Massachusetts Banker 3Q 2011 by The Warren Group

THIRD QUARTER 2011

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

Challenging Times for Wealth Management

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f e at u r e s

FASB TDR Rules

COVER STORY

Navigating Through the New Rules . . . . . . . . . . . . . . . . . . . . . . . 12

Challenging Times For Wealth Management............... 16

photo feature Charitable Golf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

C o l u mns

NEW Board of Directors

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

MBA Elects 10 Members to Board . . . . . . . . . . . . . . . . . . . . . . . . 20

d e p artm e nts

Dossier

Cambridge Savings Bank . . . . . . . . . . . . . . 6

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

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

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

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

Chairman CEO & Publisher President Group Publisher & Editor in Chief ©2011 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.

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

Treasurer: Michael E. Tucker, president Greenfield Co-operative Bank

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

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

Editorial, Production and Advertising Offices:

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

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

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

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

Chairman’s Column by Norm Seppala

The Long View

t is with much gratitude and excitement that I begin my tenure as your chairman of the Massachusetts Bankers Association. I purposely used the word “your” in the previous sentence, as opposed to “the” chairman. In a nod to my commitment to you, our members, the “your” adjective is in keeping with my goals for the year ahead: quite simply, to reflect the desires and objectives of our entire industry. We have our work cut out for us. As I embark on my journey as your new chairman, I am reminded of the many men and women who have held this position, who worked hard to advance our industry and to enhance our standing in the communities we serve. Over the past three years, we have been challenged by many adverse events not of our doing, starting with subprime mortgage lending, the freezing-up of credit markets, QE1, 2 and other market intervention, just to name a few, leading up to extensive and, in many cases, intrusive regulatory response and reaction. As we hopefully move away from this era, let us continue to make note of the relatively good position our local industry is in. Although we’ve seen that exposure to risk can come from many places and events that happen elsewhere can have a profound impact on our local economy, there are numerous touch points that can serve as a foundation for optimism. Let’s remind customers, regulators and lawmakers that it was the shadow banking system and Wall Street involvement and influence that created so much havoc.

As evidenced in the MBA’s recent small business study, we were, and continue to be, the economic drivers of wealth creation in our communities. We’re still the backbone in terms of lending and charitable support. Indeed, there is work to be done, and we’ve had setbacks in new laws and regulations relative to interchange and other ill-targeted pieces of Dodd-Frank. But the battle isn’t over. That’s why it’s all the more important to stay on point. In light of the recent breaches of customer information at retail stores, along with others we have dealt with, we need to hammer home the idea that the payments system, due to the anticipated price controls, will be in a state of flux as we all adjust. The payment system will work until it doesn’t. Legislatively mandated price controls (remember the old definition of a reasonable origination fee of 1 percent for mortgage loans?) will ultimately result in a narrow and unsustainable path. We will hold retailers to the fire and remind the world of their promise to return savings to consumers. We will remind regulators that if prices for services are reasonably and properly disclosed there should be no reason for further involvement. We will remind consumers that certain benefits may not be as easily available as our industry seeks to strengthen our sources of revenue. Last but not least, we will remind lawmakers that you can’t have it both ways. You cannot take away the industry’s revenue streams and expect that the delivery of goods and services will not be affected somehow, either in pricing or delivery. Speaking of tampering with the free market, the new proposed regulations for mortgage lending are

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

very troublesome, and something about which we all need to talk to our legislators. How did the U.S. government get so intricately involved in the mortgage market without thinking about unintended consequences? (How many potential homebuyers will be able to afford 20 percent down?) It is shaping up to be a classic example of a knee-jerk, over-reaching response, disguised as thoughtful remedial action. We all know it; the new regulations are really designed to make up for many years of lax oversight of others. Unfortunately, without vigilant action on our part, we may very well be included under the guise of “best practices.” As an industry, we need to reenergize and address lawmakers one-on-one, in groups and in numbers large and small. Engage your boards, friends and employees. We have more than 62,000 banking employees in Massachusetts. There is power in numbers. How can they help? Introduce them to the Mass. Bankers PAC. Now is the time, more than ever, to get employees involved. Engaged employees, en mass, can produce a powerful result. As I look ahead, please keep in mind that my role as your chairman will produce significant results with the cooperation of all of our members. Please keep me abreast of what’s happening in your own marketplace. Call, send an email, or grab me at an MBA event. Together, with the help of the MBA staff, we will make progress, day by day, one issue at a time. n Norman S. Seppala is chairman of the MBA and president and CEO of Granite Savings Bank, Rockport. He can be reached at nseppala@verizon.net.

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Dossier

Cambridge Savings Lives up to Cantabrigian Affinity for Education by Jay Fitzgerald Bank:

can be presented to youths by their peers in an entertaining and informative manner.

Cambridge Savings Bank

Headquarters: Cambridge, Mass. CEO:

Bob Wilson, since 2005

On Balance

Charter:

State, Mutual holding company

Assets:

$2.2 billion

Branches:

ATMs:

Founded:

1834

Employees:

280 full-time

Not that Wilson isn’t paying attention to the other day-to-day activities at Cambridge Savings Bank. Cambridge Savings, with $2.2 billion in assets and 15 branches, weathered the recent recession rather well, though it got nicked like other banks by the collapse of Fannie Mae and Freddie Mac’s securities, Wilson said. The bank, which has a tier-one capital ratio of 9.60 percent, picked up new customers during the recession, both individuals and businesses, Wilson said. “They were disenchanted with the services they were getting,” Wilson said of small- and mid-sized businesses newly brought into the fold. “Our commercial banking business is growing very well,” said Wilson, noting CSB now has about $500 million in commercial deposits and $900 million in commercial loans. “Our volumes have doubled in the last three to four years.” Within its commercial-loan unit, there’s also been an uptick in its commercial real-estate business, despite the still somewhat rough commercial real-estate market. “We think it’s kind of seen its worst days,” Wilson said of commercial real estate. “We’re seeing some very positive trends.” Those trends include slightly rising rents and lower vacancy rates within commercial real estate properties, he said. CSB’s subsidiary, Cambridge Appleton Trust, N.A., has also seen

Bob Wilson

he recent financial crisis exposed flaws within the nation’s oversight and understanding of financial services. Bob Wilson, chief executive of Cambridge Savings Bank, saw one particular problem that he felt was absolutely necessary to address as soon as possible: the lack of “financial literacy” among the nation’s financial consumers, including local folks. So he did something about it, creating the position of a full-time “financial education program manager” to develop, implement and oversee a series of educational lessons and group meetings under the umbrella of the bank’s new “CSBsmart” project. As of June, CSBsmart has successfully reached out to thousands of students and adults via its financial-education programs, with seminars ranging from how to budget and save money to how to build and maintain a solid credit rating. And Cambridge Savings Bank sees the program growing in future years, as it adjusts and improves its program offerings for schools, senior citizen centers and other com-

munity institutions, particularly those serving lower-income and minority individuals, that want to participate in CSBsmart. “We’re very proud of the results we’ve achieved,” said Wilson, whose bank embarked on the CSBsmart program last year. “We were hearing more and more [after the financial crisis broke] from people who were not as financially sophisticated as they should have been. We decided we needed to move and make a stronger effort at educating people. We’re very serious about this.” With Evan Diamond serving as the bank’s new education program manager, CSBsmart considers its turf to be the 17 communities falling under Cambridge Savings Bank’s CRA assessment area. Dozens of bank employees also get involved in organizing and running seminars at area kindergarten classes, in high schools and elsewhere. The program is even enlisting a professionally directed local youth theater group to help develop a stage production that can be performed at area schools, hoping that often complex financial issues

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

its assets under management double over the past three years to well over $500 million. Cambridge Appleton Trust is a joint venture with Appleton Partners Inc. of Boston. Wilson, who has been Cambridge Savings Bank’s chief executive since 2005, said 2011 is “looking excellent” for the bank in general. The entire Massachusetts banking industry performed relatively well during the recession, at least compared to banks elsewhere in the country, he noted. One of the reasons is because so many of today’s area bank leaders learned hard lessons from previous economic downturns, especially after the collapse of the Massachusetts Miracle in the late 1980s and early 1990s. “We did seem to learn our lessons from that,” Wilson said of the dark years following the severe downturn of the late 1980s. “We remembered what happened here and adjusted.”

The bank’s biggest investment is Diamond serving as its full-time program coordinator. But then came the even harder job of developing and fine-tuning programs – and getting the word out about what CSBsmart was all about. “We’ve cast a very wide net to make sure we were reaching everybody we can,” said Susan Lapierre, senior vice president of community relations and CRA officer at Cambridge Savings Bank. “It’s been exciting. We have also launched a financial education section of our website, cambridgesavings.com, where consumers can find information for kids, teens and adults by clicking on the CSBsmart tab in the upper right hand corner.” Some of CSBsmart’s offerings are designed after programs developed by the American Bankers Association, though Lapierre said Cambridge Savings Bank usually adds a “unique spin” to its seminars. Two such programs are its “Teach Children to Save” and “Get

Smart About Credit” seminars. CSBsmart also has its own “Money Management” program for high-school students, Lapierre said. The four basic areas CSBsmart tries to cover: budgeting and saving money; managing a checking account; understanding and keeping solid consumer credit scores; and recognizing and combating financial fraud. Since last year, CSBsmart has reached about 3,100 area program participants, with many students and adults receiving financial-education advice through the bank’s wide range of program offerings. Cambridge Savings Bank isn’t putting a number on how big it wants to grow CSBsmart – but the bank makes clear it wants to expand, as it further evaluates what’s needed and what’s working. “We want to stay flexible,” said Lapierre. “As long as there’s a need out there for this type of program, we’re committed.” n

A Commitment to Financial Education Cambridge Savings Bank’s positive day-to-day operations aside, Wilson makes clear one of the bank’s best achievements in recent years has been the establishment of CSBsmart – and making sure that customers have learned lessons about finances. CSBsmart was launched as various polls, conducted between 2002 and 2009, showed that more than half of all teenagers lacked basic competency in financial matters, bank officials said. That’s one of the reasons that Cambridge Savings, along with the Massachusetts Bankers Association, fully supports legislation now on Beacon Hill that would install a new financial education curriculum, grades K through 12, in the Commonwealth’s schools. The goal of the bank’s program is simple: “To contribute to the economic development of our communities and to the well-being of the people who live and work here,” according to CSB’s literature.

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

Legislative Review by David Floreen

Starts and Stops

t’s been nearly three years since the economy was jolted by the credit market freeze in September 2008, although clear signs of distress were evident far sooner. Since then the stock market has recovered much of its loss, large -corporation profits have grown, businesses are sitting on large amounts of cash and investing in capital equipment. However, housing remains stagnant, unemployment and underemployment remains stubbornly high, consumer confidence ebbs and flows, and energy prices only fuel uncertainty for business and consumers alike. Beacon Hill and Washington reflect this same start-and-stop indecision. There is widespread agreement that jobs and the economy are the issues, but far less consensus on what to do to. The Tea Party says cut, cut, cut the excessive government spending, while social activists decry the unraveling of the safety net, privatizing Medicare and declining support for education and other services and believe that targeted tax increases or reforms are essential. In the vast middle, however, polls suggest most voters are more pragmatic than political leaders acknowledge. In frugal New Hampshire, where conservative Republicans swept control of the Legislature from the Democrats last November, a June poll conducted by the University of New Hampshire Survey Center for the Boston Globe reported that among likely Republican voters, only 39 percent supported cutting Medicaid and less than 30 percent endorsed reductions in Medicare and Social Security. Is a new trend forming or is this an aberration?

The nation’s economy demonstrates this same pattern. This spring witnessed the longest steady week-by-week decline in the stock market since the early 2000s, heavily influenced perhaps by gasoline prices topping $4 a gallon in 17 states and threatening to surpass the all-time record of $4.11, reached in July 2008. Regular-grade gasoline is now around $3.60 – nearly 40 cents below the May peak. How much did this spike influence consumer confidence, which in turn affects consumer spending, which comprises two-thirds of the nation’s economy? A survey by the National Federation of Independent Business suggests that business confidence in May was the lowest in eight months, yet a survey of bank economists reports higher confidence looking forward to the second half of 2011. Conversely, unemployment in Massachusetts has dropped again to 7.6 percent. These spasms in the economy affect political leaders as well. By definition, an elected official’s raison d’être is to do something, show action, and solve problems, a fix-it mentality. Increasingly, many economists have voiced concerns that the best policy may simply be time. The current economic situation needs time to heal, and lots of it, to work through the supply of housing, regain a more solid employment picture, and adjust to new paradigms still in the formative changes. Political leaders may not have the luxury of time; their calendar is the next election and voters in 2010 demonstrated their impatience. That said, the Massachusetts Legislature, Congress, and especially the federal regulatory agencies, have been working on a number of issues that may have a profound impact on the scope, pric-

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

ing and delivery of products and services banks offer their customers in the months ahead.

Beacon Hill Report While more than 75 percent of state legislatures have concluded their sessions for 2011, the Massachusetts Great and General Court is still ramping up. To its credit, on July 1 the Legislature adopted a balanced state budget for fiscal year 2012, which Gov. Deval Patrick signed into law in mid-July. This budget was the most challenging in years as the state no longer had the cushion of $1.5 billion in federal stimulus funds to help balance its budget. Fortunately, state tax revenues for fiscal year 2011 were up 11.1 percent (nearly $1.9 billion over last year) and more than $700 million greater than projected last fall. Health care costs, led by Medicaid – which now consumes $10 billion a year – comprise more than 40 percent of the entire annual state budget. This level is unsustainable and drowns out support for education, transportation infrastructure, public safety, parks and the environment. Yet health care is the largest single employer in the Commonwealth and provides high wages, so cutting health care costs could translate into job cuts, adding real challenges to this process. The new state budget incorporates some cost containments for municipal health plans, but not at the level some had sought. The real health care discussions will continue well into the fall as all interested parties: insurers, hospitals, pharmaceuticals, businesses (large and small), direct-care providers and others try to hammer out reforms that achieve real costs savings without adversely continued on page 10

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Legislative Review continued from page 8

impacting the quality or availability of health care. Banks have a real stake in this process, as employers of 62,000 employees, as lenders to thousands of companies that provide health care, and as leaders on many hospital boards. Real forward progress my not occur until late fall or early 2012. Other major issues on the radar screen include: court and probation department reform; casino gambling; redistricting; provisions to require all Massachusetts employers to utilize the eVerify system to ensure they are not hiring an illegal immigrant; prohibiting public charities from compensating directors; repeal of the 2008 law prohibiting medical device or pharmaceutical companies from entertaining doctors or medical staff; and reform of debt collection laws. Later this summer we anticipate that the attorney general will issue the first changes to the state debt collection regulations since 1978, reflecting new technologies, the pervasive use of mobile phones and other collection techniques. Legislative committees have held a number of public hearings, covering many of the issues the association is tracking this session. Among the matters heard: the MBA-sponsored bill to update numerous banking laws; expanded privacy and data protections; statewide branching authority for credit unions; restrictions on interchange and overdraft fees; mandated financial literacy in the K-12 mathematics curriculum frameworks; the Massachusetts Uniform Trust Code; and several others. Committee action on most of these issues likely will be held until fall after the legislature returns from its traditional August recess, although the trust code may be approved during the summer, as it is scheduled to take effect on Jan. 1, 2012. Hearings on more than 50 foreclosure bills may occur this fall.

Washington Update Mention Washington to bankers today and many comments aren’t 10

printable in this publication. The pressure of coping with understanding, interpreting, implementing, communicating and paying for the plethora of new laws and regulations, and a new regulatory agency, are overwhelming to community banks. This wave of change, coupled with the ongoing languishing economy, which many attribute in part to the rampant uncertainty, is generating a level of angst among bankers not witnessed in decades. The high-stakes debate over extending the nation’s debt ceiling, and what spending cuts or tax increases may be a necessary part of that deal, only amplify the uncertainty gripping the financial markets.

“Later this summer we anticipate that the attorney general will issue the first changes to the state debt collection regulations since 1978, reflecting new technologies, the pervasive use of mobile phones and other collection techniques.” In early June, despite aggressive lobbying by banks across the nation and in Massachusetts, the Senate defeated by a vote of 54-45, an amendment sponsored by Senators Jon Testor (D-Montana) and Robert Corker (R-Tennessee) to postpone the effective date of the Durbin price control amendment adopted as part of the Dodd-Frank Act (DFA) of 2010. Under Senate rules, the amendment required 60 votes to pass. This provision directs the Federal Reserve Board to adopt regulations by July 21 that would limit the interchange fee a bank with assets greater than $10 billion may charge to process a debit card transaction. The restriction does not apply, at least for now to credit card or pre-paid debit cards. The Federal Reserve last win-

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

ter proposed a maximum fee of 12 cents per transaction, a rate far too low to cover transaction costs and fraud losses. It was very difficult to overturn a provision originally adopted by a 67-33 vote and sponsored by the second most-powerful senate Democrat, that was misrepresented by the bigbox retailers as a pro-consumer savings bill. Even some strong consumer advocacy organizations in Washington understood the fallacy of the retailer’s arguments. Fortunately, the Federal Reserve in its final regulations just released, improved its initial recommendation by increasing the maximum interchange debit fee to 21 cents and an additional 5 cents for fraud losses, and tweaked other language. Meanwhile, the regulatory process moves forward. On July 21, the one-year anniversary of the signing of Dodd-Frank, the new Consumer Financial Protection Bureau (CFPB) became operational, absent a permanent director. Interim directors still manage the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (Martin Gruenberg is acting director), although President Barack Obama has nominated individuals to fill those spots. Notably, Thomas Curry, former Massachusetts Commissioner of Banks and current director of the FDIC, is Obama’s choice to run the OCC. We applaud his nomination. Meanwhile, the leadership of the CFPB remains uncertain, as Republicans in Congress at the urging of the banking industry and others evaluate legislation to restructure the bureau into a five-member board. There are relatively few major bank legislative matters on the horizon. One of them is the ongoing push by large credit unions to more than double their commercial lending authority to 27.5 percent of assets with NCUA approval. The regulatory agencies, however, have a platter-full of weighty matters to resolve. They include implementing the qualified residential mortgage continued on page 29

Navigating Through the New FASB TDR Rules b y D a n i e l F. M o r r i l l

long-time customer walked into your bank and wanted to meet with you. He was distraught. He lost his job and needed help. You knew this customer well; your children and his played together on the same Little League team. Until recently, he had never been late on a mortgage payment (originated five years prior), and it was difficult for him to ask for a break while he looked for a new job. Naturally, you did your part and approved a loan modification, allowing him to pay interest only on his 30-year mortgage for six months. This was a common scenario during the height of the Great Recession, as bankers worked with customers – both retail and commercial – to give them breathing room to pull themselves back from the financial abyss. As the concessions grew exponentially, so did the confusion on banks’ balance sheets as bankers, accountants and regulators made best efforts to judgmentally apply existing accounting guidance to restructured loans – were they troubled debt restructurings or not?

New Rules for the Road In April, the Financial Accounting Standards Board (FASB) stepped in and issued new guidance for debt restructurings, bringing some long-awaited clarity to the classification of loan modifications. The new guidance will have wide-ranging effects on the way banks reserve for losses related to troubled loans, while at the same time imposing new quarterly and annual financial reporting disclosure requirements. The guidance, ASU 2011-02, clarified certain key issues to help 12

bankers determine whether to classify loans as troubled debt restructurings (TDRs). The overall concept of a TDR has not changed. That is, a significant concession is granted to a borrower that is experiencing financial difficulties. Here are some key issues addressed by the new guidance. • When determining if a borrower is experiencing financial difficulty, lenders should consider, among other things, whether (1) the borrower is in default on any of its debt, (2) it is probable the debtor would default without the loan modification (consider an adjustable rate mortgage that will adjust upward in the near future) or (3) the debtor has declared or is in the process of declaring bankruptcy. • An “insignificant delay” in payment is not considered a concession to the borrower. The FASB guidance addresses what is meant by an insignificant delay in payment, without establishing a bright line test. For instance, consideration is given to the amount of delayed payments in relation to the unpaid principal of the debt, or to the significance of the delay in relation to the frequency of payments due, or the contractual or expected maturity of the debt. Judgment will continue to be required to determine whether a delay in payment is deemed insignificant. For example, in the scenario described above, the modification allowing the customer to pay interest only for six months (considering 25 years of remaining payments due) would be considered an insignificant delay in payment and would not result in a TDR. If the remaining loan payments were for a much

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

shorter duration than 25 years, this assessment may change. • The effective interest rate test can no longer be used solely to determine whether a concession results in a TDR. Previously, many bankers and auditors looked at the problem from a debtor’s perspective. If the effective yield was not lower after the restructuring, then the borrower had not been granted a concession. This elimination may, for some banks, result in more loans being classified as TDRs.

Where Did this Come From? Like many changes in the financial industry, these new accounting rules have their roots in the economic crisis. As the economy worsened, an increasing number of homeowners and commercial borrowers sought help from their bankers, and bankers responded by modifying their loans. However, FASB had provided its last major guidance on impaired loans in 1993, at the end of the last major recession. When the Great Recession hit, loans were being classified inconsistently from one institution to the next. With banks failing and loan modifications rising, FASB saw the need to act. In announcing the guidance initiative last year, FASB’s then-Acting Chairman Leslie Seidman said the new rules would “result in more consistent application of GAAP for debt restructurings.” Some banks raised objections to the new guidance during the proposal period. They said the rules would be difficult to follow and potentially have an adverse effect on the allowance for loan losses. FASB listened and modified the initial proposal by acknowledging

that an insignificant delay in payment need not, by itself, count as a concession that ultimately requires the loan to be classified as a TDR.

What This Means for Your Bank The FASB guidance is good news for banks because it provides clearer guidance to lenders, auditors and regulators on how to treat loan modifications. Will the guidance result in more or fewer loans being classified as TDRs? It depends. Some banks will have more TDRs and others may have fewer, depending on how they applied the TDR rules prior to the new guidance and on the types of lending they do. Banks with higher concentrations in residential lending are likely to have fewer TDRs, as many of them collected only interest for a short period of time to help borrowers’ cash flow issues. These types of modifications would likely be considered insignificant delays in payment, and not concessions. The impacts to banks with higher concentrations in commercial lending are less certain. As banks try to maximize cash flows from the borrower, they may extend the maturity of the loan, ask for additional collateral or modify the loan in some other way. In most of these cases, it depends on the facts and circumstances of each loan as to whether the restructuring is a TDR. Not surprisingly, FASB’s new guidance would affect a bank’s allowance for loan losses. Banks that see TDRs increase will likely see a decline in general reserve allocations, but an increase in specific reserves on impaired loans. A decline in TDRs would have the opposite effect.

No Time to Waste For publicly traded banks, the new guidance took effect in the first interim period beginning after June 15 and covers all loan activity going back to the beginning of the fiscal year. So, in plain English, if a bank reports on a calendar year basis, the new guidance is effective for the

quarter ending Sept. 30, 2011, with application to all restructurings occurring since Jan. 1, 2011. Banks that are not public have a longer period of time to adopt the guidance – but the sooner the better. The guidance doesn’t apply to them until the first annual reporting period ending after Dec. 15, 2012, which means that they will apply the guidance to loans restructured after Jan. 1, 2012. It can be confusing, but early adoption is permitted. The best advice: why wait? Consistency counts in financial disclosure. With additional disclosure of TDRs required as of Dec. 31, 2011, by delaying a year, you put off having financial statements that treat these restructurings the same way. Why not have comparative financial statements showing these loans treated the same way? Communication also counts. Knowledge of the FASB guidance is one thing; applying it another. Application requires strong com-

Steps TO

munication between lenders and finance groups. How often have we all been surprised by a modification that was not properly communicated and therefore identified late in the financial reporting process? All must be aware of the guidance, and written policies will be required to identify how an institution will apply the guidance. With this in mind, a process will then be in place to determine if a loan modification is a TDR at the time of the restructuring. Indeed, communication is key in any business when the guidance changes. Be sure that you talk to your accountants about the new FASB guidance – there’s no time to waste. n Daniel F. Morrill, CPA, is a principal at Wolf & Company PC, a leading regional certified public accounting and business consulting firm with offices in Boston, Springfield and Albany.

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

PhoTO Feature

Charitable Golf Ah, yes, springtime in the City of Seven Hills (bet you didn’t know that’s one of the names of Worcester). It could be none other than the MBA Charitable Golf Tournament at the Worcester Country Club. There were sunshine, gentle June breezes, and frolicking birds (even a few birdies on the course). Did I mention blazing rhododendron? Augusta National has nothin’ on the WCC. Good times, low scores, and high marks for charitable work were blooming out all over. -- Bruce Spitzer

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

Challeng Times f by Jay Fitzgerald

assachusetts’ wealth-management industry has survived a number of economic storms over the past 150 years. Originally founded on the enormous wealth generated by the region’s whaling captains and clipper ship merchants, the wealth management business – whether in the guise of bank trusts, the earliest versions of mutual funds, or other investment vehicles – survived the collapse of the area’s once-dominant seafaring industries. It subsequently saw the rise and fall of the region’s mighty textile and manufacturing industries, the Roaring ’20s, the Great Depression, World War II, an unprecedented post-war expansion, two high-tech booms and two hightech busts. Through the years, the wealth-management industry has managed to both survive and thrive, making Boston and the commonwealth of Massachusetts almost synonymous with wealth-management, with literally trillions of dollars tucked away in all varieties of investment firms, both big and small, across the state. Today, industry experts say the local wealth-management industry is facing yet another period of historic change, brought on by the expected transition of Baby Boomers from working savers to retired budget-conscious seniors. And it’s coming at a time of growing caution, bordering on outright suspicion, among clients about whether the post-2008 financial-crisis world can handle their money with care and competence. Financial companies across the nation – and even across the world, as globalization intensifies – are now scrambling to adapt to the changing times and expectations. Brokerage firms, insurers, mutual funds, banks and other firms are all trying to gain, maintain, or regain the trust of clients. Industry experts agree the state’s wealth-management industry may soon be facing its stiffest competition ever for local, national and international clients. 16

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

“In the future, going forward, everyone is going to have to change in order to remain competitive,” said David B. Smith, chief investment officer at Rockland Trust. “Clients’ expectations and needs are changing – and [the industry] is going to have to adapt.” The bottom line for the wealth-management industry: Clients are not just looking for investment advice anymore. They’re also looking for all-encompassing, more time-consuming financial planning on a wide range of issues, from estate planning to how to pay for their longterm health needs. Whether they have a couple hundred thousand dollars or millions of dollars, clients are also demanding more transparency, particularly in the post-Bernie Madoff era, and information about wealth-management firms’ owners, managers, auditors, trustees, custodial banks and others with potential access to their savings. “Banks have generally been slower on this trend than brokerage firms, insurance companies and other advisors,” said Charles “Chip” Roame, a principal at Tiburon Strategic Advisors. “As the stock market roared ahead in the late 1990s, nearly anyone calling themselves a financial advisor of any kind became more narrowly an investment advisor,’’ said Roame, who has talked and written extensively about the changes he sees ahead for the wealth-management business. “But as markets have become more rocky, as we saw the economic stagnation, and as clients came closer to retirement, they have shifted to a whole host of other issues – health care, real estate, estate plans.”

Cape Ann Savings Bank E. Gail Ramos, senior trust officer at Cape Ann Savings Bank in Gloucester, said her $260 million trust department is already planning to hire two extra financial planners, as her firm adjusts to the new realities of the wealth-management marketplace.

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for Wealth Management “Clients are paying more attention and they want an integrated approach toward their investments,” said Ramos, herself a certified financial planner. Gone are the industry days of simply reviewing asset allocations with clients and sending off periodic reports and checks. Now wealth managers have to be prepared to sit down and also discuss taxes, health care and life insurance policies, mortgages, estate plans and other financial matters. “Half the battle is treating them like a partner,” said Ramos, whose department doesn’t have a set wealth minimum to do business with Cape Ann. “It’s more of a discussion with them, rather than us telling them what to do.” Even long-time clients are demanding more from managers.One elderly client, whose affluent family has done business with Cape Ann through five generations, was so concerned about the growing complexity of finances that she recently asked Ramos to prepare an investment “education program” for her daughter and grandchildren. The daughter and grandchildren already had trust accounts in their names, but the elderly client wanted to make sure they thoroughly understood how and why their accounts were arranged and worked, said Ramos. After the 2008 financial crisis, some people simply don’t want to manage their own investments anymore. One North Shore man with about “mid-six figures” in savings simply became overwhelmed with the volatility and complexity involved with managing his own investments, so he came to Cape Ann for help, Ramos said. “He realized that the investment world had become too sophisticated,” she said. “He was very frustrated.” Like other wealth managers, Ramos said clients, whether super rich or not, have become extremely cautious and even suspicious about the financial world, following the 2008 Wall Street meltdown and the multibillion-dollar Bernie Madoff scandal. “It shook people up,” said Ramos of last decade’s financial turmoil. “Every time they turned around they

were seeing stories about scandals and clients losing money. Even if they conducted long-term business with you, there were still those with a very skeptical nature toward the financial world.” The key is taking the time to walk clients through an institution’s history, safeguards, procedures and other measures designed to protect their investments. “We made it a point of reaching out to clients after the events of 2008,” said Ramos. “Did it take a little hand holding? Yes. But we didn’t lose any clients.” Cape Ann didn’t just keep its customers. Its wealth-management business has grown by 15 percent since 2008, Ramos notes.

Fiduciary Trust Co. Randy Kinard, vice president and investment officer at Fiduciary Trust Co. that has more assets under management ($10 billion) and a higher wealth minimum for clients ($2 million) than Cape Ann Savings Bank, said he’s seeing similar changes underway within the wealth-management business. Clients are becoming increasingly sophisticated and expecting more from managers, said Kinard, at the Bostonbased Fiduciary Trust. The firm’s investment platform has changed over the past decade. Many clients used to be satisfied with a portfolio of large-cap stocks and safe bond investments. Now Fiduciary Trust offers 14 asset classes, including smallcap and international stocks, high-yield bonds, “defensive” hedge funds, private equity and other investment options, said Kinard. “Even before the market cracked, we were thinking about and making these changes,” he said, adding that most clients are no longer interested in “Daddy’s G.E. stocks.” Besides more complex investment advice, Baby Boomers also want more guidance about trusts and estate planning, continued on page 18 Third Quarter 2011 n M a s s a c h u s e t t s B a n k e r

Wealth Management

more like financial quarterbacks, not just investment quarterbacks.”

continued from page 17

information about health-care and other long-term expenses, and how they can keep up with ever-changing tax and financial regulations, he said. Reflecting a general loss of trust in the financial markets in the wake of recent Wall Street controversies, new clients are pressing managers about “control processes” within institutions, auditors and where, specifically, assets are held. “Clients are asking questions that we rarely heard five years ago,” Kinard said. All of these new responsibilities take time and patience on the part of wealth managers. “You have to be a jack of all trades,” said Kinard. “It’s great if you like [and] are good at finances, but you also have to like people and dealing with their concerns. It sounds corny, but part of my compensation, I truly believe, is based on really helping people. We’ve often thought [at Fiduciary] that we’re

Rockland Trust Rockland Trust, which has about $1.7 billion within its investment-management group, saw changes coming before the 2008 financial crisis. “We began five or six years ago to move toward what I describe as ‘comprehensive wealth management,’’’ said David B. Smith, chief investment officer and a certified financial advisor at Rockland. To show how wealth-management has changed from a largely investment-advisor business to more of a financial-planner operation, Smith tells the tale of one Rockland Trust client who recently asked for advice about his real-estate holdings. The client had purchased a condo that he ended up not liking, and he wanted to move back into a larger single-family home. He ultimately found a $1.3 million South Shore home he really wanted – but hadn’t yet sold his condo in a tough housing market.

“He said he really didn’t want to make this decision in isolation,” said Smith, whose Rockland Trust group targets clients with net wealth of $1 million or more. “So we went over a lot of scenarios with him, about jumbo loans and bridge loans. We went over the scenarios again and again. Ultimately, he decided to pay cash for the new house, at our advice. We didn’t get an extra dime for our work. But he’s very unlikely to leave us now. He was happy for our help.” Smith said different clients need different “tender loving care,” depending on how much they’ve saved over the years. Clients with around $1 million in savings were hit hard by the recent financial turmoil. “The correction of 2008 really changed their lifestyles,” said Smith. As a result, they needed to make immediate and major adjustments in their lives – including sometimes selling their homes, dropping golf course memberships, getting rid of expensive boats and big-ticket items.

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“A 20 percent market correction will hurt someone with, say, $10 million, but you still have $8 million left,” said Smith. “It’s not going to really change their lifestyle. But even they want and need advice and ideas on what to do.” At Rockland Trust’s investmentmanagement group, each client is assigned a two-member team – a portfolio manager and a “relationship manager” who can deal with many of the non-investment issues facing clients. “We were so backed up with people wanting financial planning that we recently hired a financial manager – and we have a plan to hire more,” said Smith. Smith said he’s glad Rockland Trust adopted its “comprehensive wealth management” strategy a number of years ago. “It’s been a competitive advantage for us,” he said. “We hope some of our competitors continue to do what they’ve been doing – not changing. It helps us. But, ultimately, I think, the industry is moving in our direction. Things are changing.”

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Martha’s Vineyard Financial Group Martha’s Vineyard Savings Bank’s wealth-management and brokerage business, Martha’s Vineyard Financial Group, grew at a 10 percent clip last year and has grown 20 percent so far this year alone. The group, which manages $150 million in assets, isn’t just relying on a word-of-mouth strategy to grow. Robert G. Ripley, executive vice president, says the growth is partly, if not largely, due to its record and reputation for simply listening to what clients want and need, especially during tough economic times. It’s actively stepped up its advertising “to raise the level of awareness’’ that Martha’s Vineyard Financial Group can handle the concerns of potential clients, many of them wealthy individuals with long-time vacation homes on the resort island. “We’re bringing in people with $2 million to $3 million, which we didn’t see in the past,” said Ripley, whose

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Left to right: Dan Forte, president, MBA; Norm Seppala, chairman, MBA, and president, Granite Savings Bank; Ken Brennan, immediate past chairman, MBA, and president, The Village Bank; Dorothy Savarese, vice chairman, MBA, and president, Cape Cod Five Cents Savings Bank; and Kevin Kiley, executive vice president, MBA.

MBA Elects 10 Members to Board of Directors Norman S. Seppala Named Chairman At its recent annual meeting, the Massachusetts Bankers Association (MBA) elected 10 executives to serve in new positions on its board of directors, including Norman S. Seppala, president of Granite Savings Bank, Rockport, as the chairman of the MBA, serving a one-year term. “This is a terrific group of individuals and leaders,” said Daniel J. Forte, president and CEO of the MBA. “Their experience will serve our industry well as we continue our mission to be the primary economic drivers and community leaders in all of the cities and towns of Massachusetts. Norm Seppala, our new chairman, is the quintessential community banker with great respect in the community and a person that brings talent and experience to his new role as chairman of our organization.” Seppala has nearly 36 years of banking experience, and became the president of Granite Savings in 1990. “The banking industry is being redefined by forces that we couldn’t have anticipated even five years ago,” said Seppala. “In the year ahead, our great challenge is to let customers and other key individuals know that we never strayed from our mission and that we will continue to be the rock upon which so many depend in all of the communities that we serve.” Seppala underscored the new reality faced by bankers and said, “No longer can we expect the events that happen on the world stage not to impact us at home, however large or small the institution.” n 20

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

The 10 executives and their new MBA board positions include: Chairman of the Board Norman S. Seppala, president Granite Savings Bank, Rockport Vice Chairman Dorothy A. Savarese, president Cape Cod Five Cents Savings Bank, Orleans Treasurer Michael E. Tucker, president Greenfield Co-operative Bank Immediate Past Chairman Kenneth C. Brennan, president The Village Bank, Auburndale At-Large Directors Three-Year Terms: Joseph T. Baptista, Jr., president Mechanics Cooperative Bank, Taunton Donna L. Brady, senior vice president, government affairs RBS Citizens, N.A., Providence, RI (Re-appointment) Stephen G. Crowe, president MountainOne Financial Partners, North Adams (Re-appointment) John R. Heerwagen, chairman Middlesex Savings Bank, Natick James C. Lively, president Bridgewater Savings Bank, Raynham One-Year Term: Daniel C. Yates, president Brattleboro Savings & Loan Assoc., VT

Wealth Management continued from page 19

group has no minimum-wealth eligibility standards. Ripley’s group has recently added more staffing to meet the growing demand – including an estate-planning attorney and a financial planner. There are roughly two types of customers that the group now serves, Ripley said. The first are elderly, long-time island residents in their 70s and 80s who went through the Great Depression as children – and tend to be very conservative in their investments. But even they are asking for help beyond investment advice, such as bill-paying services and how they can find contractors for house repairs, Ripley said. Then there are the wealthy, parttime island residents, most of them Baby Boomers, who see retirement close on the horizon. They’ve lived through stock-market booms and busts, the birth of the 24/7 business news station CNBC, and they’re comfortable looking up financial information on the Internet. “Our challenge in working with them is convincing them that we can handle their life concerns,” said Ripley. “But most of their money is in big New York banks and elsewhere. An advantage for us is that people want their money close to them, so we’re targeting them if they live here more often.” The goal is to reassure current and potential customers that Martha’s Vineyard Group can provide sophisticated investment options and a wide variety of other financial-planning services that will help clients in the long run, said Ripley.

Looking Ahead Chip Roame, the principal at Tiburon Strategic Advisors, says the changes under way within the wealthmanagement business aren’t going away, even with recent improvements in the stock market and economy. “The stock market is essentially back,” he said in a recent email interview. “The trillions in losses in 2008 in both investable assets and retirement plan assets are back. The gaps

are in home values and small business valuations, neither of which has rebounded and some argue are still declining.” He said he sees major competition ahead for all types of clients, whether they have $400,000 to $1.5 million in savings or $5 million and up. Asked what are clients’ Number 1 priority moving forward and who is best equipped to meet that priority, Roame answered bluntly: “Service. I think many professionals

could fill the need, but most underestimate it. Tiburon believes that clients need 20 to 30 plus touches per year (meetings, calls, emails) to feel well served.” Asked to list in order the most important priorities to clients, Roame put it simply: “1.) Service; 2.) Unbiased advice; 3.) Financial planning. 4.) Investment performance.” Judging by the level of local activity, many area wealth managers have already gotten the message. n

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Securities offered through LPL Financial Member FINRA/SIPC Third Quarter 2011 n M a s s a c h u s e t t s B a n k e r

OntheMove Monique Angell

Kerry Corbin

Lisa Perrin

Tamara Bedard

Carrie Carrizosa

Kristen Jilek

Kelly McKernan

Diana Rochefort

Kathleen Darcy

Vincent Gregory

Gail Childs

Mark LaMountain

Thomas Burton

Charles Dunn

Alyssa Gorgone

Thomas Moschos

JoMaria Velez

Deborah Gagnon

James Barrett

Louise Nicholas

William Dwyer

ADMIRALS BANK – Promotes Nicholas W. Lazares, chairman. BANKERS’ BANK NORTHEAST – Promotes Monique Angell, operations specialist, and Kerry Corbin, relationship coordinator. BAY STATE SAVINGS BANK – Promotes Lisa Perrin, senior vice president, and Tamara Bedard, mortgage officer and senior underwriter. BOSTON PRIVATE BANK & TRUST COMPANY – Promotes Carrie Carrizosa, vice president and loan officer; hires Kristen Jilek, vice president and relationship manager; Lisa Mariotti, vice president and branch manager; and Kelly McKernan, vice president and portfolio manager. BRISTOL COUNTY SAVINGS BANK – Hires Diana Rochefort, branch manager.

CAMBRIDGE SAVINGS BANK – Promotes Karen Kindle, executive vice president; Michael St. Jean, Kenneth Dillon, senior vice presidents; Michelle Kinberg, first vice president and operations manager; Scott Tower, first vice president; Thomas Berton, first vice president and audit manager; Dana DiMartinis and Michael Kuhn, vice presidents; Diane Ryan, vice president and human resources manager; and Kevin Teller, assistant vice president; hires Kathleen Darcy, vice president and regional sales manager, and Vincent Gregory, vice president and residential mortgage sales manager.

Czuchra, Shari Hayes, Erik Porter, Christopher Richards, Phillip Stambaugh, Adrian Sullivan and Levin Waters, vice presidents; Patricia Erickson and Charles R. Givonetti, assistant vice presidents; Deborah Bonvan, credit administrative officer; Karen Buckler, residential and consumer underwriting officer; Kathryn Moorey, financial education officer; and Andrea Ponte, administrative officer. CLINTON SAVINGS BANK – Hires Mark LaMountain, assistant vice president and mortgage originator.

CAPE COD COOEPRATIVE BANK – Promotes Gail Childs, assistant branch manager.

COMMERCE BANK – Hires Thomas Burton, senior vice president, and Charles Dunn, Alyssa Gorgone and Thomas Moschos, corporate banking lenders.

CAPE COD FIVE CENTS SAVINGS BANK – Promotes Kenneth Anketell, Kimberly Chesnut, Alison

COUNTRY BANK – Hires JoMaria Velez, retail mortgage officer, and Deborah Gagnon, corporate outreach officer.

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

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

Paula Botelho

Anthony Medeiros

Dana M. Neshe

Michael J. O’Riordan

Brian W. Christensen

Richard P. Cole

Bruce A. Miccile

Michelle L. Fitzgerald

Gina M. Mazzaro

John S. Mega

John M. Nolan

Nicholas J. Riley

Mitchell Hryckowian

Jeffrey Kerl

Lacey E. Teixeira

William J. Carroll III

John Hibbard

Michele Ouhl

Janice Morse

Leslie Ross Lawrence

Michael Oleksak

EAGLE BANK – Hires James Barrett, executive vice president, chief financial officer. EAST CAMBRIDGE SAVINGS BANK – Promotes Gisela Margotta, senior vice president and Michael Allen, vice president. EASTHAMPTON SAVINGS BANK – Hires Louise Nicholas, commercial lender. EDGARTOWN NATIONAL BANK – Promotes Fielding Moore, president and CEO. FIRST FINANCIAL TRUST, N.A. – Hires William Dwyer, president and CEO. FIRST NIAGARA BANK, N.A. – Promotes David V. Ring, regional president. FRAMINGHAM CO-OPERATIVE BANK – Promotes Mark Haranas, president and CEO.

MECHANICS COOPERATIVE BANK – Hires Paula Botelho and Anthony Medeiros, vice presidents and commercial loan officers. MIDDLESEX SAVINGS BANK – Promotes Dana M. Neshe, executive vice president; Michael J. O’Riordan, senior vice president; Brian W. Christensen, Richard P. Cole and Bruce A. Miccile, vice presidents; Michelle L. Fitzgerald, Gina M. Mazzaro, John S. Mega, John M. Nolan and Nicholas J. Riley, assistant vice presidents; Mitchell Hryckowian, technology officer; and Jeffrey Kerl and Lacey E. Teixeira, credit officers. Hires William J. Carroll III, commercial loan workout officer. MILFORD NATIONAL BANK – Hires Daniel Devine, senior vice president and chief financial officer. MONSON SAVINGS BANK – Promotes Steven E. Lowell, president and CEO; John

Hibbard, controller, and Michele Ouhl, assistant branch manager. NEEDHAM BANK – Hires Barry Whittaker, senior vice president. NEWBURYPORT FIVE CENTS SAVINGS BANK – Promotes Janice Morse, president and CEO; Marc MacBurnie, executive vice president; Scott Eaton, senior vice president; Kimberley Foulkes, senior vice president; Susan Ballard and Karen Baptiste, vice presidents; Peter Matthews, assistant vice president; and Timothy Felter, vice president and treasurer. NUVO BANK & TRUST COMPANY – Hires Leslie Ross Lawrence, senior vice president and chief credit officer. PEOPLES BANK – Hires Michael Oleksak, executive vice president, and JoMaria Velez, mortgage consultant.

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

OntheMove Michael Lindberg

Garth O’Leary

Mark Gibson

Scott Virzi

Cheryl Santee

J.T. Kelley

Timothy O’Leary

Peter St. George

Kimberly Stoyle

Archana Pradhan

Rodney Scott

John Morrell

Stephany Hutchinson

Jacqueline Dawe

ROCKLAND TRUST COMPANY – Hires Michael Lindberg, first vice president and commercial lending center manager; Garth O’Leary, assistant vice president, investment management group operations and compliance specialist; Mark Gibson, chief marketing officer; Scott Virzi, commercial lending officer; and Cheryl Santee, branch manager.

ROLLSTONE BANK & TRUST – Hires J.T. Kelley, senior vice president and team leader; Timothy O’Leary, mortgage originator; and Peter St. George and Matthew Smith, wealth management division. SAVERS BANK – Promotes Joseph A. Coderre, president.

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M. Susan Elliott on being honored with The Warren Group’s 2011 Women of FIRE Award

SOUTH SHORE SAVINGS BANK – Hires Kimberly Stoyle, vice president and controller. SOVEREIGN BANK – Hires Jorge Moran, president and CEO. STONEHAMBANK – Promotes Kerry Aponas, vice president; Tricia MartinsSousa, Jody Goodwin, Ryan Kelly and Ben Craigie, assistant vice presidents; and Thomas Marshall and Erin McCarran, assistant treasurers. TD BANK – Promotes Archana Pradhan, commercial loan portfolio officer; Rodney Scott, senior vice president and senior credit officer; John Morrell and Gisella Caputi-Zawasky, store managers; Stephany Hutchinson, store sales and service manager; and Jacqueline Dawe, merchant service representative; hires James Healey, vice president and commercial loan officer; Christopher Vedro, vice president and portfolio manager; and Joshua Cormier, store manager. THE COMMUNITY BANK– Hires Thomas Landers, vice president and commercial loan officer, and Lawrence Pittman, vice president and team leader. THE VILLAGE BANK – Promotes Laura Tannous, branch manager. UNIBANK – Hires Christopher Watson, senior vice president and commercial loan officer.

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

James Healey

Christopher Vedro

Joshua Cormier

Thomas Landers

Lawrence Pittman,

Laura Tannous

Christopher Watson

Amy Ganci

Nicole Biggins

Simon Mzaouakk

Brian Westerlind

Georgeann Abatzis

Norma Brennan

Amy Timmerman

UNITED BANK – Hires Amy Ganci, commercial lending administration officer. WATERTOWN SAVINGS BANK – Promotes Nicole Biggins and William DiSciullo, vice presidents, and Simon Mzaouakk, assistant vice president.

WEBSTER FIVE CENTS SAVINGS BANK– Hires Brian Westerlind, senior vice president, chief financial officer/treasurer. WEYMOUTH BANK– Promotes Jacqueline MacBean and James Golden, vice presidents.

WINCHESTER SAVINGS BANK – Hires Georgeann Abatzis, director of internal audit; Norma Brennan, residential lending officer; and Amy Timmerman, director of marketing. n

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l 1-800-BANKERS Third Quarter 2011 n M a s s a c h u s e t t s B a n k e r

GoodNeighbors

BANK OF CANTON – Donates $5,000 to My Club of Assabet Valley; $6,000 to Communities Brother’s Keeper. for Restorative Justice; $5,000 to Danforth Museum of Art; $5,000 to Framingham State BERKSHIRE BANK – Awards a total of $36,000 University Foundation; $5,000 to John Andrew to 18 high school seniors; donates over $93,000 to Mazie Memorial Foundation; $5,000 to Morse Berkshire United Way. Institute Library; $8,500 to Natick Visiting Nurse Association; $5,000 to Programs for People; and BRISTOL COUNTRY SAVINGS BANK – $5,000 to Young Entrepreneurs Alliance. Donates $22,000 to Pawtucket School Department. MONSON SAVINGS BANK – Donates $5,000 to Monson Savings Bank Tornado Assistance Fund. CAMBRIDGE SAVINGS BANK – Donates $7,500 to Somerville Community Corporation; MUTUAL BANK – Donates $1,500 to Carver $15,000 to the Arlington Boys & Girls Club’s Music Boosters Summer Concert Series; $8,200 Capital Campaign; $5,000 to Margaret Fuller in scholarships to local high school organizaNeighborhood House; and $15,000 to Cambridge tions; $10,000 to the American Cancer Society Family YMCA. Relay for Life; $1,000 St. Vincent DePaul Golf Tournament; and $1,000 to Halifax Youth and MIDDLESEX SAVINGS BANK – Donates Recreation Holiday Egg Hunt. $15,000 to Boys & Girls Club of Metrowest; $15,000 to Domestic Violence Services ROCKLAND TRUST COMPANY – Donates Network; $12,000 to Homeowner Options $1,000 to Medfield WWII Plaque Project. for Massachusetts Elders; $10,000 to Catholic Charities of Boston; $10,000 to Lovelane Special UNITED BANK – Donates $83,500 to organiNeeds Horseback Riding Program; $10,000 to zations and initiatives designed to benefit chilVirginia Thurston Healing Garden; $10,000 dren, families, students and schools in the greater to Habitat for Humanity of Greater Lowell; Springfield and Worcester regions. $10,000 to Partakers, Inc.; $6,500 to Caritas Communities; $7,000 to Junior Achievement WALPOLE CO-OPERATIVE BANK – Donates of Eastern Massachusetts; $8,000 to MetroWest $6,000 to Friends of the Walpole Council on Free Medical Program; $5,000 to Natick Aging. Community Organic Farm; $8,000 to The Food Project, Inc.; $6,500 to The Nature Connection; WATERTOWN SAVINGS BANK – Donates $9,000 to A Place to Turn; $5,000 to Boys & Girls $50,000 to 34 local organizations.

BAY STATE SAVINGS BANK awards scholarships to nine area class of 2011 high school students, totaling $8,000. Pictured, from left: Daniel Mercurio, South High School; Joshua Sundquist, Worcester Technical High School; Kathy Nguyen, North High School; Sarah Buabeng, Doherty High School; and Wesley Chow, University Park Campus School, receive congratulations from Bay State Savings Bank President and CEO Robert J. Lewis, far right.

ROCKLAND TRUST’s Chief Financial Officer Denis Sheahan (left) presents a $4,000 check to Vincent Marturano, president and CEO, Old Colony YMCA, to support its 2011 Strong Kids Campaign.

EAGLE BANK donates $10,000 to Housing Families, Inc. to support its many programs for families in need. Pictured, from left: Christine Falzarano, vice president, Eagle Bank; Jim Goebelbecker, CEO, Housing Families Inc.; Heather Wetterneck, assistant vice president and CRA officer, Eagle Bank; and Michael Falvey, vice president of commercial lending, Eagle Bank and Housing Families, Inc. board member.

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

CAMBRIDGE SAVINGS BANK – Donates $5,000 to Food for Free to assist with the expansion of their Produce Rescue and Home Delivery Programs. Pictured, from left: Brian Axelrod, intern, and Dann Friedman, driver, Food For Free; Greg Bowe, vice president and regional sales manager, and Robert M. Wilson, president and CEO, Cambridge Savings Bank; Peggy Kutcher, board president, and David Leslie, executive director, Food For Free; Susan Lapierre, senior vice president of community relations and CRA officer, Cambridge Savings Bank.

THE PROVIDENT BANK donates $50,000 to Amesbury Council on Aging to fund the new senior center’s capital campaign. Pictured, from left: Charlie Cullen, president and CEO, The Provident Bank; Betty Dion, president, Friends of the Amesbury Council on Aging; and David Hildt, chairman of the Friends’ Capital Campaign.

CAMBRIDGE SAVINGS BANK – Donates $7,500 to Cambridge Community Center to support its safe and structured afterschool and summer programs for youth ages 4 ½ to 13 years old from Cambridge, Somerville, Boston and surrounding communities. Pictured, from left: Michael Kuhn, vice president of commercial lending, Cambridge Savings Bank; David Gibbs, executive director, Cambridge Community Center; Robert M. Wilson, president and CEO, and Susan Lapierre, senior vice president of community relations and CRA officer, Cambridge Savings Bank.

ROLLSTONE BANK’s Executive Vice President Linda Racine (left) presents a check in the amount of $25,000 to Lisa Piehler, CEO, American Red Cross of Central Massachusetts, to support its local chapter in providing training in various health fields.

MECHANICS COOPERATIVE BANK’s President and CEO Joseph Baptista Jr. (right) presents a check in the amount of $300,000 to Keith Hovan, Southcoast Centers for Cancer Care, to support its state-of-the-art therapy and high quality care for cancer patients and their families.

COMMERCE BANK donates $5,000 to the Worcester Tree Initiative to support its mission of reforesting the city of Worcester and surrounding communities by planting 30,000 trees to replace those destroyed by the Asian Longhorn Beetle. Pictured, from left: Commerce Bank President and CEO Brian Thompson; Worcester Tree Initiative Coordinator Peggy Middaugh; Worcester Chief Forester Brian Breveleri; Worcester Mayor Joseph O’Brien and Rep. James O’Day.

CAMBRIDGE SAVINGS BANK – Donates $20,000 to Newton Community Pride to sponsor its NewtonSERVES program, a day of community service throughout the city, including cleaning parks, planting gardens, building and painting school bookshelves, cleaning non-profit organizations and helping senior citizens. Pictured, from left: Ruth Barnett, vice president, Cambridge Savings Bank, and president, Newton Community Pride; Mayor Setti D. Warren; Robert M. Wilson, president and CEO, Cambridge Savings Bank; and Susan Lapierre, senior vice president of community relations and CRA officer, Cambridge Savings Bank.

BAY STATE SAVINGS BANK – Donates $5,000 to BeLikeBrit Foundation to assist in building an orphanage in Haiti in memory of Britney Gengel, who died in the 2010 earthquake. Pictured, from left: Paul Gilbody, executive vice president and chief operating officer; Diane Giampa, senior vice president and director of human resources and marketing; Cherylann Gengel, representing BeLikeBrit; George F. Sullivan Jr., CEO, Sullivan, Garrity & Donnelly Insurance Agency, Inc. and chairman of the board, Bay State Savings Bank; and Kathy Dicicco, representing BeLikeBrit.

ROLLSTONE BANK AND TRUST – Donates $1,000 to the Fitchburg Police Department’s RAD program to help provide self defense classes for women and a safety and empowerment program for children. Pictured, from left: Fitchburg Deputy Chief of Police Philip Kearns; Martin F. Connors Jr., president and CEO, Rollstone Bank and Trust; Officer Shelbie Hertel; Chief Robert DeMoura.

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For more information on partnering with MassHousing, contact Peter Milewski at 617.854.1060 or visit wwww.masshousing.com. Third Quarter 2011 n M a s s a c h u s e t t s B a n k e r

GoodNeighbors continued from page 27

CAMBRIDGE SAVINGS BANK – Donates $7,500 to Cambridge Neighborhood Apartment Housing Services (CNAHS) to support the Individual Development Account (IDA) and financial literacy programs for the residents of their affordable housing developments. Pictured, from left: Susan Lapierre, senior vice president of community relations and CRA officer, and Douglas Faithfull, executive vice president and chief lending officer, Cambridge Savings Bank; Peter Daly, executive director, CNAHS; Robert M. Wilson, president and CEO, Cambridge Savings Bank; Hilary Smith, resident service coordinator, CNAHS.

NEEDHAM BANK – Donates $5,000 to the town of Dedham to help offset the cost of sending a delegation of community members, the Dedham High School Bank and Dedham Youth Commission, to Kansas City, Mo., for the All-America City Award, where they will compete with 25 other finalists from across the country for this prestigious national award. Pictured, from left: Karen O’Connell, economic development director; Virginia LeClair, environmental coordinator, town of Dedham; Mark Whelan, COO, Needham Bank; William Keegan, town administrator, town of Dedham; Michelle DeSimone, branch manager, Needham Bank; Nancy Baker, assistant town administrator; David Field, director of engineering, town of Dedham and Greg Agnew, All-America delegate.

MECHANICS COOPERATIVE BANK – Donates $3,880 to The 2011 YMCA Strong Kids Campaign to provide financial assistance to thousands families through YMCA memberships, child care, camp programs, recreation programs, teem programs and other special needs programs. Pictured, from left: Meghan Connolly, commercial lending executive assistant; Sharon Levy, loan servicing representative; Wendy Fraser, assistant vice president loan servicing manager; Nancy Stokes, senior vice president and senior lending officer; Maria Camara, collections manager; and Diane Aguiar, loan officer. n

Proven Commitment

to serving Massachusetts financial institutions Stifel, Nicolaus & Company, Incorporated has been serving banks and thrifts for over 40 years. Since 2000: • Managed 491 Public and Private Offerings, raising $68.0 billion in capital • Managed 49 Mutual-to-Stock Conversion Offerings, raising $13.7 billion in capital • Advised in 222 Financial Advisory Transactions, totaling $14.8 billion Over 220 Financial Service Companies under research coverage Large retail and institutional sales distribution channel

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

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

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

Michael F. Barry, Managing Director (212) 847-6458 • barrym@stifel.com Mark B. Cohen, Managing Director (212) 847-6438 • mark.cohen@stifel.com Robin P. Suskind, Managing Director (973) 549-4036 • robin.suskind@stifel.com

member sipc and nyse | www.stifel.com

Legislative Review continued from page 10

(QRM) provisions of the DFA, which mandates the creation of a residential mortgage product with up to a mandatory 20 percent down payment. The intent is understandable in the wake of the recent housing market turmoil, but many fear that imposing too strict a minimum down payment may create an entrance barrier too high for home ownership and further exacerbate the stagnant housing markets. Banks are also concerned with Securities and Exchange Commission (SEC) proposals to impose significant new restrictions on banks that offer municipal deposits by requiring them to register with and be subject to the Municipal Securities Regulatory Board (MSRB). Many banks that only serve a few local communities may well find that the burden of compliance would force them to discontinue those services, a loss to those local municipalities. The Department of Labor is considering a proposed rule under the Employee Retirement Income Security Act (ERISA) that, upon adoption, would protect beneficiaries of pension plans and individual retirement accounts by more broadly defining the circumstances under which a person is considered to be a “fiduciary” by reason of giving investment advice to an employee benefit plan or a plan’s participants. These are just a few of the major issues facing our banks, our political and business leaders this summer. A few steps forward, a couple sideways and one or two backwards. Enjoy the summer. n David Floreen is senior vice president at the MBA. He can reached at dfloreen@massbankers.org. Massachusetts Bankers Association E-News ADVERTISING

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

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

August 22 31

Lending Basics for Support Personnel Webinar Safe Deposit Workshop Marriott Courtyard Hotel, Marlborough

September 7 12-16 21-23 28 29

Emerging Leaders Session II: Leaders in Advocacy Marriott Courtyard Hotel, Marlborough Annual Bank Compliance Academy Marriott Courtyard Hotel, Marlborough New England Conference The Mount Washington Resort, Bretton Woods, NH Deposit Account Workshop Wakefield Sheraton Hotel Integrating Video into Your Bank Marketing, PR, Customer Communications and Community Affairs Courtyard Hotel, Marlborough

October 4 4-5 6 7

Corporate Governance Marriott Courtyard Hotel, Marlborough IRA School Marriott Courtyard Hotel, Marlborough CFO Conference Wylie Inn & Conference Center, Beverly Professional Development Forums for Senior Mortgage Lenders Middlesex Savings Bank Training Center, Westborough

11 12 13-14 14 17-21 20 26

Professional Liability and Fidelity Insurance Basics Webinar IT Audit Workshop Session II Marriott Courtyard Hotel, Marlborough Advanced School of Commercial Lending Sheraton Hotel Framingham Professional Development Forums for Senior Mortgage Lenders Middlesex Savings Bank Training School of Commercial Lending Sheraton Hotel Framingham Annual Security Seminar Marriott Courtyard Hotel, Marlborough Deposit Account Workshop Holiday Inn, Mansfield

November 4 10 16 16-17 18

CFO Forum Middlesex Bank Training Center, Westborough CFO Forum Middlesex Bank Training Center, Westborough Emerging Leaders Session III Marriott Courtyard Hotel, Marlborough Annual Two-Day BSA Workshop Doubletree Hotel, Westborough CFO Forum Middlesex Bank Training Center, Westborough

December 2

Annual New England Trust and Wealth Management Conference & Exhibit Sheraton Hotel Framingham

Event Spotlight: September 21-23

New England Conference

The Mount Washington Resort, Bretton Woods, NH

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

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American Bankers Association..................25 www.aba.com

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Federal Home Loan Bank of Boston...........9 www.fhlbboston.com

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G.T. Reilly & Company................................24 www.gtreilly.com

GraVoc Associates, Inc................................29 www.gravoc.com

Hooker & Holcombe....................................19 www.hhconsultants.com

Integrated Security Group...........................11 www.isgsecurity.com

Karam Financial Group...............................21 www.karamfg.com

Magee Company...........................................19 www.mageecompany.com

MassHousing.................................................27 www.masshousing.com

Nutter, McClennen & Fish...........................18 www.nutter.com

Pierce Atwood LLP........................................7 www.pierceatwood.com

Stifel Nicolaus...............................................28 www.stifel.com

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