PITTSFIELD -- New regulations and reporting standards have brought significant changes in the banking industry that, combined with economic conditions, have led several Berkshire County banks to merge.
Pittsfield Cooperative Bank, the county’s oldest, has so far not sought out merger partners.
J. Jay Anderson, who will mark his fourth year as the bank’s president and CEO in March, met with The Eagle last week to talk about why, where his bank fits in the Berkshire financial landscape, how it deals with the new regulatory climate, his personal feelings about mobile banking, and what will be done with all the property the bank acquired in Pittsfield last year.
Q: The biggest county banks, Berkshire and Legacy, merged. And some of the smaller community banks in the Berkshires have merged. But you’ve pretty much stayed pat. Where do you fit in this whole
A: There’s a number of factors that drives banks to partner up. One can be geographical. Two, it could be expense savings. Three, it could be that anytime you have a lack of capital and there’s regulatory numbers that you have to have, it can make you merge with another organization.
We’ve been in the fortunate enough position that our capital base is extremely strong. Currently, we remain profitable. We’re growing as an organization. So there’s been really no reason for the bank to seek out a partner.
Q: The Pittsfield Cooperative Bank had $232.3 million in assets as of 2011. How do you stay competitive when all these other banks are merging?
A: [There’s] a couple of reasons. Number one, we still think service is pretty important in the banking industry. So as different models of banking have come and gone, we think staying true to the employee and the customer has been a good way for us to do business. Actually, being smaller has given us the ability to be more nimble, and we can move a little quicker.
A: For us to do an undertaking of, say, a website, it’s not a lot of work for us to do because there’s third-party providers that can help us with that. It’s not like we’re trying to restructure the whole bank into a website. We’re just trying to add the website as a delivery mechanism I guess I would say.
Q: But with all this merger activity, how do you manage to grow?
A: Believe me we’re not growing at 10 percent clips here. I think this year that we’ll probably grow at a 3 to 4 percent clip. We’ve added an emphasis the last few years on commercial business. Our commercial portfolio has nearly doubled in the last 21Ž2 years.
We knew that with all the changes that had been going on within the county in banking, that there would continue to be opportunities for us on the commercial side as customers are forced to go through changes that they don’t necessarily want to go through.
[It’s] that, and we’ve built a pretty good team of experienced lenders that are well known in the areas they serve.
Q: How does the current regulatory climate affect a bank like yours?
A: On a number of fronts they’ve tried very hard not to put the burden on small community banks. They’ve tried to draw the line at certain levels of size. But the reality of it is that it all comes weaving into every organization because eventually you’re all under the purview of the FDIC [the Federal Deposit Insurance Corp.].
We’ve kind of done a couple of things already to begin to combat that. Through the use of technology we’re working hard on streamlining our reporting systems so we’re not overburdened with daily or monthly or weekly reports.
The other thing we have [is that] nearly everybody in our loan departments and branch administration has backgrounds in compliance. So we all share the weight. We do it in more of a structured group arrangement.
Some will say it, ‘well it prevents you from giving 100 percent in one area.’
A couple of things we know: We know it’s getting done in the proper manner, which keeps us out of trouble from a regulatory standpoint and a potential fine standpoint. And, in addition to that, it’s not overburdening on one person so they can’t do anything except for that.
Q: So some banks just get overwhelmed.
A: Absolutely. They get overwhelmed, and the next thing you know, a bank our size, they get into trouble with the FDIC, and you’ve got four people in your compliance center that you’re spending $200,000 plus benefits on. A bank our size wouldn’t be able to survive if we did that.
Anderson said Pittsfield Cooperative Bank is interested in using Skype technology to have customers speak directly with bank representatives online, and mobile banking that would allow customers to bank from their mobile devices.
Q: Do you know when you plan to roll that technology out?
A: I do not. We wanted to [set up Skype] before we set up our mobile banking."
Being a conservative banker, I’m still worried about the technology from a personal standpoint. I know everybody can tell you that it’s all fine and great; that they’ve worked out the kinks.
For example, I wouldn’t do mobile banking [personally]. My information is too valuable. I know people are going to read that and say see that’s why they don’t have mobile banking, they’re behind the times. OK. Patience isn’t all bad.
Q: But mobile banking is coming here?
A: Absolutely. At some point it will be a prevalent banking channel.
Q: Last May, the Pittsfield Cooperative Bank
purchased a four-acre parcel on Elm Street formerly occupied by Harry’s Supermarket with the intention of either moving its headquarters there or building a new branch. The building was taken down last summer, but there hasn’t been any movement on the site since then. When do you think we’ll see some construction over there?
A: I couldn’t give you a date as of today.
Q: Do you think we’ll see it by the end of this year?
I don’t know.
Why are you waiting?
A: We actually have another location as well that we had already purchased for a branch location [on upper North Street across from Berkshire Medical Center] that took a lot of time and effort to get it to the point where we could do all the approvals.
Q: So that might get built first?
A: I can’t tell you what the definitive plans are for either one. But I know that we’re working on things like zoning and permitting. We’re trying to figure out what we actually need to do to get a time frame ready for which one we do first, and then when the second one comes, how do we transition. It’s a big undertaking.
Q: Do you think you’ll file plans with the city by the end of this year?
I hope so.
Q: Your father was Everett B. Anderson, vice president of Pittsfield National Bank in the 1970s.
When you became president of the Pittsfield Cooperative Bank you said you had always wanted to be a bank president.
How does it feel?
A: [It’s been] much harder than I thought it was. There’s so much that transpires from just a planning, regulatory and people standpoint. It’s easy to forget what you do for business every day to satisfy the customer.
I’m getting better. At the end of the day it’s all about the people. I think I’m getting better at allowing people do their jobs better, which eventually will make the bank better. But it’s definitely a learning process.
To reach Tony Dobrowolski: