Signs of the Times

New Alliance Bank staged an elaborate ceremony last month to unveil its name and logo at the headquarters of the former Westbank, the institution it purchased last fall to effectively make its entry into the Western Mass. market. Long before the new signs went up, however, the New Haven-based giant, now with 88 branches and $8 billion in assets, was letting people know it had arrived.

Peyton Patterson says the phrase ‘community bank’ is not exactly a technical term within the financial services sector.

In other words, there are no strict guidelines, in her mind, that delineate which institutions may use that qualifier — at least from the standpoint of size, geography, and whether the bank is publicly traded, although many believe there are such parameters. Instead, ‘community bank’ is more of a look or a feel, rather than a benchmark for assets, deposits, or territorial reach, she explained.

“I think customers ultimately decide if something is a community bank … they feel that way when they sense a warmth and attitude from the company,” said Patterson, chairman, president, and CEO of New Haven-based NewAlliance Bank, an institution she believes is well-worthy of that term. This, despite the fact that it now does business in two states, Connecticut and Massachusetts, has 88 branches and plans to add to that total, and boasts more than $8 billion in assets, making it the sixth-largest bank currently doing business in Western Mass.

And it is this community-bank feel, as she called it, from an institution with regional bank size and commercial loan limits — a business model summed up in one of the bank’s marketing slogans: “capital ideas, human values” — that should enable NewAlliance to thrive in the Greater Springfield market.

And by thrive, she meant both retention of Westbank customers — 90% is considered the industry average for such transitions, but she projects a much higher number in this case — and what would constitute new business, or overall growth in market share.

The bank staged an elaborate ceremony to unveil new signage at the former Westbank headquarters building on Park Street in West Springfield late last month, but the bank was making its presence known long before the tarp was pulled back by Patterson and the city’s mayor, Edward Gibson. Indeed, by then, it had already added the Basketball Hall of Fame as a new client, and was deep into an aggressive push for new commercial and consumer business.

NewAlliance, comprised of six community banks, has the people and wherewithal to make a significant impact, said Patterson, noting that the team includes several long-time Westbank employees and some newcomers to the local market. And it will have significant resources with which to work; NewAlliance is roughly 10 times the size, assets-wise, of the former Westbank, and could have exponentially more lending capacity as well.

This potent combination should serve NewAlliance well in a market that is seeing limited residential and commercial growth and is, by almost any measuring stick, overbanked. And it will likely facilitate further growth in the market, be it organic in nature or through further acquisitions, she said.

“We will likely be pretty aggressive in this market,” said Patterson, “and most likely continue to grow in Massachusetts and add scale here.”

In this issue, BusinessWest looks at the new bank on the block and what its leadership team has in mind for the Western Mass. market.

Transition Game

Patterson said that there is no such thing as a ‘typical’ bank conversion, or transition, such as the one from Westbank to NewAlliance.

Each one is different, somewhat challenging, and certainly a learning experience, she said, as a group of employees adapts to a different culture and a customer base adjusts to a new name and roster of products. ‘Seamless’ is the word banks always use to describe these processes, she continued, but a transition is never really that.

Making the seams as innocuous as possible is the more realistic goal, she said, adding that early signs show that this is being accomplished with this transition.

There are some quantitative measures for gauging a conversion, she said, starting with the numbers at the bottom of customers’ statements. If they are what they should be, then the bank is off to a positive start. Then there are the retention numbers, usually calculated several months after the switch is thrown.

But there is a qualitative measure as well, said Patterson, using the term “comfort zone” to describe what she wants to create between her bank and the Western Mass. community. It starts with employees, she said, many of whom had never heard of NewAlliance before last fall.

“You want employees, especially those on the front lines, to have a comfort level, a feeling that these are the kind of people they want to work for,” she explained, “so they can feel good about recommending us to their customers, who are very often their neighbors.”

Patterson has had considerable experience in coordinating transitions. Indeed, the Westbank conversion is the sixth she’s orchestrated since coming to NewAlliance, then called New Haven Savings Bank, as president in 2002 and, two years later, successfully completing the largest bank IPO conversion in U.S. history. Those are some of the accomplishments that have helped put her on the top-10 list for banking CEOs nationwide, as ranked by U.S. Banker magazine, and positioned her at number 2 in that publication’s compilation of the nation’s “25 Most Powerful Women in Banking.”

Her ascension to that status has been nearly 25 years in the making, a banking career that has taken her from Philadelphia to New York to New Haven. A Political Science major in college, Patterson went to work for a law firm upon graduation, but two years in that environment and work on a huge anti-trust case convinced her that she didn’t want to be a lawyer. She shifted gears and went into banking, and never left.

After earning an MBA at George Washington University, she went to work for Corestate Financial Corp. in Philadelphia, rising to the position of vice president of Marketing and Product Management. She was recruited to Chemical Bank in New York, eventually ascending to senior vice president and business manager of the Consumer Asset Group. In late 1995, she went to Chase Manhattan Bank as senior vice president and director of the National Financial Services Group, before moving on to Dime Bank Corporation, where she served as executive vice president and general manager of Consumer Financial Services, solidifying her reputation as a change agent.

While she flourished at Dime Bank, with responsibilities including management of 200 branches, Telebank, ATM, and online banking programs, she eventually concluded that she wanted something different — a community bank to manage and take places.

Those were the instructions she left with a headhunter, and he found her such an opportunity at New Haven Savings, a mutual bank. “I thought that I had accumulated a lot of big-bank experience, and was a true believer in the community-bank model,” she explained. “I felt that, given the experience I had, I could do something and do it well.”

After setting a new record for a bank IPO ($1.5 billion), Patterson and the team at New Haven Savings went about leveraging that capital. The institution purchased the Savings Bank of Manchester and Tolland Bank, and merged them with New Haven Savings (going from $2 billion in assets to $6 billion in the process) to create NewAlliance Bank. This was a name, said Patterson, that bank officials believed they could take wherever they desired to go because it did not connote a city, region, or state.

Eventually, they would take it to Western Mass. (more on that later), but not before first acquiring two more banks based in the Constitution State — Trust Company of Connecticut in July 2005, and Cornerstone Bank in January 2006 — giving NewAlliance more than $7 billion in total assets.

Patterson described NewAlliance’s push into Western Mass. as a natural extension, because the bank was already doing business in several communities near the border, including Enfield. After a chance meeting with then-Westbank President Donald Chase several years ago, talks between the two institutions ensued and eventually led to acquisition discussions.

Westbank appeared a good fit, she explained, because it operated a few branches in Connecticut’s Windham County, near the Rhode Island line; had 11 branches clustered in the Springfield area, many near the Connecticut border; and shared a culture similar to NewAlliance’s.

Westbank, Patterson explained, would help NewAlliance better and more completely serve the Hartford-Springfield region, called the Knowledge Corridor in economic development circles, which she considers to be one market.

“We saw, with the growth we were experiencing in the Hartford market, that not only did a number of customers bank with us on the commercial side in this marketplace (Western Mass.), but we viewed the Springfield-Hartford market as one region,” she said. “We wanted something with a branch presence so that we could not only serve the lending needs of clients, but be able to serve the needs of people on the deposit side as well.”

Balancing Act

The ‘sameness’ in corporate culture, as she called it, should help contribute to an almost-seamless transition, an attrition rate far below the 10% industry average, and effective pursuit of market share.

The first step with all three assignments is achievement of that aforementioned comfort level with the institution, she explained, adding that this will be accomplished through work on several fronts with a variety of constituencies, including employees, customers, the area’s business community, and the public at large.

Many introductions were made at a ‘customer appreciation event,” staged at the Log Cabin Banquet and Meeting House late last fall. Usually, such a gathering might attract 50 to 100 people, said Patterson, but this one lured more than 300.

The effort to achieve a comfort level has taken other forms as well, including marketing initiatives that include something called a “friendly faces campaign,” ads showing many long-term lenders and personal bankers that are designed to show that little has changed other than the name on the building. Meanwhile, the NewAlliance Foundation, one of the largest of its kind in the country with more than $6 million, has awarded checks to several area groups as a way to show the bank’s commitment to the Western Mass. community of which it is now a part.

The second stage in this effort involved the new signage, completion of employee training, and a hand-holding process that included both employees and customers, Patterson said, adding that stage three, which is still ongoing, is the work to show the bank’s current and prospective customers “what’s better” about this institution.

“That’s because the competition has already started its work,” she explained. “The most vulnerable time for any bank is when another bank takes it over, because the competition starts saying, ‘you don’t want to go with them; you want to stay with us because we’re local.’

“That’s part of the game, the competitive process,” she continued, adding that NewAlliance is monitoring other banks’ ads to see what they are saying and doing.

It’s a healthy process … we just have to prove we’re better.”

And this brings her back to that discussion about what constitutes a community bank.

Patterson told BusinessWest that NewAlliance has shown in other markets that it can effectively compete with smaller community banks, such as the ones that populate the Western Mass. area, because it thinks and acts as they do, and also with the regional institutions, because of its size and lending capacity.

“There were many doors that Westbank’s lending officers couldn’t knock on, but now they can do that, and we’re already knocking on those doors,” she explained, adding that one of them was the Hall of Fame’s. “That’s not a transaction that Westbank could have done.”

Part of the growth strategy involves what she called “building share of wallet.” By this, she means broadening relationships — and providing more services — with customers on both the commercial and consumer sides of the ledger.

“We’re pretty aggressive,” she said of NewAlliance’s general approach to business. “We have a very productive sales force with a big appetite for growth.”

Net Results

When Patterson was a student at tiny Kenyon College in Gambier, Ohio, she successfully orchestrated the formation of a women’s basketball team — and then played on it as a center/forward.

She summoned some of those skills at a recent event at the Basketball Hall of Fame, at which she played a game with area youngsters and some professional players to raise money for charity.

It was all part of creating that comfort zone, she explained, adding that she believes NewAlliance is scoring points with customers and the community on a number of levels.

And that bodes well for the newest addition to the region’s banking landscape — by all accounts.

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