Taunton bank finding new clients, revenue in insurance

When its board of corporators meets on March 13, Patrick J. Murray will be named the new president and CEO of Bristol County Savings Bank, replacing E. Dennis Kelly, Jr. who is retiring.
Since its beginning in 1846, the Taunton-based bank has had a solid presence in the community. It is a $1.2 billion, full-service financial institution offering consumers and businesses a comprehensive range of products and services in southeastern Massachusetts and northern Rhode Island.
In 1976, the bank opened its first branch office in Raynham Center and it now has 12 branches in 10 municipalities. Services expanded in 1996 when it acquired Anawon Trust to provide wealth-management services, and again in 2008, by acquiring a substantial interest in the Farrell Backlund Insurance Agency.
Farrell Backlund has allowed the bank to diversify revenue as part of a focus on noninterest income, and provide customers with both banking and insurance services.

PBN: Your bank is a mutual bank. How does that affect your structure?
MURRAY: There are about 600 mutual banks in the United States and most of them are either in the Northeast or the Northwest. People in the community that could not get loans from larger banks pooled their money and formed a mutual financial institution. The bank has no owners but the depositors have liquidation rights. As far as our governance, we have 100 corporators that elect 15 trustees.

PBN: How does that work to your advantage or disadvantage?
MURRAY: The one disadvantage of being a mutual is that the only way we can increase our capital is through our earnings. We cannot issue stock so we have to be cognizant of our bottom line.
Our capital ratio now is above 14 percent, which makes us one of the strongest banks in the region, if not the country. We don’t have to worry about stockholders looking over our shoulders, forcing management to make decisions based on stock price instead of the community. Other than that we are a full-service bank, and half of our loans are commercial. The remaining half are residential and consumer-type loans.

PBN: How do you see the economy shaping up in 2012?
MURRAY: I think it is going to be a repeat of 2011. We’re starting to see a few signs that it might be turning around. I think you’ll see employment improve slightly.
Banking for the most part is still driven by interest income, and with interest rates as low as they are right now, we have to put out twice as many loans as we’ve had in the past.
Once the consumer and small businesses get a little more confidence it will change and we’re starting to see evidence of that.

PBN: Will Bristol County Savings be expanding its presence?
MURRAY: If we go out to a community and attract loans we’ll put up a branch to service that loan base and also to attract deposits. That’s what we do, we sell loans.

PBN: How successful has the bank’s charitable foundation been?
MURRAY: We are extremely proud of the foundation and I give credit for that to Dennis Kelly, who is retiring. At the time of our 150-year anniversary we considered what type of gift we wanted to give back to the community. We came up with the idea of taking $1 million and setting up a charitable foundation. Over the years the bank has made a number of contributions. Since 1996 we’ve made [more than] $8 million in charitable gifts to local nonprofits.

PBN: In the last few years BCSB has expanded into investment banking and insurance. Could you provide a little more detail on what is offered? MURRAY: At the time we acquired Anawon Trust they were a limited chartered trust company. We purchased them and ran them as a subsidiary for a number of years until we dissolved their charter and absorbed them. We can help a company or an individual manage their investments.
A few years ago we bought controlling interest in Farrell Backlund Insurance Agency. Our bank is not in the business of selling insurance, but after discussions with their owners we all felt the purchase would help everyone, which it has. It’s a service we provide but we leave the work to them.
Recently, Farrell Backlund has purchased the Anderson Cushing and Richardson Cuddy insurance agencies. Now we probably have the premier insurance agency in the Attleboro market. We’re trying to take the insurance field and [match it to] the footprint of the bank.

PBN: How does BCSB benefit by these services?
MURRAY: As the net-interest margins for banks continue to shrink, and if you talk to any banker that’s probably their No. 1 concern, strategically we’ve put a focus on noninterest income. That’s why we looked at Anawon Trust, to diversify our revenue and get more into the fee-for-services arena for trust and investments, which has worked out very well.
With the expansion into insurance we are able to cross-customer between the bank and the insurance agency and provide customers more convenient service.

PBN: Has your government-finance department been successful?
MURRAY: Yes. We had been handling municipal deposits and four years ago we established a government-finance department. Today we have [more than] $140 million on deposit from surrounding municipalities. •INTERVIEW
Patrick J. Murray
POSITION: Executive vice president, treasurer and chief operating officer, Bristol County Savings Bank
BACKGROUND: Murray began his banking career in 1983 at Wolf & Co. as a certified public accountant. He joined Bristol County Savings Bank in 1986 as its controller, responsible for both its finance and operations. He has remained with the company since that time, becoming treasurer, chief financial officer and chief operations officer.
EDUCATION: Bachelor’s degree in accounting at Bentley College, 1983
FIRST JOB: Farm work, haying fields
RESIDENCE: Bridgewater, Mass.
AGE: 52