PBN: If you’re going to continue to grow, does it make sense to stay headquartered in Swansea, Mass.?
Hjerpe: We’re very comfortable right now that Swansea is the right place to be. We now think it’s a nice central location between southeastern Massachusetts and Rhode Island. We view our expansion from here in both directions; we hope to go both north and south of Providence. Our footprint goes toward New Bedford, Taunton and Easton, and we’d like to keep going both east and northeast toward Boston. It’s a great location and great building. We built this building and moved in October of (1997). We built it to our specs and bought the land for a reasonable price. It’s a good spot for us.
PBN: How many branches do you have in Rhode Island?
Hjerpe: We have 19 in Massachusetts and seven in Rhode Island. Also, we have two new branches (in Barrington and Warwick) that will open this calendar year that will bring us to nine branches in Rhode Island.
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PBN: It seems you need more branches to bridge the gap between southeastern Massachusetts and Connecticut.
Hjerpe: Well, our Connecticut branches come as far west as Groton. So yes, we’d like to expand south from Providence. Webster has an aggressive de novo branching operation. We plan to put in several more branches in the next few years in the Greater Providence market as well as southeastern Massachusetts. I think you will see an accelerated pace of new branches that we will be building.
PBN: Would you also consider acquisitions for the bank to grow in the Rhode Island market?
Hjerpe: We’d like to consider additional acquisition opportunities as soon as they become available. That would be another way we would like to grow, but we’re really committed to growing organically and through de novo branches.
PBN: How will you measure your market penetration in Rhode Island?
Hjerpe: We’ll do specific scientific studies, if you will. There’s a firm that Webster uses to study and measure their market penetration. It’s a third party that does a complete review for us, looks at the data, talks to customers and does a brand awareness analysis as well as a market penetration study. We’ll plan to do that every other year: a commercial study one year and then we’ll do a small-business, more retail-focused study the next year. Webster Bank had the lowest market penetration, for example, in commercial lending in the Hartford area – it basically started with zero – six or seven years ago. And now they have the largest market penetration.
PBN: At what point will you be satisfied with your market share in Rhode Island?
Hjerpe: I think we’d like to be one of the top three of four names that roll off people’s tongue when they are asked, “Where would you like to bank in Rhode Island?” Obviously there are a couple of really big names out there now. Citizens Bank has owned Rhode Island for a long time. Bank of America is a big name. We want to be big enough to provide the services that anybody could need, but we also want to be small enough to be considered a community bank with local, customer-oriented services.
PBN: What are the advantages and disadvantages of growing both organically and through acquisitions?
Hjerpe: Organic growth gives us an opportunity to expand on what we currently do well. I think we have a great branch network and great reputation. One of the things that is interesting is the FirstFed name did not have huge market recognition, but we have had very high scores on the level of service and customer satisfaction. We think we have a good model and want to continue to expand it. On the acquisition side, the nice thing is you get a lot of traction fast. Everybody wants to grow more quickly. We think we can, not withstanding acquisitions, grow at a rate faster than market growth. If the market is growing at 6 percent, we want to grow at 8 percent.
PBN: There are many credit unions in this market, how do you compete with them?
Hjerpe: The same thing we do to compete with everyone else. Obviously, credit unions have a tax advantage, if you will. But we believe we have some advantages as well. We have product sets that are maybe a little broader than credit unions can offer. They are just another competitor and we compete with them head to head – and we think we do it pretty well.
PBN:Why should small-business owners choose Webster Bank?
Hjerpe: Small-business owners worked very well with FirstFed, and FirstFed provided great service to small-business owners. We thought we did that pretty well and want to continue that. We have everything we had and more. And we’ve expanded the number of people who can provide that service. We think we’re big enough to provide virtually any service they could possibly want from a bank, but small enough to give them the same service they received from FirstFed.
