Taunton-based Bristol County Savings Bank, which operates a branch in Pawtucket, is moving into New Bedford. E. Dennis Kelly Jr., president and chief executive officer, says the 11-branch, $1.2 billion bank will open its first New Bedford branch by mid-2010. Kelly recently answered a few questions about the bank’s growth strategy and its plans in the Rhode Island market.
PBN: Bristol County Savings is a mutual savings bank. Can you explain the basic differences between a mutual savings bank and other types of banks?
KELLY: A mutual savings bank is a non-stock financial institution. Rather than having shareholders who would vote on various corporate matters, we have representative depositors or Corporators. Another major difference is that our capital is derived almost entirely from retained earnings. Since we organized in 1846 we have accumulated over $168 million in capital, which gives us a capital ratio of nearly 14 percent on assets of almost $1.2 billion.
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PBN: How has Bristol County Savings fared during the financial turmoil in the last year or so? What’s your forecast for the future?
KELLY: [This year] was a very challenging year in the banking industry. Despite all of the economic issues, we have just completed – on a pre-tax operating income basis – the second most profitable year in the history of the bank with pre-tax operating income exceeding $12 million. Looking ahead we continue to see challenges, but I think with this continued strong performance we can surpass our 2009 results.
PBN: What has been Bristol County Savings Bank’s growth strategy, in the past and going forward?
KELLY: Our growth strategy would probably best be described as slow and steady. We look for more controlled growth, which allows us to not only grow assets but our capital position as well. Being a mutual, we can take a long-term view without the short-term return on equity demands that stock institutions might face.
PBN: When you open a new branch in a new market, what’s the process of building deposits and customers? What kind of time horizon does the bank work on?
KELLY: We want to become part of the community, get to know the people there and try to make a positive impact, which usually takes five to 10 years. We hope to do this as a depository, lender and good corporate citizen. In fact, last year we donated over $850,000 to 120 nonprofit organizations that service people in our market area.
PBN: You made the leap over the Rhode Island border several years ago when you opened a Pawtucket branch. Do you foresee a larger Rhode Island presence in the future?
KELLY: I do think that Rhode Island will play more of a role in the future of our bank. This will not only be through our banking services but our trust and wealth management services, led by Paul Lenahan and Brian Hunter. In addition, we offer both personal and business insurance products through our majority-owned insurance affiliate Farrell Backlund Insurance Agency LLC. I believe that all three areas offer future growth opportunity for us.
