LEE -- The consequences stemming from the economic downturn of 2008 left many small community banks with uncertain futures.

Some merged with other banks in order to maintain their identity. Others were purchased by larger banks that had the financial resources to sustain them.

Lee Bank decided to expand its footprint, offer more competitive checking products, and invest in technology.

That strategy went into effect two years ago, and so far it has been successful. Lee Bank has experienced a 10 percent increase in customers over the last two years.

The bank's assets also rose $4.7 million to $280 million by the end of last year, a performance that placed Lee Bank in the top third of banks in the Northeast that have between $250 and $300 million in assets.

The bank's earnings did drop in 2013 to $1.45 million from $1.65 million the year before. But bank president David J. Bruce attributes that decrease mainly to the cost of having to operate two new branch offices. In expanding its footprint, Lee Bank has opened new offices in Pittsfield and Lenox the last two years, bringing its current amount of branches to five.

"In order to undertake this expansion for long term benefit, our profits in the short run are going to diminish somewhat," Bruce said. "It's that age old thing, you sacrifice short term profit for long term gain. Because we don't have stockholders we can make that decision without worrying about the effect it has on stockholders.


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Lee Bank decided to go in a different direction than some of its peers because the strategy fit the bank better, Bruce said.

"A couple of years ago we looked at the landscape and said, ‘How do we continue to thrive as a local community bank," Bruce said. "We determined that a key to our success in the future was to expand our footprint, that we needed to have a more competitive product offering, primarily in the checking area, and make investments in technological conveniences, if you will."

Those technological conveniences included providing customers with the ability to either to open new accounts or apply for mortgages online, and providing them access to a mobile banking app.

"As we studied our customer base we found that a significant amount of our customers were doing business where branches weren't really convenient," to get to, Bruce said. "We thought it if we can make it more convenient to do business that will give us the opportunity to grow our customer base at a more rapid pace."

When Lee Bank opened its Pittsfield branch in the Central Block on North Street in 2012, it was already planning to open a new office in Lenox, Bruce said.

"Even thought they opened a year apart it was all part of the same strategy," he said.

Although earnings dropped in 2013, Lee Bank originated the second most home loans among all financial institutions in the Berkshires last year, behind only the Greylock Federal Credit Union, the first time the bank had ever accomplished that feat, Bruce said. Lee Bank was also the No. 1 originator of Mass Housing Loans in Berk-
shire County last year.

"Once again it has to do with our physical expansion," Bruce said. "It's more convenient for people in Pittsfield now to get a mortgage from us."

Commercial lending was also successful as Lee Bank was named the Massachusetts Small Business Association's lender of the quarter for the second quarter of 2013.

"That's a tribute to our small business customers as well," Bruce said.

To reach Tony Dobrowolski:
TDobrowolski@berkshireeagle.com
(413) 496-6224