions where appropriate (see sidebar). It is the universal practice of banks to incorporate these categories and definitions into a credit risk rating system. In doing so, banks usually also incorporate the regulatory definitions for these categories. There is no obligation to use those definitions but if a bank opts to use different criteria, then it must indicate what the regulatory equivalent is to each of these criticized grades.

Why do we need a credit risk rating system?

The bank’s credit policy, as approved by the board of directors, provides direction as to the bank’s appetite for credit risk. The bank needs management tools that will permit it to ensure that it is in compliance with bank policy. The credit risk rating system provides a means of both documenting the bank’s policy and measuring and monitoring compliance with that policy on an ongoing basis.

Most banks also use the data held in the credit risk rating system as a core input for calculating the loan loss reserves.

There is no standard risk rating model. Each bank should use a system designed to meet its needs. It is in recognition of this that the regulators are not more specific in their requirements. The most important consideration is the level of detail which is outlined in the model. The model should have a sufficient number of grades to provide useful information while not being so detailed that it becomes administratively burdensome. The number of grade levels will primarily depend on the breadth of the spectrum of

risk embedded in the portfolio, and where within that range it lies both in dollar terms and in terms of number of transactions and/or clients.

Many banks adopt a 9-grade scale. The top two grades are usually reserved for cash collateralized transactions and claims on the Federal Government, and transactions secured by marketable financial instruments, Federally guaranteed portions of SBA loans, and loans to investment grade entities etc, respectively. Grades 3-5 will usually house the bulk of the bank’s portfolio, split into low, medium and high risk transactions. Finally, in grades 6-9 the bank will incorporate the 4 criticized categories as defined by the regulators.

A bank may employ a Watch List regime as the means of enhanced monitoring of transactions. The Watch category is sometimes included as a separate grade in the system. Some banks append a “W” or other modifier to an existing grade. As a further refinement a bank may split the rating on loans where part is secured or guaranteed and part is not, for example, where loans are partially cash collateralized or partially guaranteed (as in SBA loans). Some banks distinguish between the borrower risk and transaction risk by rating them separately. In assigning credit ratings, banks should take into account business groups, affiliates and guarantors. Especially where two borrowers depend on the same source of cash flow for debt service, it makes sense for those borrowers to share the same rating unless there are cogent reasons for rating them differently.

Loan grades should be clearly spelled out in the bank’s manuals. Where possible, specific objective criteria, such as ratios, collateral, etcetera should be incorporated. Banks may usually adopt separate definitions for different types of businesses at each grade. Some banks use a matrix approach, where the different risk criteria (DSCR, LTV, quality of management, etc.) are separately scored. The rating is obtained as an average of those scores, weighted according to the importance the bank assigns to each of the criteria. Such banks adopt several matrices to cover different kinds of loan product. These systems help bring consistency to the rating system’s application. It is, however, recommended that banks make it possible to override such systems should the need arise, since no system can cater to all possible combinations of circumstances.

Uses of the Credit Risk Rating System

The system’s primary use is to measure and manage the risk contained in individual credit transactions. When all transactions have been rated, the bank can then consolidate the ratings and obtain a risk profile of the portfolio as a whole. Updating the profile periodically, the bank can analyze change in each risk category over time, and, through this migration analysis, identify the trend in risk in different parts of the portfolio. Using the system together with loan types, industry, geographical data and other information, management may be able to isolate trends affecting more specific areas of the portfolio.

While trends may reflect changes in the economic environment, they can also vary with changes in bank lending strategy. Changes can also occur for less obvious reasons, such as the not necessarily intentional tendency towards higher risk when lenders chase yield in an overly liquid market. Analysis of changes in the portfolio risk profile helps management to

identify and understand these trends. Rating systems can also be used in a proactive fashion to project the effect on the bank’s portfolio risk profile of purchasing a portfolio of loans or incorporating a large new lending relationship.

System data has other uses outside portfolio risk management. Banks use credit risk rating system data to calculate reserves.

While a detailed discussion of FAS5 is outside the scope of this paper, it will be evident that the bank’s ability to segment its portfolio according to risk plays an important part in making reserve calculations. The bank can also use the rating system as an input in the process of pricing transactions. The bank can calculate the weighted average pricing for each grade, and can then use that as a reference point for pricing future transactions that fall into that risk grade. Such analysis can, of course, incorporate other portfolio data (loan types etc). The bank can thus make sure that pricing is consistent and that the bank is receiving an adequate return on the risk being incurred.

Yet more uses can be found for the system

and its data, depending on the needs of the bank concerned, such as helping to determine at what level in the bank transactions may be approved, and determining loan conditions, such as amount, repayment terms, frequency and quality of required financial information, frequency of review and covenant requirements.

Procedures

While each bank has its own process for assigning credit ratings, it is common for ratings to be assigned before or during the decision making process as to whether to lend. If the bank does otherwise, much of the utility of the system will be lost. In some banks, the credit department rates the loans to ensure independence of the processes. While the purpose is a valid one, it lessens the sense of ownership that the account executive has for the loan and relationship. It is perhaps preferable to have both credit department and Continued on page 24

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FEATURE Credit Risk Rating System CONTINUED FROM PAGE 23

account executive assign ratings to the loan, with the final decision on the rating being left to the approving authority.

For the system to retain its value as a management tool, credit ratings must be reassessed from time to time and, where necessary, updated. Most banks reassess ratings at least once a year. The process will normally include a re-examination of all of the criteria the bank used in the original assignment of the ratings. Some banks subject those transactions with higher risk volatility to more frequent reassessment. Normally, an upgrade in rating will require an approval at a level at least equal to that at which the rating was originally assigned. Decisions to downgrade transactions within the Pass segment of the portfolio are sometimes permitted at a lower level of seniority. On occasion it may be appropriate to make a change to a rating at a time other than when the periodic reassessment is due. In such cases it is recommended that care be taken to document on the credit file both the decision and the reasons for taking it.

Loan Review

It is essential that ratings under the credit risk rating system be assigned consistently and

in a timely fashion. To the extent that they are not, the utility of the system can be greatly diminished. A primary purpose of loan review is to ensure that the bank is properly measuring, managing and reporting the risk embedded in the loan portfolio. An objective of the loan review function is to validate the ratings assigned. Loan review must determine whether transactions are being rated in accordance with bank policy and procedures.

The party performing the loan review must enjoy a high level of credibility based on technical know-how and experience. While it is beyond the scope of this paper to present the arguments in favor of independent loan review, the advantages of engaging, experienced and skilled personnel will be self evident: it means access to a team fully versed in best practices and with knowledge of the expectations of regulators based on observation at a large number of small and mid-sized financial institutions.

Some Pitfalls

If a credit risk rating system is properly designed and implemented, the bank will reach a point where considerable reliance is placed on the system in making credit, portfolio

ADDITIONAL RESOURCES Commercial Bank Examination Manual

Federal Reserve Commercial Bank Examination Manual Available at www.federalreserve.gov/boarddocs/supmanual/ cbem/cbem.pdf

Division of Banking Supervision and Regulation

COCC “Rating Credit Risk” is a separate OCC Controller’s Handbook section. The latest version was issued in April 2001 and is available at www.occ.gov/publications/ publications-by-type/comptrollers-handbook/rcr.pdf.

24 BANKING NEW ENGLAND

management and related business decisions.

There is a natural tendency among lenders to lean to the upside in assigning ratings, while the credit department may lean in the other direction. Both tendencies should be strongly resisted, since they can distort the basic data on which the bank depends in making such decisions. On the one hand, it may lead to insufficient return for the risk. On the other, an overly conservative rating may lead to the bank losing business by pricing itself out of the market. Grading inaccuracies may also occur where provisional grades are assigned, as in the case of newly acquired loan portfolios. Assigning a provisional grade may be unavoidable. In such cases it is strongly recommended that the bank prioritize rating transactions in accordance with the bank’s system in order to restore the system’s integrity.

If a bank’s system has an appropriate number of grade levels, the problem can arise where, in practice, 70 to 80 percent of the bank’s business gets assigned to a single grade. This kind of concentration reduces the usefulness of the system since analysis of migration no longer yields usable information. Assuming there is some level of diversification in the portfolio, when this happens, it is time to review and adjust the grade definitions. Merely having the requisite number of grades at the bank’s disposal is not sufficient if the grading system does not give rise to some segmentation of the portfolio.

Conclusion

Today’s regulator is concerned about banks’ ability to manage the risks that are inherent in the banking business. Credit risk is one of those risks. The most widely used tool to manage it is the credit risk rating system.

While regulators leave banks considerable latitude to determine their own type of credit risk management system, the bank that does not make effective use of one (for example, a bank which employs a single pass grade) will find it difficult to persuade its regulator as to the adequacy of its analysis. On the positive side, adoption of an effective credit risk rating system opens up significant opportunities to improve credit, portfolio management, and related decision-making with consequent improvements in safety, soundness, and profitability. BNE

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COVER STORY 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 Cassidy Murphy at cmurphy@thewarrengroup.com

Featured Banks • Bank of New Hampshire • BankNewport • Beverly Bank

Appointments and Elections

Deborah Perlingiero

BankNewport

Country Bank

BankNewport has appointed Deborah M. Perlingiero as vice president and branch manager of its Narragansett office.

Country Bank has appointed new trustees, corporators and officers. New members Mohammed S. Ahmed MD, Sheila Cuddy, Brian D’Andrea, Robert Dik, Mary Falardeau, Janice Kucewicz, Lauren Miller, Timothy Murray, James Paugh III and Richard Poissant were voted in unanimously.

BankNewport, OceanPoint Insurance Agency, Inc. OceanPoint Financial Partners, the mutual holding company of BankNewport Peter Capodilupo and OceanPoint Insurance Agency Inc., has appointed Peter Capodilupo to succeed J. Timothy O’Reilly as chairman of the board of trustees.

Dedham Institution for Savings

Anna Conte

Anna Conte was elected assistant vice president and branch manager of the East Dedham office.

Florence Bank Florence Bank has appointed Henry Downey as vice president of commercial lending.

• Country Bank • Dedham Institution for Savings Henry Downey

• Florence Bank

Savers Bank

• Kennebunk Savings Savers Bank has appointed Jeremy Leap as vice president of commercial lending.

• New Hampshire Mutual Bancorp • Rollstone Bank & Trust • Savers Bank

Country Bank appointed new trustees, corporators and officers.

Jeremy Leap

Promotions

• Sugar River Bank

Bank of New Hampshire

Laconia, N.H.-based Bank of New Hampshire has promoted Vickie Routhier to marketing officer and senior vice president of chief retail banking.

branch administration. Katherine Gilfeather has been promoted to assistant vice president and mortgage lending officer.

CORRECTION: Rollstone Bank & Trust

Vickie Routhier

Beverly Bank

Gayle Fili

26 BANKING NEW ENGLAND

Katherine Gilfeather

Beverly Bank has promoted Gayle Fili to senior vice president of

Robert Courtemanche

In the previous issue the announcement of Robert Courtemanche’s promotion at Rollstone Bank & Trust ran with the wrong photo.

Here is the announcement and the correct photo. We

regret the error.

Robert Courtemanche has been promoted to branch manager at Rollstone Bank & Trust.

New Arrivals New Hampshire Mutual Bancorp

Gloria Brisson

Mark Chalifour

Gloria Brisson has joined Merrimack County Savings Bank and Meredith Village Savings Bank (MVSB), subsidiaries of New Hampshire Kimberly Carter Mutual Bancorp (NHMB), as a member of the banks’ loan servicing teams. Kimberly Carter has joined NHMB as vice president of loan servicing for both The Merrimack and MVSB. Mark Chalifour has joined NHMB as vice president of residential and mortgage sales for both The Merrimack and MVSB.

Kennebunk Savings

Maine-based Kennebunk Savings has hired Kelly Goodwin as a retail lending officer.

Kelly Goodwin

Sugar River Bank Colette Garside-Conway has joined Sugar River Bank as branch manager at its new branch in Concord, N.H. BNE

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COMMUNITY GOOD WORKS

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 Cassidy Murphy at cmurphy@thewarrengroup.com

Androscoggin Bank Androscoggin Bank’s MainStreet Foundation approved a total of $12,880 in quarterly impact grants for the first quarter of 2015 to the following organizations: ArtVan ($2,000), Kids First Center ($2,000), hear ME now ($1,880), The Opportunity Alliance ($5,000) and Youth Entrepreneurship Adventures ($2,000).

Bay State Savings Bank

Bridgewater Savings Bank

Featured Banks • Androscoggin Bank • Bay State Savings Bank • Bridgewater Savings Bank

The Bridgewater Savings Charitable Foundation donated $3,719 to the East Bridgewater Music Parents Association, which conducts several fundraisers to help raise money for the East Bridgewater School District Music Program.

• Bristol County Savings Bank • Eastern Bank • Franklin Savings Bank • Meredith Village Savings Bank • MutualOne Bank • Needham Bank • North Middlesex Savings Bank • Washington Trust • Webster Five Bank

Bay State Savings Bank contributed $4,000 to Edward Street Child Services through its “Champions for Children” initiative.

Pictured, from left: Thomas Belton, vice president of Internet technology, Bay State Savings Bank and chair of Edward Street Child Services board of directors; Eve Gilmore, director of Partnership Development, Edward Street Child Services; Dianne Bruce, executive director, Edward Street Child Services; Kim Davenport, managing director, Birth to 3rd Grade Alignment, Edward Street Child Services; and Peter Alden, president and CEO, Bay State Savings Bank.

Eastern Bank

Bristol County Savings Bank

The Patriots’ Super Bowl hero Malcolm Butler was a surprise guest at Eastern Bank’s annual Community Quarterback event, held April 1 at corporate headquarters. A total of $850,000 in grants was celebrated. Pictured, from left: Doug Flutie; Jonathan Scott, president and CEO of Victory Programs; Malcolm Butler; and Eastern Bank Chairman and CEO Richard Holbrook.

Franklin Savings Bank Patrick Murray (left), president and CEO of Bristol County Savings Bank (BCSB), president of Bristol County Savings Charitable Foundation and board member of the BCC Foundation, and Don Smyth (right), vice president of the BCSB and board president of the Bristol Community College Foundation, present a $250,000 check to Dr. John J. Sbrega (middle), president of Bristol Community College and the project’s namesake.

28 BANKING NEW ENGLAND

Franklin Savings Bank awarded $20,000 in grants to six community organizations through the FSB Fund for community advancement including: GOT Lunch! Laconia ($5,000), Tiny Twisters Child Care Center ($2,500), Circle Program ($2,500), Newfound Area Visiting Nurses Association ($5,000), Franklin Business and Industrial Development Corp. ($2,500) and the Boys & Girls Clubs of Greater Concord ($2,500).

Meredith Village Savings Bank

Meredith Village Savings Bank selected Lakes Region Humane Society of Ossipee (LRHS) as one of 21 local nonprofits to receive a grant from the New Hampshire Charitable Foundation this year. Meredith Village Savings Bank Regional Vice President Robyn Masteller (left) presents a $8,350 check to Megan Fichter, executive director for LRHS (right) with recently adopted dog, Alita

MutualOne Bank

MutualOne Charitable Foundation has awarded a $6,039 to help provide the informational materials required for a new Municipal Services Citizens Academy, sponsored by the Framingham Police Department. Framingham Police Chief Ken Ferguson and Mark Haranas, MutualOne Foundation trustee and MutualOne Bank president and CEO, celebrate the foundation’s donation to the department’s Municipal Services Citizens Academy.

MutualOne Bank

MutualOne Charitable Foundation’s $2,500 award to Hoops and Homework Inc. will help 55 Framingham kids receive after-school help. Pictured, from left to right: Rachel Stewart, Foundation administrative director; Herb Chasan, president of Hoops and Homework Inc.; and Yasmine Ouweijan, MutualOne Bank Concord Street, Framingham branch manager.

Needham Bank

Needham Bank recognized the Westwood High School Boys Hockey Team’s win of the Division 2 State Championship title for the 2014-2015 season, at a gathering in early April. Needham Bank recognized the teams and presented them with jackets to commemorate their achievement.

North Middlesex Savings Bank

North Middlesex Savings Bank recently awarded the Ayer Shirley Education Foundation (ASEF) $3,000.

Pictured, from left: Randy Clemence, vice president of ASEF; Paul Bresnahan, chairman, North Middlesex Savings Bank; Kevin Bresnahan, ASEF and race director; Wally Dwyer, president and CEO, North Middlesex Savings Bank; and Maureen Kilcommins, president, ASEF.

Webster Five Bank

The Webster Five Foundation donated $3,000 to Shrewsbury Youth and Family Services Inc. to support a needs assessment, counseling services, case management and service linkages for program group participants.

Pictured, from left: Sam Bitar, executive director of the Webster Five Foundation and business analyst, Webster Five; Cheryl Pedjoe, Shrewsbury branch manager, Webster Five; Terry Cassidy, executive director, Shrewsbury Youth & Family Services; and Richard Leahy, CEO and president, Webster Five.

Washington Trust

Westerly, R.I.-based Washington Trust donated $50,000 to benefit the Campaign for Cancer Care at South County Hospital. The initiative aims to raise $6.5 million in support of South County Hospital’s planned Community Cancer Center, which will encompass a new chemotherapy infusion center with adjacent offices for physicians and other care team members.

Webster Five Bank

The Webster Five Foundation donated $1,500 to New Hope Inc. to support the state-certified psychoeducational program for perpetrators of domestic and sexual violence. Pictured, from left: Marcia Szymanski, executive director, New Hope Inc.; Sam Bitar, executive director of the Webster Five Foundation and business analyst, Webster Five; Laurie Krause, site director for the Visitation and RESPECT program, New Hope Inc; Richard Leahy, CEO and president, Webster Five; and Daniel Donahue, Massachusetts state representative, 16th District in Worcester.

BANKING NEW ENGLAND

29

IN CASE YOU MISSED IT

Bridgewater Savings Opens Lending Center

Featured Banks • Bank of New Hampshire • Bridgewater Savings • Middlesex Savings

Bank of New Hampshire Supports Building Buy

GC Engineering purchased 633-637 Main St. in Downtown Laconia with support and financing from Bank of New Hampshire and Belknap Economic Development Council (Belknap EDC). Established in 1978, GC Engineering is a Belmont-based civil engineering firm specializing in all aspects of flood plain management, flood zone determinations, flood insurance and consulting for the National Flood Insurance program (NFIP). GC Engineering, led by Mark and Chris Condodemetraky, plans to expand their operations in the building including interior renovations and retrofitting space for their new headquarters.

Bridgewater, Mass.-based Bridgewater Savings Bank has opened a new loan center in Wrentham, Mass.. The loan center will service homebuyers in the surrounding communities of Franklin, Wrentham, Foxboro and Mansfield and is managed by Vice President and Area Sales Manager Mary Buck.

Middlesex Savings Finances NE Ice Cream Corp.

Natick, Mass.-based Middlesex Savings Bank has provided $12 million in financing to New England Ice Cream Corp. to fund its acquisition of Attleboro-based Bliss Bros. Dairy Inc. and support the company’s long-term growth plan.

The acquisition will expand the company’s distribution network throughout New England.

The financing package also included a 1031 TaxFree Real Estate Exchange, the bank said. BNE

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