Massachusetts Banker 4Q 2012

Pension Plans | Dossier: Crowe Flies High | Students Receive Scholarships Fourth Quarter 2012

THE MAGAZINE

O F T H E M A S S A C H U S E T T S B A N K E R S A S S O C I AT I O N

Coping Burdens of Dodd-Frank with the

of Dodd-Frank

FEATURES

Students Receive Scholarships from the MBA . . . . . . . . 13 Pension Plans: the Reward and Challenge . . . . . . . . . . . 14 COVER STORY

Coping with the Burdens of Dodd-Frank . . . . . . . . . . . . . . . . . . . . 16 13

13 COLUMNS

Chairman’s Column . . . . . . . . . . . . . . . . . . . . . . . 4 Legislative Review . . . . . . . . . . . . . . . . . . . . . . . 10

DEPARTMENTS

14 CORRECTION In the previous issue of Massachusetts Banker, four members of the 2012 graduating class of the New England School for Financial Studies were misidentified. We regret the error and once again say “congrats.”

Dossier: Crowe Flies High . . . . . . . . . . . . . 6 On the Move . . . . . . . . . . . . . . . . . . . . . 20 Good Neighbors . . . . . . . . . . . . . . . . . . . 26 MBA Calendar of Events . . . . . . . . . . . . . . 30

HERE ARE THOSE GRADUATES WITH THEIR CORRECT AFFILIATIONS: Jennifer Boyle, United Bank Kyle Hill, Southbridge Savings Bank Daniel J. Pulit, Cape Cod Five Cents Savings Bank Sheila M. Veideman, Southbridge Savings Bank

OFFICERS Chairman: Dorothy A. Savarese, President

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Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

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CHAIRMAN’S COLUMN

by Dorothy A. Savarese

Basel, Mortgages, and the Cost of Doing Business

T

he formal comment period for proposed Basel III capital requirements is now behind us, but that doesn’t mean we all should remain silent on the issue. In fact, our comments have had an impact – the regulators have stated that the regulations will not take effect Jan. 1 as previously planned.

This past June the Federal Reserve, FDIC and OCC issued joint proposed rules to implement the Basel III regulatory capital reforms. The proposals would increase the minimum levels of required capital, narrow the definition of capital, and increase the risk-weights for various asset classes.

If the rules stand as currently written they could greatly reduce our member banks’ ability to compete.

Even if you submitted a formal comment, you cannot rest; it is still important for us to keep the dialogue going with our regulators, elected officials, and even consumers. On the heels of Dodd-Frank, this is yet another issue that has the potential to have a trickle-down negative impact on bank customers, particularly in the area of loan availability and firsttime homebuyer programs.

As I talk to other bankers in New England, I hear concern that the change in definition of capital, and the increase in the risk weights of many asset classes, will squeeze banks at time when broader regulatory burdens are growing. The potential unintended consequence, of course, is that many banks will simply stop making loans in certain

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lending areas, a clear problem for consumers, our banking industry, and the communities we serve.

A big part of the problem is the complexity of the proposals and the extreme costs every bank will have to bear. This is a tough pill to swallow for most of us here in New England who maintained healthy balance sheets throughout the financial crisis, especially since these rules do not apply to our competitors such as mortgage companies and credit unions.

Why are rules designed to mitigate systemic risk and applied to the world’s largest Wall Street firms also applicable to far-smaller banks?

It’s as if the agencies are ignoring the important role that community banks play in the U.S. financial system. Where does it stop? When we have just a handful of big banks left in our nation? Surely, that’s not the best for consumers.

Certainly, here in Massachusetts, with 70 percent of our banks governed in mutual form, the problem of raising additional capital is exacerbated. The increased capital requirements for U.S. Treasuries and other securities that banks hold in their investment portfolios could impact how small banks manage liquidity and interest rate risk. As a result, we community bankers may have to change our business plans.

The Massachusetts Bankers Association has been vociferous in its opposition to the proposed rules, but we also recommend that members take the prudent course and begin to think about compliance under possible new requirements. In the mortgage business, a focus on mortgage servicing vs. retention may be a wise decision. We will all be challenged to

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

find cost effective methods of operating while still maintaining a strong focus on personal service. That’s not all bad; we know how to do that much better than other non-bank players in the mortgage space.

The reality is that we may need to change our methodology internally or align with strategic partners to get the job done. The cover story in this issue of Massachusetts Banker is illustrative of this very point. As compliance, technology, and delivery systems become more complex, effective partners and strong relationships will likely become more important. Unfortunately, they will also become more expensive.

The cost of doing business seems never to decrease and we have come to understand that the fallout of the financial crisis is going to be costly for us as an industry, But what we are facing is potentially one of the most drastic increases in costs we have ever known.

That’s why it is still very important that we all continue to engage individually with our regulators and lawmakers and insist, over and over again until we succeed, that the regulatory agencies, rule makers and elected officials do what they can to improve the business climate for America’s community banks.

Our industry is too important, to 62,000 employees in Massachusetts alone, the communities we support, and millions of consumers nationwide, not to get it right. n Dorothy A. Savarese is chairman of the MBA and president and CEO of The Cape Cod Five Cents Savings. She can be reached at dsavarese@capecodfive.com or (508) 247-2104.

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Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

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DOSSIER

Crowe Flies High

by Jay Fitzgerald

Company:

MountainOne Financial Partners

Headquarters:

North Adams

(Retiring) Chairman:

Stephen G. Crowe

Mutual Charter:

Hoosac Bank, South Coastal Bank

Assets:

$826 million

Branches:

6

ATMs:

15

Founded:

1848 (Hoosac Bank); 2002 MountainOne Financial

Stephen G. Crowe

S

tephen G. Crowe is still a little amazed, a decade after the creation of MountainOne Financial Partners, at how hard and long it took to initially combine two small mutual banks under one holding company – and how successfully it all turned out in the end.

“No doubt, it’s one of my proudest career achievements,” said Crowe, who was in the thick of negotiations in the late 1990s and early last decade between Hoosac Bank and Williamstown Savings Bank to form MountainOne Financial. “It wasn’t easy, but it was worth it.”

At the end of this year, Crowe, 62, will officially retire as chairman of MountainOne, staying on afterward as a director. He’s already passed the chief-executive baton to his successor, Thomas S. Leavitt, who’s been overseeing the day-to-day operations at MountainOne since September.

After giving up the chairmanship, Crowe will leave behind a

6

unique legacy of ultimately bringing together three mutual banks – Hoosac Bank, Williamstown Savings and the recently added South Coastal Bank of Rockland, each maintaining their own separate brand identities – that are better positioned to thrive and grow together in an increasingly competitive banking environment.

MountainOne’s holdings also include property-and-casualty insurance units and an investment advisory division.

The MountainOne business model may or may not be the right one for other small banks in Massachusetts, particularly mutual banks, Crowe freely admits. But it does point the way to how community banks can adapt and think differently if they’re going to survive and maintain their community roots.

“It was a strategic decision by us,” said Crowe of combining the resources of mutual banks to streamline operations and reduce costs, while at the same time keep-

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

ing separate brands to better focus on serving individual communities. “It’s been working out great.”

For Crowe, the long career road that ultimately led to MountainOne Financial started at Boston’s Wolf & Co., where he worked as an auditor after he graduated from Northeastern University in 1973 with a degree in accounting.

“Wolf & Company had – and still does to this day – a heavy concentration of community banks as clients,” said Crowe, a native of Topsfield. “Much of my time there was spent auditing the books of community banks. So it’s quite natural how I got into banking. It was essentially the same industry to me. I went from auditor of banks to working in banks.”

After Wolf & Co., Crowe headed up to Maine to serve as controller of Casco Bank and later returned to Massachusetts to serve as chief financial officer at Depositors Trust Co. in Lexington.

In 1994, he became president of Williamstown Savings Bank in

Williamstown. At the time, Crowe said, Williamstown Savings was very small, with about $65 million in assets, and was slowly losing market share, due largely to what he described as “reputation and service issues.

“It was profitable but going in the wrong direction,” recalls Crowe, noting the Williamstown Saving had too much emphasis on residential-home lending. So Crowe initiated new products and services at Williamstown Savings, including the opening of a new commercial-loan business.

“Savings banks weren’t really into that when I first started out,” Crowe said of commercial lending.

“It used to be all about residential (loans) and deposits. Period.”

Though Williamstown Savings ultimately turned its fortunes around and prospered, Crowe said the banking industry overall was undergoing major changes throughout the 1990s, symbolically culminating in 1999 with Fleet Financial’s historic takeover of BankBoston, the former Bank of Boston.

That same year, Williamstown Savings entered talks of its own with Hoosac Bank of North Adams about possibly joining together.

As the larger of the two mutual banks, Hoosac entered negotiations with the idea of a straightforward merger with the smaller Williamstown Savings, said Crowe.

Hoosac also owned an insurance company – Coakley, Pierpan, Dolan & Collins.

But Crowe said Williamstown Savings had in mind a more unique arrangement: joining together under a holding company, allowing each bank to keep its hard-won brand identity within their respective communities of North Adams and Williamstown.

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Dossier continued from page 7

“We took a long time discussing this two-bank holding company idea,” said Crowe. “It was very complicated.”

The two banks ultimately struck a tentative deal – but their plan then hit a major regulatory hurdle: The Federal Reserve had its doubts about two mutual banks combining together under a holding company and its potential impact on customers and communities.

“Here we were, out in the Berkshires, two small mutual banks, and the Feds had already approved the much larger Fleet and Bank of Boston merger, and they were balking at our deal,” said Crowe, who admits to still being a little baffled by how long it took to finally seal the deal.

Regulators eventually approved the plan, and MountainOne was officially founded in 2002, three long years after Hoosac and Williamstown Savings first broached the idea of operating together within a single holding company.

Technically, the Hoosac-Williamstown deal wasn’t the first time two area mutual banks had combined together in such a fashion. Crowe noted that Lenox Savings and City Savings Bank had previously formed a holding company too, but they later merged into a single entity, Legacy Bank, which today has been merged into Berkshire Bank.

“Though we weren’t the first, we were the first to make it work and last,” said Crowe of marrying together two mutuals within a holding company.

To Crowe, the benefits of such an arrangement were and are obvious: The banks could internally consolidate all of their human resources, information technology, accounting, compliance, lending and other units, thus streamlining operations and saving money.

Perhaps just as important, keeping separate brands – Hoo8

sac Bank and Williamstown Savings – allowed them to stay linked to their communities in the eyes of customers.

“It helps keep you focused on your community,” Crowe said of maintaining separate bank brands.

“It has absolutely helped.”

In 2007, MountainOne added a third bank to its holding-company roster, South Coastal Bank of Rockland. Located in the South Shore area of eastern Massachusetts, Rockland is most definitely not in the Berkshires, Crowe notes.

“We weren’t the first, we were the first to make it work and last.”

But he said MountainOne wanted to expand into a more economically dynamic market within Massachusetts, rather than staying exclusively in the Berkshires, which has been economically stagnant in recent years.

The move into Rockland seems to have worked; in South Coastal Bank the holding company acquired $50 million in commercial loans that it wouldn’t have gotten if it had just kept its business focus on the Berkshires, Crowe said.

MountainOne has made other changes within the company over the years. It acquired another property-and-casualty insurer, Stevenson & Co., earlier this year and is also the owner of the True North investment advisory and insurance units. Three months ago, Williamstown Savings

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

Bank was officially made a unit of Hoosac Bank, though current plans call for Williamstown Savings to maintain its separate brand identity, Crowe said.

Moving forward, Crowe said he sees MountainOne making other changes and possibly expanding, though there’s nothing definitive on the table at this point.

While excited and pleased by MountainOne’s business model, Crowe warned that it may not be right for every bank. The main problem is the complexities of such arrangements – and the need for top executives and boards of directors at banks to be on the same page during negotiations.

“You have to have like-minded, committed people,” he said. “If they’re mutual banks, you have to mutually agree to everything. It’s hard to do. That’s why you don’t see it happening very often.”

To Crowe, the holding-company concept is just one option for smaller banks to keep an eye on their core strength: community banking.

“Community banks are really challenged these days to meet all sorts of requirements,” said Crowe. “The trend is worrisome.”

It’s difficult enough, he said, to compete against large banks and keep up with new technologies, such as mobile banking; they don’t need or deserve the type of regulations being slapped on them from above.

As for his post-retirement plans, Crowe, who is married and has two adult children, said he plans to continue serving on the boards of other companies, such as Savings Bank Life Insurance, the Federal Home Loan Bank of Boston, in addition to remaining as a director at MountainOne. He might even do some bank consulting.

“I’m healthy and energetic, so I intend to stay active,” he said.” n

LEGISLATIVE REVIEW

By David Floreen

Who Pays, for What?

I

t’s over and the voters have spoken – sort of. While Gov. former Mitt Romney gave it his all, President Barack Obama narrowly won several key swing states and the popular vote by 2.8 million votes.

Elizabeth Warren defeated Sen. Scott Brown by an eight-point margin and Rep. John Tierney surprisingly beat back an aggressive campaign by Republican Richard Tisei in the 6th Congressional district. Nationally, the Democrats expanded their control of the Senate to a 55-45 margin (including Bernie Sanders (IVT) and Angus King (I-ME), who are expected to caucus with the Democrats). The Republicans held the House but lost a net of seven, including both seats in New Hampshire. There are now only two Republican senators and no Republican congressmen in New England. The fundamental power structure may have shifted a bit.

At the Massachusetts State House, there were very few surprises. Four freshmen incumbent House Republicans lost their bids for re-election and two open seats switched parties for a net loss of three Republicans.

Senate President Therese Murray trounced Republican Thomas Keyes of Sandwich in a rematch of a close race two years ago.

For obvious reasons, both presidential candidates studiously avoided any meaningful debate on specific tax policies, yet much of the election centered

10

on “who pays, for what?” All the posturing on taxes, spending and support for the middle class was simply a smokescreen for avoiding a specific discussion of what services and programs governments should provide, to whom, what forms of taxes and fees should be imposed, and which taxpayers should pay for them?

“Cut my taxes, but don’t touch my mother’s Medicare! Why can’t the T be more reliable or our roads better maintained, but don’t raise fares or gas taxes to maintain or buy equipment!” Add your favorite program to the list.

Of course, Democrats generally support progressive tax policies that require higher-income taxpayers to pay more in an effort to moderate income disparity, invest in public infrastructure and provide more services to those in need. Conversely, conservatives disparage such income redistribution, favoring instead lower or flat taxes where the burden is shared equally by all income classes. The media furor over Romney’s claim that 47 percent of Americans pay no federal income taxes and Obama and Warren’s push to raise taxes only on households earning over $250,000 amplified the public’s divergent views. Did the election settle this clash? Absolutely not!

While Americans claim to support tax fairness and simplicity, according to the most recent data available, the top 5 percent of Americans in income pay close to 50 percent of all personal income taxes. Despite a steep decline in the top income tax bracket rates from the 1970s, high-income households

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

today pay a larger share of federal taxes than 40 years ago. The persistent perception that the tax system is rigged greatly hinders the ability or willingness of political leaders from both parties to utilize tax and fiscal policy to address the $16 trillion federal deficit through spending reforms and tax simplification.

The days between Thanksgiving and Christmas could have a profound impact on our nation’s economic future. Congress must deal with the “fiscal cliff,” the perfect storm of expiring Bush-era tax cuts, steep jumps in estate and capital gains taxes, elimination of the temporary reductions in Social Security payroll deductions, major cuts in Medicare reimbursements to hospitals and physicians, and the automatic $1.2 trillion spending cuts mandated by the August 2011 Congressional package to increase the public debt, known as sequestration.

Reports from Washington suggest a consensus may emerge to enact some spending cuts and revenue increases through loophole closings as an immediate down payment toward a major “grand bargain” spending/tax reform package in 2013. Let’s hope Congress gets the voters’ apparent message: work together (but don’t use a meat cleaver to butcher programs and services).

Beacon Hill Report Beacon Hill has been especially quiet this fall as formal sessions ended July 31. The deaths and nationwide outrage over the alleged sloppy practices at a Framingham drug compounding

facility and the alleged practices of a chemist at the state drug laboratory have dominated state policy news. We remain hopeful that prior to the end of informal legislative sessions in late December, the Senate will approve H 3775, the MBA’s priority bill to update and streamline a variety of banking laws dealing with corporate governance, internal procedures and related matters. In addition, we are working closely with the bar associations on H 25, a major update to Articles 1, 7 and 9 of the Uniform Commercial Code.

As noted, the Nov. 6 elections did not significantly alter the political landscape on Beacon Hill.

Unlike 2010 when 51 new legislators were elected and Republicans doubled their presence, this year we have 19 new legislators: three new senators and 16 new House members, a more normal 10 percent turnover. No incumbent senators were defeated and three new senators were elected to fill vacant seats. Thirteen new representatives were elected to fill vacant sets, while three freshmen Republicans, narrowly elected in 2010, were defeated.

Attention now turns toward the 2013-2014 session and potential priorities. Aside from the annual budget deliberations, which this year are tighter than expected as state tax revenues for the first four months of FY 2013 are $250 million below projections, progressives and other advocates likely will press hard for a complete overhaul of the $13.4 billion tax expenditures budget.

This includes numerous credits, deductions and exemptions granted to various business en-

tities or sectors. This issue may generate significant attention in the early months of the new legislative session.

Another early priority will be addressing the long-term financing of the state’s transportation system. Last June the Legislature enacted a one-year, stop-gap financing mechanism to help the MBTA and regional transit authorities limp through one year with a combination of a 25 percent fare increase, and one-time state assistance and service cutbacks. Gov.

Banks across the commonwealth and several leading members of Congress have vigorously opposed the Basel III standards.

Deval Patrick has promised to introduce a major transportation finance package early in 2013, which should set the stage for spirited debate on who pays for what transportation services and infrastructure improvements; critical elements of enhancing our state’s economy.

The MBA is considering several ideas for its agenda for the upcoming session in anticipation of the Jan. 16, 2013, filing date. Details will be outlined in the next issue.

Washington Report Congress held a few short sessions in mid-September before recessing, and postponing all

critical decisions until after the elections. Interpreting election returns from key swing states is difficult, but economic populism, help for the middle class, and women’s issues, remain strong.

While the Washington media focused almost exclusively on election issues for months, the regulatory agencies have been busy. The Basel III capital standards proposed by federal bank regulators have generated enormous concerns throughout the banking industry, especially by community banks as well as a number of members of Congress.

(See the Chairman’s Column in this issue.) Mutual banks, 70 percent of all Massachusetts banks, would be deeply impacted by the proposed rule as it would strain their capital levels and reduce their ability to make loans and provide many services community banks so generously offer.

Banks across the commonwealth and several leading members of Congress have vigorously opposed the Basel III standards.

It remains very unclear when or how the agencies will respond to the onslaught of criticism they have received regarding Basel III; however, the Jan. 1 implementation date has been postponed.

The Consumer Financial Protection Bureau (CFPB) remains extremely busy. In early October the CFPB issued extensive guidance on the new remittance rules set to take effect on Feb. 7, 2013. The rules require banks to disclose to a consumer, prior to the transaction, the exchange rate, fees, and taxes, and the amount of money to be delivered abroad, and provide a continued on page12

Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

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Legislative Review continued from page 11

proof of payment after the transaction. Although banks making less than 100 remittances per year are excluded from the rule, many local banks will be impacted as the changing demographics of the Commonwealth make providing remittances an important product offering.

In early October, the CFPB released substantial new rules governing the debt-collection practices of non-bank lenders, entities that frequently had escaped any significant oversight by the federal government or many states.

In addition, the CFPB is still finalizing long-awaited rules to require lenders to verify a borrower’s ability to pay unless a loan is

a so-called “qualified mortgage” (QM). The delay in finalizing this rule suggests that a companion rule governing high-quality or socalled “qualified residential mortgages” (QRMs) will also be delayed. Additionally, the CFBP is wrestling with complex regulations to simplify the Truth in Lending Act and RESPA disclosures, and craft a unified disclosure statement for all home loan customers.

Finally, expect several changes in key positions: Treasury Secretary Timothy Geithner and Securities and Exchange Committee chair Mary Shapiro are expected to step down. Rep. Jeb Hensarling (RTexas) will likely assume the chair

of the House Financial Services Committee, while Rep. Maxine Waters (D-California) will become the ranking minority member. Six committee members lost their re-election bid and five retired, including former chairman Barney Frank.

Deadlines always matter, and this year the December deadlines to act on many high-stakes fiscal and policy issues are more crucial than ever. In the words of one former Speaker of the House: “Satisfy the irritated without irritating the satisfied.” n David Floreen is senior vice president at the MBA. He can be reached at dfloreen@ massbankers.org

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M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

Students Receive Awards from the MBA Scholarship Foundation

T

he Massachusetts Bankers Association (MBA) Scholarship Foundation has awarded four $1,500 college scholarships to the children of eligible bank employees.

The MBA Scholarship Foundation Awards are open annually to entering-college freshmen who are the children of MBA member bank employees. The foundation reviewed 61 applications and chose

four recipients to receive an award of $1,500 each. In addition to submitting GPAs, SAT and ACT scores, and extra-curricular activities, the entrants were required to answer the essay question: “What would you do to bring more financial education to consumers? Suggest program ideas for specific age groups.”

“The scholarship award recipients are wonderful students, very

Alicia Pickering (third from left) accepts her award from the Massachusetts Bankers Association Scholarship Foundation. Left to right: Wayne A. Cottle, president, Dean Bank; Kerry Pickering, Dean Bank; Alicia; and Bruce Spitzer of the MBA.

talented, active in their schools and local communities, and smart,” said Daniel J. Forte, president and CEO of the MBA. “We see a bright future for all of them and wish them much success in college and their future careers.”

The MBA Scholarship Foundation also provided two “Honorable Mention” awards to applicants.

Brendan Sweeney (second from left) accepts his award from the Massachusetts Bankers Association Scholarship Foundation. Left to right: David E. Wallace, president, LowellFive Cents Savings Bank; Brendan; Maura Sweeney, LowellFive; and Bruce Spitzer of the MBA.

The Scholarship Recipients

Name & Address

College

Parent

Bank

Emily Paley

Muhlenberg College

Susan Paley

The Village Bank

Middlebury College

Paul Falvey

Holbrook Cooperative Bank

UMASS Amherst

Kerry Pickering

Dean Bank

Boston College

Maura Sweeney

Lowell Five Cent Savings Bank

Newton, MA

Paul Falvey, Jr. Hingham, MA

Alicia Pickering Blackstone, MA

Brendan Sweeney Reading, MA

The Honorable Mention Recipients

Name & Address

Parent

Bank

Christopher Bunce

Lynn Bunce

Hampden Bank

Kathleen Marcum

Millbury National Bank

Springfield, MA

Ashley Marcum

n

Grafton, MA Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

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Pension Plans: the Reward and Challenge

by Frank Maloney

I

n Massachusetts, banks have been offering their employees retirement plans since the 1940s. This employee benefit has been valued by many generations of tellers, customer service representatives and officers. As the years have passed, the form of retirement benefits has changed with the industry and the needs of its employees, including the defined benefit plan. Before moving to the next generation of plans, this article will argue for maintaining and strengthening the traditional form: the defined benefit plan.

The defined benefit plan is ideal to retain and incent those employees critical to each institution’s success. It promises each participant a benefit at retirement that is a function of the employee’s age, service and average compensation. It rewards career employees for their commitment to their employer. It is a significant deferred-compensation incentive for employees of banks, encouraging them to work through their fifties and sixties when the growth in pension benefits is most substantial.

As the years of service add up, they are applied against generally higher average compensation, resulting in a growing benefit. No amount of 401k contributions can keep up with the increasing value of a pension plan late in a participant’s career. Additionally, from the employee’s perspective, this growth is not subject to the whims of the investment marketplace.

Benefit growth is constant and predictable, geared toward providing each individual with a lifetime

14

stream of payments. This promise is especially critical as life expectancies increase. For employers considering hiring individuals later in their careers, a pension plan can be a meaningful enticement.

From the employer’s perspective, the funding of a pension plan is more efficient than a 401k plan in providing benefits to those employees who are most concerned about retirement. The efficiency comes from hiring professional investment managers with instructions to focus on the long-term best interest of the plan and its participants. This approach leads to less overreaction to changes in the marketplace and better maintenance of strategic long range asset allocation as compared to a typical 401k investor. Funding costs are spread over working careers of participants. There is opportunity for favorable investment returns and plan census experience to reduce costs. A well-run plan will also have administrative efficiencies.

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

Examining Pension Plans With these positive employee and employer attributes, why are pension plans under scrutiny in the current environment?

Among the challenges is the lack of appreciation by employees, especially younger ones. Pension plans are about deferred gratification, receiving something at retirement. In comparison, 401k plans allow for immediate gratification: a current contribution; a daily balance; an immediate scorecard. Many employees cannot see themselves still working at their employer five years from now; never mind 25 years in the future, when the pension plan will be the most valuable.

For employers, the funding costs continue to rise due to lower earned and expected investment returns. Lower discount rates generate higher present value of liabilities resulting in plans being less-well funded and the need to

make additional contributions to maintain funding levels. Additionally with the passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21), the penalty for being underfunded has been raised, as PBGC variable premiums will double over the next three years. Can employers, in this uncertain economic environment, accept the risks and volatility in maintaining the long-term commitment of a pension plan?

Employers do have the tools and investment alternatives to address these challenges. As with any employee benefit, its value is derived from the understanding and appreciation by the employee population. Employees must be educated about the value of a fully funded plan by the employer, provided without their responsibility to make good investment choices; and not subject to investment market fluctuations. They must also be made to understand that value grows more rapidly as time of retirement nears; and that the distribution will be paid to them for the rest of their lives after retirement.

These strengths will attract and retain talented individuals.

To facilitate the delivery of these benefits, employers should adopt investment strategies that reduce the volatility of funded status. The investment management industry has introduced many products in response, among them are portfolios focused on liability-driven investing, on global tactical allocation, and on a risk parity approach to constructing a balanced portfolio.

Liability-driven investing attempts to match the change in asset value with the change in liabilities. Falling interest rates are generally a greater threat to funded status than individual investment manager underperformance. By constructing a portfolio that matches the liability increase resulting from changes in interest rates with a portfolio that will track the change, the net affect to funded status is lessened.

Global tactical allocation instructs qualified managers to take advantage of the growing investment alternatives around the world and quickly react to opportunities while maintaining the focus on the long term. Risk parity portfolios attempt to balance the contribution of different asset classes to return volatility. The typical balanced portfolio’s volatility is driven primarily by equity performance. By spreading the risk in a more balanced manner, resulting investment returns are much less variable.

Even as the number of investment tools increase to deal with the challenges of maintaining a well-funded plan, the reality of low interest rates requires more employer contributions. Making additional contributions, up to tax-deductible limits, has several advantages. It is an effective way of improving funded status, of using the low earning cash residing on an employer’s balance

sheet more strategically, taking advantage of tax planning opportunities, as well as providing future funding flexibility when investing in business ventures may be a more appropriate use of the cash. These contributions would also reduce future PBGC variable premiums.

By employing different investment structures in the plan’s portfolio and contributing more, volatile and increasing funding expenses can be better managed. A well-administered, wellinvested and well-funded pension plan will continue to meet the needs of community banks and their employees into the future, for the benefit of both employees and the financial institution. n Frank Maloney is president of The Cooperative Bank Employee Retirement Association (CBERA), providing retirement and other benefits to members of the Massachusetts banking industry.

Seeking Enforcement Litigation Deputy The Office of Enforcement at the Consumer Financial Protection Bureau (CFPB) seeks to hire a Litigation Deputy to serve on its senior leadership team.

As one of four Litigation Deputies reporting directly to the Enforcement Director, this Litigation Deputy will primarily: • Manage 20-30 litigation attorneys and paralegals who conduct investigations and litigate cases, as well as support compliance examinations, concerning depository and non-depository entities.

• Oversee issue teams analyzing potential matters for Enforcement action relating to consumer financial products and services such as credit cards, deposit accounts, payday lending, and money services.

• Serve as a member of the Office’s senior team in planning, directing, coordinating and evaluating CFPB’s Enforcement programs.

Successful candidates will have the following skills and experiences: • 5+ years experience in-house at a depository institution, handling legal or compliance functions relating to Federal Consumer Financial Laws.

• Demonstrated capacity to manage a complex assortment of simultaneously pending investigations and litigation.

Interested candidates should send a resume and cover letter to CFPBOfficeofEnforcement-Recruiting@cfpb.gov.

Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

15

BANK TECHNOLOGY

Coping with the Burdens of Dodd-Frank BIGGER THAN Y2K?

by Jay Fitzgerald You might think that 12 years after all banks successfully worked through Y2K – indeed, avoiding a crisis in the process – that the next challenge would be easy. Enter Dodd-Frank. The Dodd-Frank Act has come to mean many things to many people, but if you ask bank technology execs what’s worse, the legislation itself, or the snail’s pace of the rulemaking, you’ll get disconcerting answers on both related to compliance.

J

ames Stanton, a manager at Boston’s McGladrey LLP, initially laughed when asked whether the DoddFrank Act passed two years ago by Congress will have a big impact on the information-technology side of the banking industry.

“It’s going to be astronomical,” said Stanton, whose Charlestown accounting firm specializes in helping area banks with their internal auditing and IT needs. “Let’s just say it’s not unusual for the government to apply new rules to banks – and then not pay much attention to their potential costs.”

Collectively, banks across the country could spend billions of dollars in efforts to comply with Dodd-Frank.

Larger banks with robust internal IT departments can handle some of the work load in-house, but many community banks will have to outsource some work to consultants and processors.

The problem is no one can yet define how “astronomical” the requirements to comply with Dodd-Frank might be in the end to each individual bank.

Across the state and country, bank executives, auditors, technology consultants, software vendors and others are all bracing for the virtual tsunami of new banking rules coming out of Washington, as regulators still digest the more than 2,000-page Dodd-Frank bill and slowly move toward drafting and issuing the actual rules to enforce what Congress has dictated for the banking industry.

In general, they know the broad regulatory areas that will require an extensive commitment of banking resources in order to comply with Dodd-Frank: more data and controls on lending practices, mortgage loans, risk management, deposit account disclosures, trading compliance, capital reserves, security and other issues. continued on page 18 Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

17

The Burdens of Dodd-Frank continued from page 17

Some large banks are already working hard to comply with what they currently know about Dodd-Frank, such as Bank of America’s development of a new software platform related to international remittance processing, as called for in section 1073.

Meanwhile, smaller and mediumsized banks have small armies of IT consultants who are already pouring over the general language of DoddFrank and making preliminary assessments about what type of systems banks now have – and what they might need moving forward.

Stanton, a former manager at Sovereign Bank, said he already sees one major problem spot that could cost banks, both big and small, a lot of money once the Dodd-Frank rules go into full effect: Mortgage loan data, now often stored on multiple core computer systems.

Many banks have multiple computer systems for mortgage originations, risk assessments and loan servicing – and all that data will probably have to brought together to meet some new regulatory rules, said Stanton.

“It’s a lot tougher than it sounds,” he said.

To Stanton, the ultimate general goal of Dodd-Frank is about tracking and compiling data. Specifically, the demand for up-to-date data that banks can turn over to regulators on an accurate and timely basis when demanded – and so a lot of new software code and core systems may be needed to comply with those demands.

Though various IT consultants declined to estimate how much DoddFrank will cost banks, one banking-industry vendor estimated costs could range anywhere from $10,000 to $1 million for small- and mediumsized banks, and tens of millions of dollars for multi-state regional banks.

The price tag for large national banks could easily top $100 million, one vendor noted.

But it all depends on two things: What type of systems individual banks currently have and what type of rules are ultimately issued by regulators.

“Hundreds of thousands of dollars 18

isn’t an unreasonable estimate over the course of a few years,” Paula Chesbrough, executive vice president and chief information officer at Everett’s Eagle Bank, said of the estimated average cost to small banks to comply with Dodd-Frank.

The frustrating thing is that there’s no consensus among bank technology officials about how much Dodd-Frank might impact the industry, precisely because every institution has its own computer system that may or may not need major upgrades. “There’s no way to standardize or compare,” said Chesbrough. “We consult with each other.

But we can’t do (strict comparisons).”

Fortunately for Eagle Bank, Chesbrough said her $450 million-assets institution recently installed a new core system that should be able to handle most of what Dodd-Frank may require.

“But there’s always going to be problems,” she said. “There’s always the fear of the unexpected.”

The “unexpected” fears ultimately come down to what rules are written – and the timeframes laid down by regulators for compliance.

“Right now, it’s mostly a waiting game,” said Frank Braudis, president of Reading’s Systems Viewpoint Inc., an IT consulting firm that helps New England banks and financial institutions to develop policies and procedures on compliance-related issues. “Everyone is dealing with this. Once those rules start to come out, everyone is going to drop everything and get going.”

For Braudis, the Dodd-Frank bill has the likely potential to eclipse requirements set down by regulators in the 1990s, when banks were told they had to prove they could withstand software threats posed by the Y2K glitch and, when the Gramm Leach Bliley Act required banks to take steps to protect consumers’ banking information.

Each of those requirements entailed a massive and expensive scramble by banks to comply with new rules within a relatively short period of time.

“Things really got dicey with Y2K,” recalls Braudis, noting how banks were required to make a 100 percent inventory of all IT software, then catalog and

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

test the software. “Anything with a chip in it had to be identified and tested. We were overrun with work. The regulators weren’t taking any prisoners.”

On the surface, the Gramm Leach Bliley Act, passed in 1999, initially looked somewhat straightforward. But deep inside the bill was a “short clause” that stated banks needed to take additional steps to safeguard the bank information of millions of customers nationwide, Braudis recalls.

“That got into everything,” said Braudis of the act’s impact on banks’ computer systems. “It was a nightmare that required massive resources.”

And it didn’t just apply to banks’ internal IT systems, but it also required “complete vendor management” – or making sure off-site vendors’ systems and data centers were also secure.

Other recent rules have forced banks to come up with new disaster-recovery plans.

Some banks have even held off-site disaster-recovery simulations to see how their systems might work in emergencies, Braudis noted.

At this stage, the main problems with Dodd-Frank are that there are so few final rules written and issued so far – and the concern is that there may be one or two seemingly innocuous rules that blossom into giant projects for banks. “We’re just scratching the surface right now on what we know about Dodd-Frank,” Braudis said.

Some industry “white papers” have been written predicting any number of scenarios in the future. But they’re all just theoretical at this point, Braudis said.

James Gordon, first vice president of technology at Needham Bank, said Y2K and the Gramm Leach Bliley era now seem so distant, almost quaint, compared to what could be coming.

Smaller banks used to get by with a few part-time people working on compliance-related issues. “Those days, if they’re not already gone, are quickly eroding away,” said Gordon, noting Needham Bank now has four people working on compliance and risk-assessment matters.

From a financial standpoint, there are no bottom-line returns for banks complying with Dodd-Frank. It’s just going to add pure costs to the price of doing business, unlike other IT technology upgrades that can expand a bank’s market offerings, such as mobile banking, Gordon said.

Though lawmakers initially said postLehman Brothers reforms would be aimed mostly at the alleged “Too Big to Fail” Wall Street firms, it’s clear smaller banks won’t escape new rules.

“They kind of nudged us and said, ‘Hey, you’re a good guy. Don’t worry about it,’” said Gordon of pre-DoddFrank assurances that future regulations wouldn’t be too burdensome on smaller banks. “It’s not going to turn out that way.”

David Sidon, a principal at the Navis Group in Gloucester, said tech people are not quite sure when new rules will start rolling out of various government agencies, such as the Federal Deposit Insurance Corporation, the new Consumer Financial Protection Bureau and, ultimately, the Federal Financial Institutions Examination Council.

“It really is a case of wait and see,” said Sidon, who works with banks on their IT needs. “The biggest fear is the time they’ll give us to comply.”

Noting that Dodd-Frank rules are coming out at a time when banks are also dealing with new Basel III global capital standards, Sidon said banks and their IT partners “expect a lot of time and a lot of angst” spent on future compliance work.

Needham Bank’s Gordon said an average bank has dozens of different software vendors at the ready once rules roll out. “It’s a lot of systems that may

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19

The Burdens of Dodd-Frank continued from page 19

need (software) re-writes,” he said, ticking off the various types of software needed for ATMs, mobile applications, loan systems, compliance issues and risk assessment.

Past regulations, such as on overdraft-related issues, required a “significant response” that vendors had to scramble to complete. “For a lot of vendors, it came down to the wire,” he said.

Will banks and their consultants have to hire extra people to comply with Dodd-Frank provisions?

“That’s a good question,” said Tom Grottke, president of Northeastern Banking Services Group, a Hartfordbased firm that works with community banks. He said his firm probably won’t hire extra people, though he didn’t discount the possibility, if not the probability, that some banks and vendors will have to beef up staffing to make sure they comply with Dodd-Frank, whether or not the extra workers are full-time or part-time.

Banks with assets under $500 million now have, on average, two full-time workers to comply with various government regulations, Grottke noted. Depending on the condition of their current computer systems, some banks may be able to get by without hiring extra people, he suggested.

But they probably won’t escape all the costs associated with Dodd-Frank, he said.

Grottke said he expects a lot of new rules to come out of the recently established Consumer Financial Protection Bureau, focusing on mortgage disclosures and mortgage lending practices.

As for general IT compliance needs, he said that, along with DoddFrank and Basel III requirements, changes in general ledger systems and core systems may well be in store for some banks.

He indicated software vendors will “struggle” to meet regulatory deadlines.

“They’re definitely aware of what’s coming down,” he said.

Among some of the biggest and most well-known bank software vendors in

the country are Fiserv of Wisconsin and FIS Global of Florida.

In the end, Grottke said he thinks Dodd-Frank will be a much bigger compliance effort than banks have seen in the past. “It’s massive,” he said. “It’s much broader in scope.”

One thing is perfectly clear, thanks to all of the uncertainty, bank technology officers across the state are disheartened, but they stand ready to move in whatever direction necessary, despite the additional burden.

Chesbrough noted 10 years ago, she used to spend about 20 percent of her time on compliance-related issues. Today, it’s more like 80 percent of her time.

The great irony, of course, is that 8,000 smaller institutions across the country, which had nothing to do with causing the financial crisis that precipitated the DoddFrank Act, will be bearing disproportionate costs to comply with the new rules.

“I sometimes ask myself,” said Chesbrough, “‘how do we find the time to serve our customers with all these requirements?’” n

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OntheMove Gregory Burke

Renee Letendre

Nancy Silvake

Ryan Matteson

Jayme Burdett

William Henning

Carolyn Macedo

Bradley Wilson

Derek Craig

Jeffrey Smith

Jann Alden

Jacqueline Theis

Nancy Wood Dupont

Diane Kenyon

BANK OF CAPE COD – Hires Gregory Burke, senior vice president, risk officer.

BARRE SAVINGS BANK – Hires Renee Letendre, office/sales manager.

BAY COAST BANK – Promotes Nancy Silva, vice president of loan operations, and hires Ryan Matteson, assistant treasurer branch manager.

BAY STATE SAVINGS BANK – Hires Jayme Burdett, assistant vice president/ branch manager.

BEVERLY COOPERATIVE BANK – Hires William Henning, vice president, commercial loan officer.

BLUE HILLS BANK – Promotes Florence Celeste and Sheryl Howe, vice presidents; hires Michael Ferrara Jr., vice president, business banking team leader; Cristopher Troiani, assistant vice president, business

22

banking portfolio manager; Adi Tibrewal, assistant vice president, credit analyst; and Steven LaPierre, vice president, cash management.

BOSTON PRIVATE BANK & TRUST COMPANY – Hires Carolyn Macedo, senior vice president and sales professional; Bradley Wilson, vice president and fixed income portfolio manager; and Derek Craig, vice president, residential lending.

BRIDGEWATER SAVINGS BANK – Hires Jeffrey Smith, vice president and information technology officer.

BRISTOL COUNTY SAVINGS BANK – Promotes Jann Alden, Jacqueline Theis and Nancy Wood Dupont, assistant vice presidents.

CHICOPEE SAVINGS BANK – Hires Diane Kenyon, residential mortgage loan officer.

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

CLINTON SAVINGS BANK – Promotes Linda Midura, senior vice president and director of human resources.

EAST CAMBRIDGE SAVINGS BANK – Promotes Curtis Jones, assistant vice president and investment executive; David Papazian and Linda Bolduc, assistant vice presidents and business development sales managers; and hires Cormac McCarthy, vice president, commercial lending.

EASTHAMPTON SAVINGS BANK – Promotes Karen Craig and Eileen Hickle, branch managers; Jessica West and Elizabeth Schabaker, assistant branch managers.

ENTERPRISE BANK – Hires Kenneth Ansin, community banking director.

HAVERHILL BANK – Hires Matthew Martin, vice president of branch administration and business development;

PHOTO SUBMISSIONS:

Submit photos and text for consideration for inclusion in Massachusetts Banker to Barbarajean Adams at bjadams@ massbankers.org.

Linda Midura

Karen Craig

Jessica West

Elizabeth Schabaker

Kenneth Ansin

Matthew Martin

Paul Frank

Stanley Ward

Edward Cawley

Steven Stewart

Thomas Leavitt

Laura Dorfman

Robert Madden

Lawrence Pitman,

Jonathan Kelley

Tammy Martin

Paul Frank, vice president, branch manager and business development; and Stanley Ward, assistant vice president of loan servicing.

LOWELLBANK – Hires Edward Cawley, senior vice president, commercial lending; Steven Stewart, vice president, group leader-commercial lending.

Eileen Hickle

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MOUNTAINONE FINANCIAL PARTNERS – Hires Thomas Leavitt, president and chief executive officer.

Why do banks work with Liquid Capital?

NEEDHAM BANK – Hires Laura Dorfman, senior vice president of residential lending; Robert Madden, vice president of residential lending; Lawrence Pitman, vice president, commercial lending team leader.

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Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

23

OntheMove

continued from page 21

Tina Bohondoney

Katie Gatcomb

Jeffrey Camenker

Thomas Driscoll

Kathleen Faur

Angelo Russo

Tony Visco

Brian Madden

Julie Smith

Angela Sarna

Sabrina Webb

Patrick Lee

Steven Fessenden

Christopher Massenzio

Jeffrey Anderson

Donna Daigle

Michelle Reid

John DaLomba

Bernard Gagnon

Jessica McGarry

Phillip Noto Sr.

NORTH BROOKFIELD SAVINGS BANK – Hires Jonathan Kelley, assistant vice president, business development officer, commercial lender, and Tammy Martin, branch manager.

NORTH SHORE BANK – Promotes Phillip Noto Sr., commercial lending officer, and hires Tina Bohondoney, assistant vice president.

24

ROCKPORT NATIONAL BANK – Hires Thomas Driscoll, senior vice president of sales and business development.

ROLLSTONE BANK & TRUST – Promotes Kathleen Faur, branch manager, and hires Angelo Russo, vice president and commercial loan officer.

SAUGUSBANK – Hires Tony Visco, vice president and residential loan officer.

NORTHERN BANK & TRUST COMPANY – Hires Katie Gatcomb, vice president of compliance.

SCITUATE FEDERAL SAVINGS BANK – Hires Brian Madden, senior vice president of lending.

READING CO-OPERATIVE BANK – Hires Jeffrey Camenker, vice president and compliance officer.

SOUTH SHORE BANK – Hires Julie Smith, manager.

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

SOUTHBRIDGE SAVING BANK – Promotes Angela Sarna and Sabrina Webb, branch managers, and hires Gonzalo Puigbo, senior vice president of residential and consumer lending.

STONEHAM SAVINGS BANK – Hires Patrick Lee, senior vice president and commercial loan officer.

TD BANK – Promotes Steven Fessenden, credit manager, vice president in commercial real estate; Michael Arndt, commercial relationship manager; hires Pier-Luca Bruno, vice president, commercial loan officer; Lara Chilton, senior loan officer in commercial lending;

Michael Arndt

Pier-Luca Bruno

Lara Chilton

Rosemarie Silva

Rosemarie Silva, Christopher Massenzio, Aaron Paddock, Jeffrey Anderson, Joy Faust and Donna Daigle, store managers.

WALPOLE CO-OPERATIVE BANK – Hires Michelle Reid, branch manager.

WATERTOWN SAVINGS BANK – Promotes Torrance Dean, senior vice president, senior loan officer.

WEBSTER FIVE CENTS SAVINGS BANK – Promotes John DaLomba, vice president, credit department manager; Bernard Gagnon, vice president, group leader; and Jessica McGarry; business lending officer. n

Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

25

GoodNeighbors

PHOTO SUBMISSIONS:

Submit photos and text for consideration for inclusion in Massachusetts Banker to Barbarajean Adams at bjadams@massbankers.org.

BANKGLOUCESTER – Donates $15,000 to Cape Ann community organizations.

BAY COAST BANK – Donates $10,000 to Westport River Watershed Alliance Summer Intern Program.

BAY STATE SAVINGS – Donates $1,795 to American Cancer Society and $600 to Easter Sales.

BRISTOL COUNTY SAVINGS BANK – $5,000 to Newman YMCA; $5,500 to Dighton PTO; $7,000 to Katie Brown Educational Program; $3,000 to Rehoboth Food Pantry; $10,000 to Community Care Services; $10,000 to Boys & Girls Club of Taunton; $10,000 to Taunton Area School to Career; $5,000 to South Coastal Counties Legal Services, Inc; $3,000 to Bristol Elder Services; $3,000 to St. Vincent de Paul – Holy Family Conference; $32,000 to five organizations in the Southcoast region; and $33,360 to 10 organizations in Pawtucket, RI.

BRISTOL COUNTY SAVINGS BANK donates $10,000 in matching gifts from its “Batting A Thousand” fundraising campaign to support GiftsToGive, assisting local children in need and exposing thousands more children to community service. From left: Patrick Murray, president and CEO, Bristol County Savings Bank, and president, Bristol County Savings Charitable Foundation; Jim Stevens, CEO and founder, GiftsToGive; and Jon Mitchell, mayor, New Bedford.

BANKERS BANK NORTHEAST donates $10,000 to the MBA Charitable Foundation. From left: Sue Salecky, senior vice president, service and sales, and Rob Toffey, learning and development facilitator.

CHICOPEE SAVINGS BANK – Pledges $50,000 to Square One in five annual $10,000 installments.

CLINTON SAVINGS BANK – Donates $500 to Hands On Nature and $550 to Clinton Community Partnerships for Children.

COMMERCE BANK – Donates $2,800 to Easter Seals.

COMMONWEALTH COOPERATIVE BANK – Awards $2,000 in scholarships to 2012 high school graduates.

FAMILYFIRST BANK – Donates $1,000 to Ware Historical Commission’s “Fountain Fund.”

NEEDHAM BANK – Donates $8,000 to Medfield Afterschool Program.

WEBSTER FIVE CENTS SAVINGS BANK donates $2,000 to the Pleasant Street Neighborhood Network Center (PSNNC) to support its Park Steward program, which will create 35 summer youth jobs and seven supervisory positions. From left: Karen Kempskie-Aquino, vice president, Webster Five; Mary Keefe, director, PSNNC; three Park Steward Program youth workers; Shreena Bindra, Park Steward Program supervisor, PSNNC; and Richard Leahy, president and CEO, Webster Five.

NORTH BROOKFIELD SAVINGS BANK – Donates $6,300 to the 200th anniversary celebration of the town of North Brookfield and $3,000 to Camp Putnam.

SPENCERBANK – Donates $1,475 to Worcester County 4-H, Camp Marshall.

SOUTHBRIDGE SAVINGS BANK – Donates $1,000 to Why Me & Sherry’s House.

THE PROVIDENT BANK – Donates $20,000 to 40 diverse non-profit organizations.

26

BANKGLOUCESTER donates $25,000 to Addison Gilbert Hospital.

From left: Cynthia Cafasso Donaldson, vice president of ancillary services, Addison Gilbert Hospital; Thomas Lattof, board member, BankGloucester; Ken Hanover, president and CEO, Addison Gilbert Hospital; Paul Muniz, board member, BankGloucester, Patrick B. Thorpe, president and CEO, and Bob Muniz, board chairman, BankGloucester; and Susan Healey Payson, senior vice-president, philanthropy, Addison Gilbert Hospital.

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

SCITUATE FEDERAL SAVINGS BANK awards a $1,000 scholarship. From left: Marianne Howard, branch manager, and recipient Kaileigh Jarvis, Marshfield High School class of 2012 graduate.

SCITUATE FEDERAL SAVINGS BANK awards a $1,000 scholarship.

From left: Recipient James Arnold, Norwell High School class of 2012 graduate, and Sondra King, branch manager.

SCITUATE FEDERAL SAVINGS BANK awards a $1,000 scholarship. From left: Margie Zucker, customer service representative, and recipient Cassidy Paini, Scituate High School class of 2012 graduate.

SCITUATE FEDERAL SAVINGS BANK awards a $1,000 scholarship. From left: Recipient Molly Clark, Hingham High School class of 2012 graduate, and Brian Paglia, assistant vice president and branch manager.

WEBSTER FIVE CENTS SAVINGS BANK donates $3,000 to the Genesis Club, Inc. to support its employment and education initiatives. Left to right: Richard Leahy, president and CEO, Webster Five Cents Savings Bank; Kevin Bradley, executive director, Genesis Club, Inc.; and Luke Knowles, member of the Genesis Transitional Employment program.

SOUTHBRIDGE SAVINGS BANK donates $1,500 to Tradewinds Clubhouse to support its services to adults with mental illness in southwestern Worcester County. From left: Michael Forest, program manager, Tradewinds; Matthew Schneider, Heidi Nadeau, Michael Mulvey, Stephanie Leonard and Jennifer Macneil, Tradewinds volunteers; Scott Dungey, accounting manager, Southbridge Savings Bank; Margaret Jordan, director of mental health services, Human Resources Unlimited; and Bonnie Losavio, human resources manager, Southbridge Savings Bank.

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GoodNeighbors continued from page 27

MECHANICS COOPERATIVE BANK awards a $1,000 scholarship. From left: Recipient John O’Neil, Durfee High School class of 2012 graduate, and Deborah Grimes, marketing executive vice president.

NORTH SHORE BANK awards $1,500 to the Progeria Research Foundation. From left: Audrey Gordon, Esq., president and executive director, Progeria Research Foundation, and David LaFlamme, president and CEO, North Shore Bank.

MECHANICS COOPERATIVE BANK awards a $1,000 scholarship. From left: Recipient Nicole Ledoux, BridgewaterRaynham High School class of 2012 graduate, and Deborah Grimes, marketing executive vice president.

NORTH SHORE BANK donates $1,500 to the Peabody’s Annual Kids Day Celebration to help fund the food, games and entertainment. Left to right: David J. LaFlamme, president and CEO, North Shore Bank; Edward Bettencourt Jr., mayor, Peabody; and Michael Zellen, vice president, North Shore Bank, and co-chairman of this year’s International Festival, sponsor of Peabody’s Kids Day Celebration.

CHICOPEE SAVINGS BANK awards scholarships totaling $18,000 to six area class of 2012 high school graduates. Left to right: Brianna Lawlor, Chicopee High School; Erin MacDonald, Holy Catholic High School; Julia Duda, South Hadley High School; William J. Wagner, president and CEO, Chicopee Savings Bank; Danielle Benoit, West Springfield High School; Kara Rys, Ware High School; and Kara Yelinek, Ludlow High School.

28

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

SAUGUSBANK awards scholarships totaling $4,000 to two Saugus High School class of 2012 graduates. Left to right: Emily Covell, Saugus High School; Kevin Tierney, president and CEO, Saugusbank; and Brianna Cole, Saugus High School.

NEEDHAM BANK donates $7,000 to Newman Elementary School to support the renovations of its playground.

Pictured, Jeffrey Stewart, office manager, and Mark Whalen, president and COO, Needham Bank, with students of Newman Elementary School.

n

More new homeowners, more affordable refinancings than ever before.

Thanks to our partner lenders and a new, no-MI loan product, we've set new lending records for affordable home ownership.

E QUA L H O U S I N G O P P O RT U N I T Y

800

f

ec or

as

t

600 $570M

in millions

Together we are helping to restore the housing market and the Massachusetts economy.

$1Billion

1000

400 $298.3M

200

FY ‘11

FY ‘12

FY ‘13

www.masshousing.com Fourth Quarter 2012 n M A S S A C H U S E T T S B A N K E R

29

2012 – 2013 MBA Calendar Dates are subject to change. Announcements are mailed approximately six weeks prior to event.

For additional information, contact the education department at 617-523-7595. Visit our website at: www.massbankers.org

December 11

Annual Year-End Fiduciary Seminar Omni Parker House Hotel, Boston

April 10

Annual Spring Fraud Workshop Marriott Courtyard Hotel, Marlborough

11

Social Media and the CEO Marriott Courtyard Hotel, Marlborough

23

Annual Branch Manager’s Certificate Program-Part 2 Marriott Courtyard Hotel, Marlborough

13

The Next Generation of Payments: The Future is Now Marriott Courtyard Hotel, Marlborough

12

Social/Workplace Violence Survival Techniques Webinar

January 15

Comprehensive Director Certificate Program: Introduction to Bank Regulation Marriott Courtyard Hotel, Marlborough

31-Feb 1 CEO/Senior Management Conference

Westin Hotel, Waltham

March 7

Comprehensive Director Certificate Program: Dealing with People and Compensation Marriott Courtyard Hotel, Marlborough

19

Call Report Preparation Seminar Marriott Courtyard Hotel, Marlborough

19

Annual Branch Manager’s Certificate Program-Part 1 Marriott Courtyard Hotel, Marlborough

Event Highlight:

May

19-24 The New England School for Financial Studies: Freshman Class

Babson Executive Conference Center, Wellesley 21

June

Annual Branch Manager’s Certificate Program-Part 3 Marriott Courtyard Hotel, Marlborough

2-7

The New England School for Financial Studies: Senior Class Babson Executive Conference Center, Wellesley

3

MBA Charitable Foundation Golf Tournament Worcester Country Club

6

Annual Bank Technology/Retail Banking Conference & Exhibit Holiday Inn Boxborough Woods, Boxborough

25

Annual Branch Manager’s Certificate Program – Part 4 Marriott Courtyard Hotel, Marlborough

January 31 - February 1

CEO/Senior Management Conference Westin Hotel, Waltham

MBA Handbook on Deposit and Fiduciary Accounts in Massachusetts All you need to know to open and manage deposit, trust and business accounts Concise advice and reference materials $40 per copy plus tax and shipping To order visit: www.massbankers.org Or Call Annie Coldstream: 617-502-3816 Printed by the Massachusetts Bankers Association

30

M A S S A C H U S E T T S B A N K E R n Fourth Quarter 2012

ATMs changed banking transactions. The OptevaÂŽ Flex PerformanceSM Series transforms the entire branch operation.

The Diebold Opteva Flex Performance Series redefines what a branch can do, enabling tellers to provide higher-value services and branches to run more efficiently. By bringing together multiple functions—envelope-free cash and check acceptance, full recycling, cash sorting and note fitness-checking—this new technology dramatically reduces service and personnel costs. Another innovation.

And another reason why Diebold has remained a leader for more than 150 years.

For the entire story, visit diebold.com/boldinnovation.

1.800.806.6827 diebold.com requests@diebold.com

From site evaluation to building design to construction administration, DRL Associates can help you realize your vision, goals and budget for your bank’s new facility or branch renovation. Contact us and discover the value of working with an experienced design partner.

2 West St. Weymouth, MA 02190

www.drlarchitects.com

Tel 781-331-8541