Monday, May 26, 2008
Local banks compete
At the Colonial Theatre one night last January, rock 'n' roll was pumping up a full-house audience of bankers when their leader swooped in from a third-floor balcony above, stage right.
Michael P. Daly, president and CEO of Berkshire Bank, was airborne, flying in banker attire, with arms stretched forth, as he floated in for a touch-down on stage.
He straightened his red tie. He unfolded black Aviator sunglasses. His hair-loss-be-damned shaved head gleamed in the lights.
The Vin Diesel of banking had landed.
It was the sixth annual Berkshire Family Gathering for Berkshire Bank employees, and it was being held at the Colonial, a downtown theater revival gem completed with hefty fiscal backing from Berkshire Bank itself.
"We are not bankers!" Daly blazed out to the crowd, launching into a motivational message. "We are family!"
A bank that answers to stockholders, he insisted, can put employees first, customers first, community first, and can deliver profits. A bank can work from the inside out, he said.
Daly, 46, is an intensely competitive man who plays on an amateur ice hockey team. He fights his receding hairline with a razor, and he
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is a man for whom building the county's most muscular bank is not enough.
That night at the Colonial, his message had big numbers behind it: Berkshire Bank counted a record $20.8 million in revenues in 2007 and had assets of $2.5 billion, a 17 percent increase from the previous year after an expansion into Southern Vermont.
In those numbers, Berkshire Bank is comfortably ahead of the key county-based competition, in great part due to Berkshire Bank's commercial banking strength and its stretch into three adjacent counties and two other states.
In other measures of banking, however — such as the $1.27 billion mortgage market tallied in Berkshire County last year — Daly watches the competition's moves almost every day: Berkshire Bank, Legacy Banks and Greylock Federal Credit Union hold approximately 40 percent of that business, with Greylock declaring the edge.
The big three also compete with seven other nonpublic banks anchored in Berkshire County, so with 10 financial institutions and a shrinking population in the county, the race is on for home loans, car loans, checking accounts and retirement wealth.
Legacy and Berkshire, the two publicly traded banks of disparate size, have ventured into New York's Capital Region with new branches. Berkshire Bank also has expanded into Vermont and neighboring eastward counties in Massachusetts, establishing new branches and insurance companies.
And both banks are eyeing northwestern Connecticut.
Legacy Banks, which maintains a solid standing despite 14 layoffs in December, noted in its 2007 annual report that it faces "direct competition from a number of financial institutions within Berkshire County, many with a statewide, regional or national presence."
"It's fiercely competitive," said Elizabeth Mach, vice president of marketing at Berkshire Bank, which launched its "America's Most Exciting Bank" marketing brand last year, paying handsomely for rights to the Pointer Sisters' 1980s hit song, "I'm So Excited."
Marketing and customer service are the skirmish grounds in which each institution contends it best meets the needs of employees and customers. Each aims to capture all of a customer's banking business, with incentives and deals for people who "bundle" all their accounts at one bank.
"An old adage is, your present customer is your best customer," said J. Williar Dunlaevy, CEO and president of Legacy Banks, whose demeanor is more of a sage, experienced uncle than of a flying superhero. "The challenge in this market is that if we get a new customer, for the most part we have to take one away from someone else. There's not a lot of 'new' business."
Legacy reported asset growth of 14 percent last year, up to $924.5 million, but spent $1.5 million in severance pay and buyouts with the 14 layoffs, resulting in a 55 percent income loss for the year. Still, the Legacy Banks Foundation gave $453,000 to 143 area organizations.
The employee losses were painful for Dunlaevy, who said they were an overdue response to the efficiencies brought about largely by modern banking business technology. Daly, meanwhile, described Legacy's challenge as surmountable.
"(Dunlaevy) has made great progress, and we see him as a stiff competitor," Daly said.
Legacy last year opened two new branches in the Berkshires, and some offices offer Sunday hours with a coffee bar, Internet access and a paper shredder for customer papers. Legacy also has two more offices in the works in the Albany area.
In the race for dominance, Berkshire Bank wins easily in overall numbers, boosted most by its commercial loan power: The bank has $660 million in commercial loans producing income every month.
In the race for prominence, however, it's tight among Berkshire Bank, Legacy (2007 assets: $924.5 million) and Greylock ($987.9 million), whose 150 percent growth in "membership" since 1995 has figured into the banks' efforts to retool their consumer focus.
"We're in a position at Greylock to handle much more credit than the banks, and our tax-exempt status helps us," said Angelo C. Stracuzzi, Greylock's president and CEO. "We are consumer-oriented; that's our forte."
"Angelo brings out the best in us," Daly said, adding that, "The better competitors (Legacy and Greylock) are, the better we perform."
But the competition goes way beyond the county borders: Mortgages now can be bought with a click in cyberspace, which poses an invisible virtual challenge for the locals.
The Warren Group of Boston, which tracks New England real estate business, offers one industry measure of market share, and it shows how much business the 10 Berkshire-based banks stand to gain if they could lure those who borrow from outside of the county.
According to an analysis of 190 lenders that have a piece of the county's 2007 mortgage business — new property purchases, home equity lending, refinancing — $1.12 billion in new lending was recorded in county registries. About half that money came from lenders outside of the region.
Greylock's new-purchase mortgages topped the list at $69.6 million, followed by Berkshire Bank at $40.2 million and Legacy at $35 million. Greylock wins, with 16.4 percent of the market share.
In home equity and refinancing, Berkshire Bank had $129 million of the business, with Greylock second at $115 million and Legacy third at $97 million.
The Warren Group data is drawn from the Berkshire County registries of deeds and doesn't include bankwide lending information.
In overall mortgage lending among 190 loan-makers, Greylock's business comprised 16.4 percent of the market share, while Berkshire Bank was at 15 percent and Legacy at 11.7.
Greylock's numbers are boosted by easier credit, an aggressive first-time homebuyer program, and lots of lower-cost loans.
Regarding Greylock's dominance in home mortgages, Daly said he was unconcerned.
"Sometimes we strive to be number one in almost every area, and sometimes there are reasons to be number two or three," he said. "And it might come down to credit scores."
Stracuzzi, a former Pittsfield city councilor who worked in traditional local banks for 15 years, has championed the cause of his credit union members, whose ranks have grown from 20,000 — originally GE employees and their families — to more than 62,000 today.
He has been a steady foot soldier in selling Greylock as a kinder, gentler institution when it comes to credit scores and life's hard knocks. He often moves about town, meeting with customers or seeing to it quietly that Girls' Inc. secures a new $5,000 roof.
Greylock was named the top credit union in the United States last year by Callahan Associates, an industry organization that tracks credit union performance.
Mike Shafir, an analyst with the Sterne Agee brokerage firm, said credit unions can have a big impact in the retail banking marketplace, but they also carry higher-risk loans and mortgages on their books.
Greylock's assets are "certainly quite sizable," Shafir said.
But the credit union's charter confines it to the county, so it has gone full-speed ahead in local marketing of its key products: car loans and mortgages. Greylock also has diversified — opening insurance offices last year — and is developing an advertising and marketing company.
Its growth reflects a broader clientele: Greylock takes more comers, people whose credit scores might not meet the tightening standards of traditional banks. Some new borrowers are people who have ditched their subprime loans, according to John Bissell, Greylock's senior vice president for marketing.
Stracuzzi, 59, who built his professional base in part as Pittsfield's longest-serving city councilor and longtime conventional banker, said Greylock's strength is its capacity to bend.
"We say, 'Come and talk to us,' " he said. "People have glitches in their lives, and you have to listen to people. We can help that single mom with three kids more easily than some of the other banks."
Daly bristles about Stracuzzi's working-class mantras: The Berkshire Bank CEO also grew up in Pittsfield, once serving as a gravedigger at St. Joseph's Cemetery while in college. His dad, meanwhile, was a Sears service manager.
"I'm a blue-collar guy, too, in a white shirt," Daly said.
But the guy in the white shirt is what Stracuzzi calls "the big gorilla" in commercial lending.
Greylock has left that area to the bigger banks, but Legacy's Dunlaevy said he has made strides and would like to cut into Berkshire Bank's dominance there.
Legacy's commercial lending is growing steadily, especially in New York state, and now comprises 32 percent of the bank's lending portfolio, more than double its value since 2001, to about $239.8 million at the end of last year.
"We are rock solid, we are very consistent and focused on our customers, so we can help people reach their goals and dreams," Dunlaevy said. "We are always looking for pockets of growth and areas to expire before our competitors."
Among smaller banks in the Berkshires, each is showing growth in assets and lending. One in particular — South Adams Savings Bank — opened a Lee branch last year, where the big three have busy branches and the venerable Lee Bank has operated for decades.
Charles O'Brien, president and CEO of South Adams Savings, said one thing is a near certainty in Berkshire County: Outside banks are unlikely to launch any takeover wars here. The former Bank of Boston, Fleet Bank and others have come and gone, as customer loyalty is solidly local, O'Brien said.
"This county is dominated by smaller banks, and their traits are very customer-friendly in terms of services and rates," said O'Brien, whose bank had $662,000 in net earnings last year, and $200 million in assets. "That makes it difficult for larger banks to make inroads here."
For all of their competitive efforts, however, area banks also are collaborators: Legacy, Berkshire and Pittsfield Cooperative Bank have teamed to finance two major downtown development projects: the Beacon Cinema development and the Barrington Stage Company capital project.
"What I find most interesting is their undying commitment to the community of Pittsfield and their willingness to work together on community development projects to ensure their success," said Pittsfield Mayor James M. Ruberto. "They make it easy for this office to approach them with ideas and requests."
Berkshire Bank gave away more than $1.6 million in philanthropic money to organizations of all stripes last year, mostly in Berkshire County.
Sean Gray, the bank's senior vice president for retail banking, said the institution's community involvement is unlike what he experienced at national banks where he worked.
Daly is competitive, Gray said, "but you have to be."
"It's hardly a bunch of stuffy bankers sitting around a conference table," said Gray, who recently took some managers to Clapp Park for a lesson on a new home-equity loan product and some three-legged races.
Daly said the 100-mile radius around Pittsfield is now Berkshire Bank turf.
And he's so excited.
"We're feeling good, we're energized, and we're going to be creative and have service standards that are the best," he said. "There are no limitations; there's excitement on Wall Street. We have a 'buy' rating from every analyst."
But it's a jungle out there.
"We find the situation very, very competitive, and we think it will remain that way, so it's a challenge," said Paul Merlino, the 32-year president of tiny Lenox National Bank, a smaller, traditional bank just now creating a Web site. "People are jumping from bank to bank, depending on the special of the week, and they'll jump for an eighth of a percentage point.
At the Colonial Theatre one night last January, rock 'n' roll was pumping up a full-house audience of bankers when their leader swooped in from a third-floor balcony above, stage right.
Michael P. Daly, president and CEO of Berkshire Bank, was airborne, flying in banker attire, with arms stretched forth, as he floated in for a touch-down on stage.
He straightened his red tie. He unfolded black Aviator sunglasses. His hair-loss-be-damned shaved head gleamed in the lights.
The Vin Diesel of banking had landed.
It was the sixth annual Berkshire Family Gathering for Berkshire Bank employees, and it was being held at the Colonial, a downtown theater revival gem completed with hefty fiscal backing from Berkshire Bank itself.
"We are not bankers!" Daly blazed out to the crowd, launching into a motivational message. "We are family!"
A bank that answers to stockholders, he insisted, can put employees first, customers first, community first, and can deliver profits. A bank can work from the inside out, he said.
Daly, 46, is an intensely competitive man who plays on an amateur ice hockey team. He fights his receding hairline with a razor, and he
Advertisement
is a man for whom building the county's most muscular bank is not enough.
That night at the Colonial, his message had big numbers behind it: Berkshire Bank counted a record $20.8 million in revenues in 2007 and had assets of $2.5 billion, a 17 percent increase from the previous year after an expansion into Southern Vermont.
In those numbers, Berkshire Bank is comfortably ahead of the key county-based competition, in great part due to Berkshire Bank's commercial banking strength and its stretch into three adjacent counties and two other states.
In other measures of banking, however — such as the $1.27 billion mortgage market tallied in Berkshire County last year — Daly watches the competition's moves almost every day: Berkshire Bank, Legacy Banks and Greylock Federal Credit Union hold approximately 40 percent of that business, with Greylock declaring the edge.
The big three also compete with seven other nonpublic banks anchored in Berkshire County, so with 10 financial institutions and a shrinking population in the county, the race is on for home loans, car loans, checking accounts and retirement wealth.
Legacy and Berkshire, the two publicly traded banks of disparate size, have ventured into New York's Capital Region with new branches. Berkshire Bank also has expanded into Vermont and neighboring eastward counties in Massachusetts, establishing new branches and insurance companies.
And both banks are eyeing northwestern Connecticut.
Legacy Banks, which maintains a solid standing despite 14 layoffs in December, noted in its 2007 annual report that it faces "direct competition from a number of financial institutions within Berkshire County, many with a statewide, regional or national presence."
"It's fiercely competitive," said Elizabeth Mach, vice president of marketing at Berkshire Bank, which launched its "America's Most Exciting Bank" marketing brand last year, paying handsomely for rights to the Pointer Sisters' 1980s hit song, "I'm So Excited."
Marketing and customer service are the skirmish grounds in which each institution contends it best meets the needs of employees and customers. Each aims to capture all of a customer's banking business, with incentives and deals for people who "bundle" all their accounts at one bank.
"An old adage is, your present customer is your best customer," said J. Williar Dunlaevy, CEO and president of Legacy Banks, whose demeanor is more of a sage, experienced uncle than of a flying superhero. "The challenge in this market is that if we get a new customer, for the most part we have to take one away from someone else. There's not a lot of 'new' business."
Legacy reported asset growth of 14 percent last year, up to $924.5 million, but spent $1.5 million in severance pay and buyouts with the 14 layoffs, resulting in a 55 percent income loss for the year. Still, the Legacy Banks Foundation gave $453,000 to 143 area organizations.
The employee losses were painful for Dunlaevy, who said they were an overdue response to the efficiencies brought about largely by modern banking business technology. Daly, meanwhile, described Legacy's challenge as surmountable.
"(Dunlaevy) has made great progress, and we see him as a stiff competitor," Daly said.
Legacy last year opened two new branches in the Berkshires, and some offices offer Sunday hours with a coffee bar, Internet access and a paper shredder for customer papers. Legacy also has two more offices in the works in the Albany area.
In the race for dominance, Berkshire Bank wins easily in overall numbers, boosted most by its commercial loan power: The bank has $660 million in commercial loans producing income every month.
In the race for prominence, however, it's tight among Berkshire Bank, Legacy (2007 assets: $924.5 million) and Greylock ($987.9 million), whose 150 percent growth in "membership" since 1995 has figured into the banks' efforts to retool their consumer focus.
"We're in a position at Greylock to handle much more credit than the banks, and our tax-exempt status helps us," said Angelo C. Stracuzzi, Greylock's president and CEO. "We are consumer-oriented; that's our forte."
"Angelo brings out the best in us," Daly said, adding that, "The better competitors (Legacy and Greylock) are, the better we perform."
But the competition goes way beyond the county borders: Mortgages now can be bought with a click in cyberspace, which poses an invisible virtual challenge for the locals.
The Warren Group of Boston, which tracks New England real estate business, offers one industry measure of market share, and it shows how much business the 10 Berkshire-based banks stand to gain if they could lure those who borrow from outside of the county.
According to an analysis of 190 lenders that have a piece of the county's 2007 mortgage business — new property purchases, home equity lending, refinancing — $1.12 billion in new lending was recorded in county registries. About half that money came from lenders outside of the region.
Greylock's new-purchase mortgages topped the list at $69.6 million, followed by Berkshire Bank at $40.2 million and Legacy at $35 million. Greylock wins, with 16.4 percent of the market share.
In home equity and refinancing, Berkshire Bank had $129 million of the business, with Greylock second at $115 million and Legacy third at $97 million.
The Warren Group data is drawn from the Berkshire County registries of deeds and doesn't include bankwide lending information.
In overall mortgage lending among 190 loan-makers, Greylock's business comprised 16.4 percent of the market share, while Berkshire Bank was at 15 percent and Legacy at 11.7.
Greylock's numbers are boosted by easier credit, an aggressive first-time homebuyer program, and lots of lower-cost loans.
Regarding Greylock's dominance in home mortgages, Daly said he was unconcerned.
"Sometimes we strive to be number one in almost every area, and sometimes there are reasons to be number two or three," he said. "And it might come down to credit scores."
Stracuzzi, a former Pittsfield city councilor who worked in traditional local banks for 15 years, has championed the cause of his credit union members, whose ranks have grown from 20,000 — originally GE employees and their families — to more than 62,000 today.
He has been a steady foot soldier in selling Greylock as a kinder, gentler institution when it comes to credit scores and life's hard knocks. He often moves about town, meeting with customers or seeing to it quietly that Girls' Inc. secures a new $5,000 roof.
Greylock was named the top credit union in the United States last year by Callahan Associates, an industry organization that tracks credit union performance.
Mike Shafir, an analyst with the Sterne Agee brokerage firm, said credit unions can have a big impact in the retail banking marketplace, but they also carry higher-risk loans and mortgages on their books.
Greylock's assets are "certainly quite sizable," Shafir said.
But the credit union's charter confines it to the county, so it has gone full-speed ahead in local marketing of its key products: car loans and mortgages. Greylock also has diversified — opening insurance offices last year — and is developing an advertising and marketing company.
Its growth reflects a broader clientele: Greylock takes more comers, people whose credit scores might not meet the tightening standards of traditional banks. Some new borrowers are people who have ditched their subprime loans, according to John Bissell, Greylock's senior vice president for marketing.
Stracuzzi, 59, who built his professional base in part as Pittsfield's longest-serving city councilor and longtime conventional banker, said Greylock's strength is its capacity to bend.
"We say, 'Come and talk to us,' " he said. "People have glitches in their lives, and you have to listen to people. We can help that single mom with three kids more easily than some of the other banks."
Daly bristles about Stracuzzi's working-class mantras: The Berkshire Bank CEO also grew up in Pittsfield, once serving as a gravedigger at St. Joseph's Cemetery while in college. His dad, meanwhile, was a Sears service manager.
"I'm a blue-collar guy, too, in a white shirt," Daly said.
But the guy in the white shirt is what Stracuzzi calls "the big gorilla" in commercial lending.
Greylock has left that area to the bigger banks, but Legacy's Dunlaevy said he has made strides and would like to cut into Berkshire Bank's dominance there.
Legacy's commercial lending is growing steadily, especially in New York state, and now comprises 32 percent of the bank's lending portfolio, more than double its value since 2001, to about $239.8 million at the end of last year.
"We are rock solid, we are very consistent and focused on our customers, so we can help people reach their goals and dreams," Dunlaevy said. "We are always looking for pockets of growth and areas to expire before our competitors."
Among smaller banks in the Berkshires, each is showing growth in assets and lending. One in particular — South Adams Savings Bank — opened a Lee branch last year, where the big three have busy branches and the venerable Lee Bank has operated for decades.
Charles O'Brien, president and CEO of South Adams Savings, said one thing is a near certainty in Berkshire County: Outside banks are unlikely to launch any takeover wars here. The former Bank of Boston, Fleet Bank and others have come and gone, as customer loyalty is solidly local, O'Brien said.
"This county is dominated by smaller banks, and their traits are very customer-friendly in terms of services and rates," said O'Brien, whose bank had $662,000 in net earnings last year, and $200 million in assets. "That makes it difficult for larger banks to make inroads here."
For all of their competitive efforts, however, area banks also are collaborators: Legacy, Berkshire and Pittsfield Cooperative Bank have teamed to finance two major downtown development projects: the Beacon Cinema development and the Barrington Stage Company capital project.
"What I find most interesting is their undying commitment to the community of Pittsfield and their willingness to work together on community development projects to ensure their success," said Pittsfield Mayor James M. Ruberto. "They make it easy for this office to approach them with ideas and requests."
Berkshire Bank gave away more than $1.6 million in philanthropic money to organizations of all stripes last year, mostly in Berkshire County.
Sean Gray, the bank's senior vice president for retail banking, said the institution's community involvement is unlike what he experienced at national banks where he worked.
Daly is competitive, Gray said, "but you have to be."
"It's hardly a bunch of stuffy bankers sitting around a conference table," said Gray, who recently took some managers to Clapp Park for a lesson on a new home-equity loan product and some three-legged races.
Daly said the 100-mile radius around Pittsfield is now Berkshire Bank turf.
And he's so excited.
"We're feeling good, we're energized, and we're going to be creative and have service standards that are the best," he said. "There are no limitations; there's excitement on Wall Street. We have a 'buy' rating from every analyst."
But it's a jungle out there.
"We find the situation very, very competitive, and we think it will remain that way, so it's a challenge," said Paul Merlino, the 32-year president of tiny Lenox National Bank, a smaller, traditional bank just now creating a Web site. "People are jumping from bank to bank, depending on the special of the week, and they'll jump for an eighth of a percentage point.
Saturday, May 10, 2008
Rural Missouri banks seek merger
Two small, rural Missouri banks, one with a branch in the Northland, want to merge.
The Lathrop Bank has applied with regulators to combine with Citizens Bank of Norborne, the Missouri Division of Finance reported Friday.
The surviving institution would be named Goppert Financial Bank and retain The Lathrop Bank's charter.
The Lathrop Bank, based in Lathrop in Clinton County, has a branch in Lawson in Clay County. The bank held $36 million in year-end 2007 assets.
Citizens Bank of Norborne's year-end 2007 assets were $27 million.
The banks are affiliated with Overland Park-based Goppert Financial Corp., which also owns four other rural banks, none in the Kansas City area.
