Bangor Savings Bank paints a bullseye on Portland
Photo/Michelle Hammarstrom
James Conlon, president of Bangor Savings Bank
Ask Bangor Savings Bank President Jim Conlon where Maine's biggest homegrown savings bank will be going next and he doesn't hesitate.
"If you're asking me where our next three branches will be, that's easy. Portland, Portland and Portland," he says.
Or more precisely, greater Portland, where the Bangor-based bank has seen explosive growth since it opened its first branch here in 2005. In March 2006, it held $30 million in deposits from greater Portland customers; this March, it was $180 million, an increase prompted by new branches in Portland, South Portland and Scarborough that opened in February 2007.
Conlon and Yellow Light Breen, the bank's communications director, chatted with Mainebiz just after the bank's annual meeting where stakeholders reveled in record earnings through March 2009. The bank's performance - $2.3 billion in assets, a 60-day delinquent loan rate of .008%, a 30% bump in mortgages over last year, more than $1 billion administered by its trust department, sustained charitable giving through its Bangor Foundation - is a testament to its conservative, rational approach to banking set against the backdrop of unceasing turmoil in the national financial markets.
"For us it's all about stewardship," says Conlon. "We are preparing the institution for the future. For our 650 employees, for our customers. We keep asking, ‘How can we be sustainable the long term?'"
Conlon said the decision to target the Portland market was a simple matter of demographics. To sustain the bank's growth, it needed more opportunities.
"Seventy-five percent of the state's population is south of Waterville and most of what we had was north, east and west of it," he says of the bank's decision to extend its footprint south.
The timing was right, as well. Several smaller, Maine-based banks had been absorbed by larger, national banks, changing the Portland financial services landscape. Banking decisions that had been made in-house and in Maine were going out of state. Breen says Bangor Savings was able to capitalize by offering customers products as good as any of the large national banks, at fair prices, but deliver them in a community banking way.
"Our community bank management team requires that a customer gets a call back within 15 minutes if they have an issue," he says. "Our people and our products at a fair price, that's what we count on."
Conlon said the bank expects to have an announcement within a couple of weeks connected with its New Market Tax Credits program, which directs low-interest loans between $500,000 and $2 million to a sector of the business community that previously hadn't been able to take advantage of simplified, subsidized loan programs. It also recently launched its Business Insight Center, an online collection of best practices and resources for business people. The bank currently holds about $300 million in business and commercial loans, versus the $200 million it holds in home mortgages.
It intends to grow thoughtfully, staying away from "things we don't understand," says Conlon, referencing the subprime loans and toxic assets that crippled other financial institutions. There are still plenty of challenges ahead, though. Conlon notes that insurance from the Federal Deposit Insurance Corp., which cost the bank $175,000 a few years ago, was $1.7 million in fiscal year 2009, and he expects it will top $3 million by the end of this fiscal year - the price of insuring deposits to help restore consumer confidence in the finance industry.
"It's the 7,000 healthy banks that are going to pick up this at the end of the day," he says.
Bangor Savings intends to keep its free ATM service, despite the $1 million cost the bank pays to rebate customers' fees incurred elsewhere. Launched in November 2006, the no-fee, no-matter-what ATM pledge generated "thousands of new customers and millions in deposit balances," says Breen, helping to fuel the bank's expansion.
"We will continue to be opportunistic," says Conlon. "These are unprecedented times ... community banks are a good place to be."
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