Rick Bennett, President and CEO, Marlborough Savings Bank
Photo/Emily Micucci
Marlborough Savings Bank President and CEO Rick Bennett has witnessed the evolution of the local banking world over nearly 40 years, a world he said will continue to transform under mounting regulatory and financial pressure.
A Stow resident who has led Marlborough Savings since 2001, Bennett is also chairman of the board for Marlborough Hospital and serves as a trustee for its parent, UMass Memorial Health Care in Worcester.
Bennett discussed the continued contraction of community banks, including the outlook for his, in a recent interview with MetroWest495 Biz.
How did you get into this business?
I got into banking accidentally. My undergraduate degree was in criminal justice. And when I graduated it was right at the end of the Vietnam War. A lot of the vets that were coming home (were given priority in hiring), and rightly so. So I took a job as a temporary collector at Shawmut Bank in Framingham. I figured it would be a temporary thing until things freed up at the state or federal level, which is what I was interested in from a criminal justice standpoint. That was in 1975.
Clearly, you liked it.
I did like it. I enjoyed it and I soon moved from there to a branch environment and learned the credit side of banking.
What are the greatest challenges community banks face today?
There's a number of challenges. Certainly, the interest rate environment has caused a lot of banks to see shrinking margins … The other major challenges (include) the increased regulation. It's creating a tremendous expense. So you combine the shrinking margins, which is obviously affecting our revenue, with the added expense associated with the regulatory environment … and the cost of new technology.
There's also a cost associated with attracting and retaining new talent, and it's a very competitive environment. It's not just your other community banks or the large banks. There's a lot of non-bank competition and mortgage companies. There's concern with Apple and Google and Wal-Mart – huge companies that are trying to get into the financial arena. And in this (area), we have some very aggressive credit unions.
Many local banks have merged out of necessity in recent years. Is Marlborough Savings considering such a move?
We're keeping our eyes on what's going on as the challenges become greater, especially as it pertains to the regulatory environment and technology. We're always keeping an open mind to those opportunities, especially if a smaller bank needs assistance. We're in a pretty good position. We've done well over the years … but you just never know.
I think you're going to continue to see mergers and acquisitions or banks going public, and then three to five years after going public, you may see them either being acquired or acquiring another organization.
Will Marlborough Savings consider going public?
It's not something that we have on the drawing board at this point in time. There are a lot of banks looking at that. Again, it gets back to the challenges facing community banks. If you need to raise capital to acquire another bank or to do some other type of investment, then that's a good way of raising capital.
What are your greatest advantages compared with large regional and national banks?
I've been able to surround myself with very good talent and create a team environment and culture where everyone is engaged and feels important. They feel if they see opportunities, ways we can improve (our productivity) — everyone is involved. That transcends to great customer service. I think that's the advantage of a community bank.
And I think community banks tend to focus on doing the right thing; doing right by their employees, doing right by their customers, doing right by the community. Although it's getting a little more challenging, we try to make decisions a little longer term and not necessarily focus on quarter to quarter. And many of the banks in Massachusetts have that stability and long-term commitment to the community.
What is your biggest growth area in business lending?
We've still done an awful lot of commercial mortgages, people buying buildings for their own businesses. There have been a lot of investors acquiring property. We still are heavily involved in commercial real estate mortgages. We've done a lot of development — residential developments, whether it's condos or single-family homes. We still see businesses looking for business lines of credit to help with receivables financing and inventory. n
This interview was edited for length and conducted by Emily Micucci.
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