Up on Main Street

Monson Savings Bank is a true community bank, dedicated to growing market share in and around the towns where it has a presence, and staying active in community life. But it’s also committed to innovations in technology and service delivery, all aimed at making customers’ lives a little easier.

The Monson Savings Bank boardroom now has a window — several large ones, actually — allowing people to look out on a downtown that has grown right alongside its namesake bank.

And even if the only recent physical expansion at MSB is the move of some executive offices and meeting space across the street from the bank’s longtime Main Street headquarters, President Roland Desrochers still sees plenty of room for this almost 130-year-old institution to grow.

“It made sense to utilize this space available in town, so close by,” Desrochers said of the move to free up square footgage in the main building. “Of course, it doesn’t have to be close by — communication isn’t a challenge these days, so to some degree, it doesn’t matter where we are. But we finally have a boardroom that’s not in the basement. I’m sure the board appreciates that.”

Indeed, with bank operations and offices bursting the bank’s headquarters at the seams, the relocation of some offices across the street was a no-brainer. In addition, when the U.S. Postal Service moved into a new building behind that house, Monson Savings Bank took over the former post office building nearby, giving it three locations in close proximity — and some needed elbow room.

Not that growth is a bad problem to have.

“This year, we’ve experienced 5% to 6% growth in our asset base and deposits, and we have generated most of our growth in the retail arena through the initiation of new products,” Desrochers said, including First-Rate Checking, which is a high-rate savings product tied to a checking account, offering 2% interest. “In this environment, where we’re seeing money markets paying less than one-half percent, that’s a pretty good return.”

Then there are Cash Back Checking, accounts that pay depositors back when they use their debit card; and NextGen banking, which targets specific age groups with different features, such as enhanced online and ATM access for college-age customers. “With each one of these products, we’re attracting a different client base,” Desrochers said.

That’s important for a bank that has adopted a strategy of building market share with just three locations — Monson, Hampden, and Wilbraham — in a region peppered with banks that have built branches with startling speed over the past decade. While all three locations have succeeded and grown — including the newest branch in Wilbraham, which has the added challenge of doing business on the fiercely competitive Route 20 corridor — the bank’s internal research says all have room to expand market share further, as long as MSB is nimble and responsive to what customers want.

Highs and Lows

Commercial accounts have seen similar growth, again through products aimed at making customers’ lives and finances easier, such as a small-business checking account that allows depositors to write 500 checks and make 500 deposits per month for free.

Then there’s the introduction last year of remote capture, a technology that allows business owners to make checking deposits without visiting the bank.

“That has become very popular because they don’t have to worry about making deposits here; they can just scan checks in their offices. So we’re able to sell commercial checking accounts to customers who are not necessarily located right near one of our branches.”

However, not all business is booming these days. The economy has taken its toll on commercial lending, which has been quieter than normal over the past year, Desrochers said.

“We get most of our commercial-loan business through referrals from customers or maybe board members, people like that,” he noted. “It’s quiet now, but I think you’ll find most banks will say they’re quiet, too. I do wonder how some businesses, especially trades, are being impacted by the economy, how many people will have issues through the coming winter.”

In addition, “delinquencies are up on the residential side, but it’s still much lower than the state average. People are definitely struggling to make payments, and a lot of people are waiting until the last day of the month, which is not something normal by any means. We’re hoping we can at least control the delinquencies and work with customers to whatever degree we can.” He noted that bank officials know that people are struggling, and the best way to handle problems paying bills is to keep the lines of communication open.

“Burying your head in the sand is not the best way to deal with the problem,” he said. “Banks are willing to sit down and work with people, but they need to take it upon themselves to be proactive with their financial institution.

“Banks don’t want to own real estate,” Desrochers continued. “Look what it costs to foreclose on real estate these days ‹ $5,000 to $7,000 for a single-family home. It doesn’t make a whole lot of sense to do that, so we obviously want to keep someone in their home.”

Even so, Monson has seen its marketing strategies pay off on the residential loan ledger; this year, it ranks fifth in home mortgage originations in Hampden County, up from 17th just five years ago. Desrochers credits not only competitive rates for that performance, but faster turnaround times and technology like online mortgage applications — again, to make the lives of customers a little easier.

BusinessWest asked whether Monson’s relatively small size compared to other regional banks allows it to be more nimble in introducing such services, but Desrochers said size is really no factor.

“In order to introduce new technology, things like online mortgages and mobile banking, no matter how big or small you are, you have to the spend time and effort necessary to test and implement those products,” he said. “You have to make the investment.”

He admitted, however, that it’s a challenge — but a rewarding one — to serve customers who are far savvier and more receptive to change than in the past.

“They wonder how they did without these things,” he said with a smile. “The whole gamut — online bill pay, remote capture — once customers have them, they wonder how they did without them.”

Meeting Needs

Monson Savings Bank, like many community banks in the region, is well-capitalized and largely free of the bad loans that capsized the financial system last year. But the institution continues to take a cautious path, setting aside an additional $700,000 in reserve this year to cover any potential losses should the issues facing banks get worse.

“Capital levels are strong right now, and the smart thing to do, seeing that, is to control growth,” Desrochers said. “Capital is so critical right now in this low-rate environment, and assuring a strong capital position is the most important issue until things turn around for the better.”

He has never been a proponent of rapid branching out, and the current financial landscape only reinforces that notion. “Now is not the time to get carried away, in our estimation. Preserving capital is critical in this type of market.”

Still, that caution doesn’t affect one of Monson’s key roles as a community bank — and that is supporting nonprofits that add to the quality of life in its communities.

“Most not-for-profit organizations and schools in our market area are very pleased with how we contribute to them,” Desrochers said, ticking off other beneficiaries of the bank’s community support, from librariers and arts groups to youth sports teams and senior centers.

“Those types of organizations have had cutbacks, and we try to help,” he said. “We try to contribute 10% of our bottom line back to the community, which for us runs in the area of $100,000 to $120,000 a year.”

That aid benefits not only small, locally based groups, but larger entities, such as the United Way, Girl Scouts, and the Red Cross, that in turn serve surrounding communities in specific ways, he said. “We give back to those organizations that meet wider needs. We don’t want to lose sight of that.”

It’s all about making a small difference in a community that can now be seen through the boardroom window.

Joseph Bednar can be reached

at[email protected]