Banking On Community Involvement | Investing in small businesses - and the city of Worcester - drives Commerce Bank
There aren’t many banks in Worcester that have the longtime presence of Commerce Bank and Trust Co.
Just drive past the restored Foley Stadium on Chandler Street that bears the bank’s name after a $1-million donation in 2007. Or, gaze up at the 10-story downtown Slater Building, the bank’s longtime headquarters, which it purchased in October for more than $4 million.
Or talk to the numerous charities the bank supports with financial donations and volunteer help each year.
“They are one of the most outstanding companies for community involvement,” said Timothy Garvin, CEO and president of the United Way of Central Massachusetts.
Commerce employees donated and pledged nearly $75,000 to the charity last year, he said. Commerce received the United Way’s highest honor in 2009, the Stoddard Award, for its level of support.
Growth In Deposts, Loans
And during 2011, a year with mixed economic results that saw the reputations of many of the nation’s bigger banks nosedive, Commerce doubled down on its commitment to the region and grew its deposits and loans at above-average rates.
Brian Thompson, Commerce’s president and CEO, said it was crucial to the bank to solidify its presence downtown, where it has been a player in the local banking sector since 1955. That’s why it decided to buy the Slater Building, just down the street from City Hall.
“Even though we might have gone to the outskirts of Worcester and still been in Worcester, we think being in the center of our city is important,” Thompson said.
Downtown Dedication
The bank plans to renovate both the exterior and interior of the historic building in the coming year, revitalizing the lobby, installing new windows and a new heating and ventilation system.
Thompson said good things are happening in Worcester — from the CitySquare development to major construction projects at three of its colleges — and Commerce wants to play its role in the city’s future.
City Manager Michael V. O’Brien praised the bank when the deal was announced.
“The positives from this decision — from their permanent presence downtown, to their expected reinvestment in this historic building, to their future growth here — all will be felt for decades,” O’Brien said.
Many bankers across the country will probably not look back at the past few years with particular fondness. But balance sheets have improved overall, according to the Federal Deposit Insurance Corp., which regulates banks
In the past year, Commerce boosted its loan portfolio by $120 million, or 18.5 percent, and grew deposits by $102 million, or 14.5 percent. The bank holds $128 million in capital and has been the most active Small Business Administration lender in Worcester County for the past two years.
“I think the key to our success has always been our ability to manage risk,” Thompson said. “You do that through good people.
Crediting Ownership, Staff
Thompson gives credit to bank employees ranging from the tellers to majority owner David “Duddie” Massad, who purchased the bank in the 1990s when it was struggling.
Without that investment, it’s possible Commerce would have been swallowed up like so many other banks during that era.
But instead, the bank is thriving, and Thompson gives special credit to Massad’s leadership.
“He is motivated to have us be better every day, to be a bigger and better bank for our community, but not motivated by wanting to cash it in, you know, collect his chips and move on,” he said. “He could do that any day. There are plenty of people who would find Commerce attractive.”
Unique Lines
Commerce has also supplemented its profits through some rather unique business lines.
It’s one of the larger processors of automated clearing house (ACH) payments in the country. Payroll companies wire several billion dollars each month to Commerce, which routes the money to various accounts specified by the workers who are signed up for direct deposit through their employers.
“We could have on a Thursday night, $300 million to $400 million in deposits that go out the next morning,” Thompson said.
The bank also has a $130-million loan portfolio for light aircraft loans and a $50-million loan portfolio for classic cars.
“These other businesses don’t make your bank,” Thompson said. “What they do is kind of supplement your bank.”
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