President and CEO Michael Tucker
Like most all bank presidents in the 413, Michael Tucker would concede that a great many of the region’s communities are heavily populated with financial institutions, or “overbanked,” to use the term most would put into play.
He’s inclined to include Greenfield on that list, and gestures out the window of his office to make his point. “They used to call the other end of the street Bank Row,” he said, referring to a stretch of Federal Street now occupied by what once were stately bank offices, many of them redeveloped for other uses. “They really should call this Bank Row now.”
Tucker, president and CEO of Greenfield Cooperative Bank (GCB) and Northampton Cooperative Bank (the two institutions merged in 2015, and the former name was kept) was referencing the number of competitors who call a different stretch of Federal Street home, and it’s a large number.
But, unlike most of the other bank leaders who bemoan the overbanked nature of this region, Tucker sees the landscape through a slightly different lens.
“Some bankers would say we’re overbanked; I would say we have choices,” he explained. “It forces you to be more competitive, and it gives people choices. It doesn’t hurt to have competition — otherwise, you get complacent.”
So perhaps all that competition should get some of the credit for what has been a consistent pattern of growth for the bank, especially since Tucker took the helm at GCB in 2003. Since then, the bank has seen assets rise from roughly $175 million to more than $630 million, its branch count soar from three to 10, and its commercial-lending portfolio take a quantum leap.
Overall, the bank’s strategy has been to gradually expand its footprint in Franklin and Hampshire counties, growing mostly via the organic route (although the merger with Northampton Coop certainly accelerated that process), and achieve more of the size that is needed to thrive in today’s banking landscape.
The plan also calls for seizing opportunities when and where they arise, which brings us to the institution’s latest expansion effort — a branch in South Hadley at the Woodlawn Shopping Plaza that will bear a Northampton Cooperative sign over the door and open next January.
Formerly a Bank of America branch — that institution has been closing a good number of facilities in recent years — the new location gives Greenfield Coop presence in another Hampshire County community, but one that enables it to serve residents of several nearby Hampden County cities, especially Chicopee and Holyoke.
The plan for the foreseeable future is summed up neatly in the bank’s annual report, issued just a few weeks ago.
“Our primary strategy remains to look for prudent and measured organic growth right here in Western Massachusetts,” Tucker wrote in the report, noting that many of those aforementioned competitors have ventured into Central Mass., Connecticut, or both. “We need to remain a lean organization, especially in light of the growth of mobile and electronic banking in today’s world. Our branch strategy recognizes the new world order with the continued growth of the internet.”
Michael Tucker says the GCB branch is just one of many banks located on Federal Street, a proliferation that provides competition, which he believes makes his bank better.
For this issue and its focus on banking and financial services, BusinessWest asked Tucker to elaborate on all those points and essentially draft a quick blueprint of the bank’s plans for the future. In a nutshell, it simply calls for more of what of what the bank has been achieving under his leadership — smart growth.
Points of Interest
Tucker said he ventured into banking, if that’s the word for it, while he was in law school at Western New England University.
He took a teller’s job at the institution known then as Springfield Institution for Savings (SIS), while attending night classes, not knowing this would be his employer for some time to come.
He remembers his first boss, John Collins, telling him that his law degree could be put to good use in the banking industry.
“He said, ‘I have a lot MBAs who could use some help, because we have this new thing called compliance,’” he recalled, referring specifically to the Truth in Lending Simplification Act of 1981. “That was my first foray into banking law.”
He took the title ‘counsel and compliance officer,’ and later worked his way up to senior vice president and general counsel. When Peoples Heritage acquired SIS, Tucker, like many others, was soon out of work, but he eventually landed at what is now bankESB for several years before being recruited to lead GCB.
When he arrived in Greenfield, he took over one of the smallest banks in the region with a simple goal — “I told the board I was going to keep this place mutual and hopefully leave it a better bank than I found it” — and set about a course of steady if unspectacular growth, which was by design, as he explained with a little humor.
“Our growth is roughly 4% to 6% a year,” he noted. “If we were a stock bank, they would have thrown me out the door. Because we’re a mutual bank, we can take our time. Where I see banks get in trouble is when they try to grow too fast and lose sight of their basic principles.”
GCB hasn’t done that, and its strategic goal — and operating philosophy — are summed up by its web domain name, www.bestlocalbank.com, and a comment from the annual report. “As I’ve often said before, we’ll probably never be the biggest bank,” Tucker wrote. “But we always strive to be the best bank in Western Massachusetts.”
During Tucker’s tenure, the bank has, as noted, expanded to 10 branches. There are two in Amherst (although they will soon be consolidated; more on that later), one in Florence, another in Northampton, two in Greenfield, as well as a commercial and residential and loan-services facility, and single locations in Northfield, Shelburne Falls, Sunderland, and Turners Falls.
Meanwhile, it has also greatly expanded its commercial-lending team and its commercial portfolio, which, like that at many banks in the region, is dominated by commercial real-estate loans, but also reflects the diversity of the local economy, especially in the bank’s hometown.
Indeed, this is an intriguing time for Greenfield, said Tucker, noting that the community once dominated economically by manufacturing has varied its economy, making great strides in technology and hospitality.
“Our growth is roughly 4% to 6% a year. If we were a stock bank, they would have thrown me out the door. Because we’re a mutual bank, we can take our time. Where I see banks get in trouble is when they try to grow too fast and lose sight of their basic principles.”
“There is a lot of energy in the town,” he said. “We have the new courthouse and the new parking garage; they opened the Olver [Transit Center], and there have been many other new developments.”
Still, this region, and especially Franklin County, where many communities are struggling to maintain population and especially young people, would be considered a low- or no-growth area, he acknowledged, meaning growth is a challenge for any financial institution.
This is why many area banks, as he noted in his annual-report comments, have ventured into Connecticut, Central Mass., or both, and why others have grown through acquisition or merger.
GCB has done some of that with its merger with Northampton Coop, a move that Tucker described as “logical” for both institutions because of that overbanked nature of this sector, and the lack of population growth in Franklin County.
“That’s why we looked at Hampshire County and why I talked to Northampton [Coop],” he explained. “It would have been silly for us to build another branch down in Hampshire County and fight 10 other banks for the money when we can partner with another bank.
“That worked out well for everyone because we didn’t have to lay anyone off,” he went on, adding that he spends one day a week in Northampton at that division of the institution. “It was a smooth transition. We were both very small — and we’re still one of the smaller banks — but we now have more size, and that helps. It was a good merger.”
By All Accounts
As he talked about his bank’s branch strategy, Tucker reached for his cell phone and held it aloft.
“This is our fastest-growing branch,” he said, noting that internet banking is becoming an ever-stronger force in this sector.
But brick-and-mortar branches are obviously still needed, he went on, adding that they probably don’t need to be as large as they once were, and they are far less transaction-oriented than they once were.
But they serve an important purpose in that they give a bank a presence and enable it to better serve customers in a particular region or community.
Which brings us to the new South Hadley branch.
The most logical expansion point for the bank moving forward is probably Hampden County, said Tucker, adding that the South Hadley branch provides an opportunity to make some strides in that direction.
Tucker found the branch while on one of his many drives around the area looking for opportunities.
“We keep our eyes open, and I drive around the area a lot and take a look at the communities,” he explained. “South Hadley was a community that I thought had some upside, and I was surprised when I read that Bank of America was closing that branch because they had a fair amount of deposits in that office.
“With this branch, we can serve some customers that we have already in Springfield and Chicopee,” he went on. “But it also gets us to reach a base in South Hadley that BOA is telling, ‘if you want to bank with us, you have to drive over here.’”
BOA’s departure will ultimately lead to GCB’s arrival, specifically its Northampton Coop division, said Tucker, adding that, while moving into South Hadley, the bank will continue to look for other growth opportunities as well as ways to become the ‘leaner organization’ he mentioned in the annual report.
Toward that end, the bank will consolidate its two branches in Amherst into one, a nod to the fact that specific branches are simply handling fewer transactions these days.
“When I was a teller in Forest Park [for SIS], we had seven or eight tellers plus a manager and an assistant manager,” he noted, turning the clock back four decades or so. “People were lined up out the door — we didn’t have deposit — and everyone came in to cash their Social Security checks on the first of the month.”
Elaborating, he said the branches in Amherst that saw 10,000 transactions a month several years ago were down to 5,000 maybe five years ago, and are now seeing roughly 3,000 a month, thanks to ever-advancing technology.
This phenomenon will eventually lead to fewer branches, and, more immediately, smaller facilities.
“The industry is moving in that direction,” he said while again holding his phone aloft and explaining it is now a branch itself in most all respects. “But I don’t think branches will be obsolete; they will be smaller and leaner.”
As for future expansion geographically, Tucker said GCB will continue to look for potential landing spots. “We’ll continue to look south and possibly east to Worcester County,” he told BusinessWest. “A lot depends on what happens; with some of the branches we’ve opened, I didn’t anticipate doing it at that time, as in Turners Falls, but the opportunity arose.”
In his annual-report statement, Tucker noted that, over the past 114 years, GCB has had three basic operating slogans.
It’s gone from ‘Traditional, Progressive, Locally Focused,’ to ‘In the Community, for the Community,’ to the current ‘Come on Over to the Coop.’
The words are different, but they say the same thing, essentially — that this isn’t the biggest bank on a block crowded with other banks, but it strives to be best, and it’s generally successful in that mission.
This is the strategy that has worked since Teddy Roosevelt was in the White House, and there isn’t any sentiment to change it, said Tucker, because it works, not only for the community, but for the institution as well.
George O’Brien can be reached at [email protected]m