Sections Supplements

“Re-inventing the Bank”

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Jim Gardner and Jeff Sattler

Jim Gardner, left, and Jeff Sattler believe there is plenty of room for another bank in the region, and that the need will be even greater in the future with more anticipated mergers and acquisitions.

While conventional wisdom holds that the Pioneer Valley is already overbanked, with intense competition driving the yield curve to razor-thin margins, two area financial services veterans believe there is plenty of room for another player in the market. If all goes according to plan, Nuvo Bank & Trust Co. will open its doors in Tower Square this fall. The principals are sketchy with details, but they promise a bank that is customer-focused, progressive, and fun.

Jim Gardner believes he’s in the right place at the right time with the right concept.

But he also understands that some people in the banking industry would substitute the word wrong in each case. And he thinks they’re wrong.

“We heard it all while we were kicking the tires on this … how this region is already overbanked, and there’s so much competition, very little growth, and how the area simply doesn’t need another bank right now,” he told BusinessWest. “Well, this isn’t just another bank; it’s something new.”

That’s what the name of this venture, Nuvo Bank & Trust Co., would certainly indicate. It was conceptualized by Gardner, a former bank president and, most recently, president of the Polish National Credit Union in Chicopee; and Jeff Sattler, former senior vice president at TD Banknorth, who believe there is plenty of room for another bank in the Pioneer Valley. Especially one with the model they’re shaping — which puts the customer first.

“We’ve designed this bank to be inspired by the soul of the customer, which makes it different right out of the gate,” said Gardner, now serving as Nuvo’s chairman and chief executive officer. “We’re essentially re-inventing the bank.”


Well, for now, the two entrepreneurs will say only that their bank — to be physically located in the long-vacant bank branch within Tower Square — will be different, with its rough outline to be essentially colored in by customers, both commercial and retail. The institution won’t try to be all things to all people, but it will attempt to serve all generations and mindsets — from those who still enjoy going to the bank every week to those who haven’t stood in a teller’s line for years.

“Technology is driving the consumers’ options, and it’s allowing them to do their banking when they want to do it,” said Sattler, president and COO of the venture, who left a senior management position at a bank he greatly respects to take Nuvo to the marketplace. “We’re going to allow our customers to take full advantage of that technology.”

This facility, which now exists largely on paper in the partners’ collective imagination, is scheduled to open this fall. Much has to happen between now and then for the doors to open as planned, especially the raising of $15 million to $20 million needed to get the venture off the ground; a prospectus is due to be issued within a few weeks.

But Gardner and Sattler are confident not only that they will raise the money, but that their venture will be a colorful and successful addition to the region’s banking landscape — today, and especially years down the road.

That’s because they anticipate that more of the region’s community banks that have gone public or are in the process of doing so — that list includes United Bank, Chicopee Savings, and Hampden Bank, among others — will be acquired by or merged into out-of-town or out-of-state institutions.

This phenomenon will take the total of area branches controlled by non-local entities, currently 75% by the partners’ estimates, still higher, and, theoretically, spur a need for a decidedly local bank. Sattler and Gardner say they’ll be well-positioned to meet that demand.

“We’ve spent a considerable amount of time and a lot of effort to really focus on what customers think about their banks,” said Gardner. “We wanted to know their emotional thinking, their rational thinking about their banks; from their conclusions, we’ve designed a bank that will address those concerns.

“So whatever you don’t like about your present bank,” he continued, “you’ll love about Nuvo.”

In this issue, BusinessWest takes an indepth look at Nuvo Bank & Trust Co. and the people working to making that name part of the local business lexicon. Gardner and Sattler know there are doubters who say there’s no room for another bank, but they intend to make room.

Banking on It

The fax arrived April 27.

It was several pages in length, but Gardner and Sattler started celebrating (quietly) with the first sheet. It was from the state Board of Bank Incorporation, and was a simple acknowledgement, a certificate of “public convenience and advantage,” or a ruling that the proposed Nuvo Bank would serve a purpose in the community.

The two partners had worked for exactly a year to earn that piece of that paper, which was essentially an OK to move forward with the next, and more daunting, set of challenges. But its arrival also provided a moment to reflect on what the two were doing.

“Very few people in the world get a chance to do something like this,” said Gardner, noting that’s been 20 years since Tim Crimmins, Frank Fitzgerald, and a team of partners formed Bank of Western Mass., the last new bank to be opened in the region. “It’s incredibly exciting to take a concept like this and make it real.”

This story starts with the Chicopee Rotary Club and, more specifically, with events it staged within the community. They gave Gardner, a member of the club and then leader of the credit union, a chance to meet and get to know Sattler, a long-time commercial lender who was the banker for many Chicopee-based businesses.

It was Sattler whom Gardner approached when he started tossing around the idea of creating a new bank in Western Mass. The thought process was actually triggered by a recruiter from California-based De Novo Formations, which has developed a blueprint for new community bank creation and serves as a consultant to those who decide to embark on that complex process, defined by strict state and federal regulations and voluminous paperwork.

The recruiter came armed with a proposition to lead the formation of a new bank in Connecticut, but Gardner decided that if he was going to undertake such a venture, he would do so a market he knew well. And he asked Sattler, who knew it even better and had a huge number of contacts in the Pioneer Valley, to join him.

Before embarking on their venture, the two first decided to do some research — lots of it — to ensure that the concept was viable and worthy of what will likely be the balance of their careers in the banking industry. The two assembled what they would later call a focus group to examine the market, the partners’ proposition, and the extent to which there was a fit.

“I didn’t go into this blindly … I wasn’t about to drag anyone down this path without doing my homework — there was simply too much risk a year ago,” said Gardner. “I needed to know I was on the right track; I thought I was, but I needed other voices to confirm what I thought I knew.”

The partners heard from those already within the sector that, while the De Novo blueprint was being employed successfully in many regions of the country, Massachusetts — and specifically the Pioneer Valley — wouldn’t be a likely addition to that list. That’s because of the immense competition, the slow rate of growth, and the arrival of several powerful newcomers to the market, including Connecticut-based institutions New-Alliance and Webster.

All that competition has compressed the so-called yield curve — the difference between what banks can charge for interest on loans and what they’re compelled to pay in interest on savings — to razor-thin margins.

“We heard all that,” said Gardner. “We heard that this wasn’t the right time to be opening a new bank and it wasn’t the right place. But the more we talked to people, meaning customers of area banks, the better we felt about what we were doing. People were telling us there was a real need for this.”

Such need was confirmed, at least in the partners’ eyes, but the willingness of many area residents and business leaders, some of whom served on the focus group, to become partners, or organizers (that’s the industry term), in the venture.

The list of 27 people who invested, on average, $100,000 in the venture includes Donald D’Amour, chairman of Big Y Foods Inc.; Joseph Peters, president of Universal Plastics in Chicopee; Charles Epstein, president of Epstein Financial Services; Raymond Catuogno, president of Catuogno Court Reporting & StenTel Transcription Services in Springfield; Dawn Carrignan Thomas, president of Instrument Technologies Inc. in Westfield; and Michael Hanson, a principal of Hanson Associates and former commissioner of the Mass. Division of Banks.

“These are very successful, very talented people who obviously believe in what we’re doing,” said Gardner. “That support speaks volumes about our concept and whether it’s needed here.”

Taking Stock

Sattler opened the box carefully, and then started unraveling a thick covering of bubble-wrap.

Finally, he reached a small statue of sorts that is serving as a model for the company’s marketing logo. It features two glass stick figures with their arms stretched to form a semi-circle. The two half-circles nearly come together to form an ‘O,’ in this case the ‘O’ in Nuvo Bank.

But the artwork also conveys how the new institution intends to operate, said Sattler, noting that the two figures represent the bank and the customer, and how they can and will work in unison at the new venture.

The statue and marketing materials are still works in progress, as is the model for the new bank itself. While raising the capital to move their venture forward — the organization is offering to the public a maximum of 2,500,000 shares of its common stock at $10 per share (minimum purchase 1,000 shares) — the partners will simultaneously refine their business plan, develop a marketing strategy, and finalize an operating philosophy.

And the bank’s eventual customers will play lead roles in all that, said Sattler, who was short on real specifics, but said the bank will be non-traditional in as many ways as the partners can make it. He used other words not often employed to describe banking operations — like progressive and fun.

How they intend to do that remains to be seen, although the two partners returned repeatedly to the name Nuvo and what they believe it means: the very latest thing in banking.

“We’ve gone to great extremes to differentiate this bank,” said Gardner. “We’ve been from one end of this country to the other, looking for and challenging ourselves to find new and different things to do.

“And this will be a continual, perpetual effort to re-invent this bank,” he continued. “We won’t ever rest; we’ll never say, ‘we’ve got all these things, these bells and whistles, and now we’re done.”

Both Gardner and Sattler expect that this non-traditional approach will be welcome in the Pioneer Valley if, as expected, there is additional consolidation and acquisition of local institutions by larger, out-of-town entities. But they believe the need exists now.

“Banking is changing, and the players just keep getting bigger,” said Sattler, noting that Bank of America and TD Banknorth now hold more than 40% of the deposits in the region and are focused mostly on the larger commercial loans. “This leaves plenty of room for a community-oriented bank with local decision-making.”

Elaborating, he said the Nuvo Bank & Trust concept appealed to him because he and Gardner share what he called a “fundamental community philosophy,” and can apply it to two different disciplines — Gardner on the retail side of the ledger and Sattler on the commercial side.

“I thought that if we could put those disciplines together, with a relationship-focused approach, we would have a winning concept,” said Sattler, noting that the bank will make full use of advancing information technology to serve both retail and commercial customers.

And on the commercial side of the equation, Sattler believes the bank’s small size and community approach will serve it well. “The banks keep getting bigger, and they’re credit-scoring deals under a half-million,” he said. “Where’s the relationship? How are these banks going to help companies that are starting out and trying to get bigger?”

Extensive renovations are currently ongoing at the cavernous former bank branch in Tower Square, which has served several other roles in recent years, including home to the Pioneer Valley Photo Center. The space will be made considerably warmer and inviting, said Gardner, adding that, while the facility will be an enjoyable place to visit, he’s not sure how many future customers will actually go there.

Indeed, while many individuals still prefer going to the bank, a growing number are opting for online services — everything from bill-paying to loan applications. This trend will enable the bank to service all of the Pioneer Valley from one branch, said Sattler, adding that there are no real discussions about future additions of bricks and mortar.

“How many people in the Y generation are going into a bank anymore?” he asked. “We’re not an Internet bank by any means, but we are going to be capable of providing personalized, empowered service from our employees to customers, whether they want to come into the bank or not.”

Making a Statement

For now, the partners are focused on the Springfield site and quickly proving that the risks they are assuming were well worth taking.

Time will tell if the partners can actually re-invent the bank, as they claim, but Gardner and Sattler do not lack in confidence.

“We think this is absolutely the right time and the right place for this,” said Gardner. “That’s because we’re looking at banking differently than the people who are doing it now.”

George O’Brien can be reached at[email protected]