Profiles in Business: George Haynes banks on Brattleboro
It’s lucky for the two distinguished men in dark, expensive wool suits that the supermarket isn’t too crowded this morning. They fly up and down the aisles with their shopping carts, their long tailored overcoats and winter scarves flapping out behind them, shouting to each other as they pass; clearly, they are having a great time.
“This is a soup and tuna fish run,” calls out dark-haired, stocky George S Haynes. “I’ve cleaned out every can at 50 cents a can. It’s not the albacore white, it’s the chunky light, but it’s 50 cents a can.”
As Haynes races off to a raimen noodle sale, the store clerk smiles and asks a passerby, “Did you ever expect to get a shopping lesson from a banker?”
Haynes, 59, is president and CEO of the Brattleboro Savings and Loan Association FA. This particular morning, a few weeks before Christmas, Haynes and Larry Smith, community relations director for Entergy Nuclear Vermont Yankee, are trying as hard as they can to spend $1,000 in an hour; ultimately, they will succeed in spending $998.
This is the first shopping spree of many for the pair, who run Project Feed the Thousands, Brattleboro’s Christmas food drive. More important, the morning is a typical example of how Haynes defines his role as small-town banker: to have fun while doing good.
Shortly after he came to BSL in 1992, Haynes told Smith he wanted to do something for the community.
“Then in June of 1993, I got a call from the Drop In Center,” Smith said. “I didn’t know what it was. I thought it was a place where people who live under the bridges get food. But the center invited me down, and I saw a line all the way out the door. And they were people I knew! They were moms, elderly people, teenagers. ‘Oh my God,’ I thought. ‘People I know are hungry!’ I put George in the car and drove him down there. He couldn’t believe his eyes. There was nothing on the shelves.” Project Feed the Thousands was born.
“For me, that was showing the very human side of George, a guy who is always bubbly and a prankster,” Smith said. “For both of us, it’s very serious that there’s hunger. We’re driven to do this project. We run our tails off There’s no woman in the state that can out-shop George and I.”
The goal was to fill 10 tractor trailer trucks with non-perishable food and feed 4,000 hungry people in Brattleboro and 38 surrounding communities. To accomplish it, Smith and Haynes had to get the entire community involved.
C&S Wholesale Grocers, Inc donated three tractor-trailer loads of food. Boy Scouts and school children collected money Drop-off bins strategically placed in supermarkets collected additional food. In the supermarket, a woman handed Haynes a $100 check, “Because I know what you’re doing here.”
“Community do-gooder” is not usually part of the job description for a bank president, but you can hardly open the Brattleboro Reformer these days without seeing Hayne’s smiling face.
He is everywhere. He is shopping for food for Project Feed the Thousands; he is handing out monthly Community People Awards; he is feeding hamburgers, hot dogs and sodas to 2,000 passersby on Main Street on the bank’s annual Community Appreciation Day (“Most banks have a customer appreciation day; we have a community appreciation day”); he is the campaign chairman of this year’s United Way Fund Drive; he is promising to tithe 10 percent of the bank’s yearly earnings to charity; he is working on the hospital fund drive; he is talking to school groups about what it is like being president of a bank; he built a room in the new BSL building specifically so nonprofit organizations will have a place to meet; he is partnering with the Brattleboro Union High School Career Center, where BSL has a student-staffed branch office.
Haynes is so committed to community relations that he deliberately placed his ground-floor office at the front of BSL’s Main Street building. He can sit in his maroon leather chair and watch people reading in the library across the street; he can watch the cars and pedestrians; he can see and greet everyone who comes into the bank.
Haynes may be genuinely gregarious, but he is also, as Smith describes him, very aggressive, very focused and very driven.” The first word everyone who talks about him uses is “competitive.”
Community involvement, it turns out, is part of a long-term marketing strategy to convince everyone in Windham County that banking at BSL is the right thing to do. In fact, the bank’s motto, taken from a Quaker Oats commercial, is “For all the right reasons.”
“George has no tolerance for people banking elsewhere,” said Mary Boulay, BSL’s senior vice president and its senior retail banking officer. “His goal is a 50 percent market share. No excuse is good enough for why you don’t bank with Brattleboro Savings & Loan.”
Haynes’ strategy seems to be working. Since he came to BSL 10 years ago, the bank has almost quadrupled in size.
“When I came, the size of the bank was almost $35 million,” Haynes said. “And we also had about $13 million in sold fixed-rate mortgages, which is what most banks do with their fixed rate mortgages – they sell them. Today, we’re about $130 million in assets and we have about S85 million-to-$90 million in sold loans.”
Haynes frequently describes his successful banking career as a matter of “right place right time.” But his business success has not been mirrored by success in his personal life; he has been married and divorced three times.
“I have two grown children, and a son who’s nine and a daughter who’s 13,” Haynes said. “I see both of the younger children every week, and my son spends 50 percent of his time with me. Tonight we’re going to the Cub Scouts. But obviously, my personal life hasn’t been as successful as my business life. Over the past several years, however, it seems to be the balance in my life – devoting time to the bank, time to the community, and time to the two children. That seems to work well with me.”
Right now Brattleboro is experiencing an economic downturn. In the past two years, several large companies have closed or moved and more than 300 workers have lost their jobs. In the coming year, more of the town’s large employers will be leaving, and another 250 or 300 employees will face an uncertain future. Many of these dislocated workers are customers of BSL. What happens to Haynes’ friendly, good-guy image when his customers can no longer repay their loans is an interesting question.
Brattleboro Savings & Loan
BSL is one of 20 community banks in Vermont.
“The Federal Reserve Board thinks a community bank is a billion or less and a regional bank is a billion or more,” said Thomas J Candon, deputy commissioner of banking for the Vermont Banking, Insurance, Securities and Health Care Administration.
BSL, however, is the only remaining savings and loan in the state.
“Once we had about nine or 10 of them,” Candon said. “Then Vermont Federal Savings and Loan in Burlington merged with Middlebury, Randolph and a few others changed their name to Vermont Federal Bank. Brattleboro, Springfield and Bennington remained. Then Springfield merged into Brattleboro. Bennington stayed on its own, and then a couple of years ago converted to a federal savings bank.”
In the past, savings and loans were usually thought of as residential mortgage lenders (think of Jimmy Stewart in “It’s A Wonderful Life”). But today there is almost no difference between a savings and loan and a bank, Candon said.
“In the 1980s, when those terrible banking scandals happened, the federal regulators started allowing savings and loans to call themselves banks,” Candon said. “I can’t tell you the difference today between a savings and loan and a savings bank. There may be little or no difference. Savings and loans are becoming business lenders, and those who want to get into business lending want to shed the image of a savings and loan.”
BSL was founded in the Brattleboro Town Clerk’s office in 1912 as a savings bank for working people. It is depositorowned. For each $100 on deposit depositors receive one vote, up to a maximum of 100 votes. People with loans do not vote. The depositor-owners elect a board of directors.
“We were always a community bank,” said retired Brattleboro businessman W Robert Johnson, who has been on the bank’s board for 32 years. “That’s how you get on the board – if you’re the president of the Chamber, or you work on the Winter Carnival, or you’re involved in the community in some way.”
BSL is determined to remain a small-town, community bank, Haynes said. In an age of mergers and acquisitions, it proudly announces it is “Not For Sale.”
“That’s because we’re not a stockowned bank,” Haynes said. “It’s not like somebody can come in and tender an offer and we can be bought. With stock banks, it’s continued expansion and setting oneself up to be purchased. So in an environment like Vermont, where community is important, people are known by name, and we’re able to do business, a lot of times, face to face. It sets us apart to be mutually owned.”
The mergers and acquisitions at other banks are good for BSL’s business. Every time a bank with a local branch in Brattleboro is purchased by a larger bank, BSL gets new customers who are determined to be treated like a person instead of a number, he said.
“For instance, when Vermont National Bank was acquired by Chittenden, within a 15-to-18 month window we opened between 2,500 and 3,000 new deposit accounts,” Haynes said. “And we opened a number of new loan relationships.”
The business climate for a small community bank is excellent right now, Haynes said. For one thing, he anticipates more bank acquisitions; so if the past predicts the future, that will mean more new BSL customers. Also, current low interest rates are bringing in more loan requests.
“The drop (in interest rates) has been very good for people borrowing money and refinancing their mortgages,” Haynes said. “So that has increased our business over the past couple of years.”
BSL’s board of directors are delighted with Haynes.
“He’s quite a guy,” said board chairman Joseph E Little, a CPA and financial planner. “As a CEO, he’s excellent. He’s a model for other CEOs, in my opinion.”
Haynes leads by example, Little said.
“He creates enthusiasm among his employees,” Little said. “He may pick a distant goal, but he keeps people pumped up and doesn’t let the enthusiasm wane. He puts his heart in it. He doesn’t hide under his desk. If there’s an issue, he goes right at it. He likes to connect to the customers. Every new loan gets a letter from him with a survey about how the experience was. He responds to them. Anyone who writes to him, he responds personally. He really has his hand on the pulse of what’s happening in the bank.”
Haynes said he is managing BSL for the long future.
“Maybe our business approach is different from a stock bank or some of our competitors, in the sense that we’re not managing the bank with the idea that you have to produce a quarterly dividend every three months,” Haynes said. “Being mutually owned, I don’t think we’re under that kind of constraint. Our focus is probably more on a longer term, on building relationships with the customers in the community.”
Right out of High School
Haynes was born in Brooklyn, NY, but before he was four, his parents moved to North Bennington.
“I have a younger brother,” Haynes said, “and they wanted to get their kids out of the city and into the country. So I grew up in North Bennington, and went to North, Bennington High School, but even though I consider myself a Vermonter, I’m not, because my parents weren’t born here.”
Haynes’ father was a color photographer who worked for a polygraphic company. His mother was, for the most part, a housewife until her children left home. Haynes, who was an athlete in high school, planned to join the Air Force as soon as he graduated.
“And then I was rejected because I had high blood pressure,” Haynes said. “That was weird, because I played soccer, basketball, and baseball, and we always had to get a physical. I was all set to go to Lackland Air Force Base, so it was a great shock.”
Haynes was also newly married, so he had to scramble for a job. An employment agency sent him to the Vermont Bank and Trust Company (eventually called First Vermont Bank and now part of Banknorth Vermont) in Bennington, where he got an entry-level position at $46 a week, plus an extra $1 for gas because he had to drive in from North Bennington.
“I started out filing checks,” Haynes said. “The first couple of weeks I spent in the vault. Then I worked in the bookkeeping department for about six months, and then I was promoted to the teller line. And that’s how I started.”
When Haynes moved to the installment loan department, he was still so young that he could not witness notes.
“It was funny,” he said. “I wasn’t 21. So I’d do everything else, and then the manager would witness the notes.”
Haynes was happy with even the low-ranking jobs.
“You would have to take the mail at night, or pick the mail up in the morning,” Haynes said. “I always used that as an opportunity For one thing, I would probably get 15 minutes overtime.
Remember, I was starting at $1.15 an hour. And there were jobs like, ‘Gee, we need to clean out the storeroom,’ or ‘Would you be interested in changing the light bulbs?’ It was an opportunity to earn extra money. And I didn’t mind doing it. By the time I was a teller, I was a good teller. I was a young kid, but I was energetic. I wanted to learn. I applied myself And I always did more than what was required. I’m not sure I had a plan, other than to perform the task to the best of my ability. I guess I was just eager. I always asked if there was something else I could do.”
Haynes quickly attracted a mentor.
“The manager of the installment loan department, Bob Svitak, was 15 years older than I was,” Haynes said. “He was instrumental in guiding my career. When the time came, he said, ‘Here’s someone I can work with easily, and I can train him, and even if he doesn’t have any experience, why not give him a chance to learn the loan department?’ He taught me the business.”
Svitak taught Haynes that customer service was the key.
“The customer was someone special, and they didn’t have to do business with us – it was a privilege really, and it was up to us to service that customer,” Haynes said. “Bob Svitak was an absolutely wonderful role model. He showed me how to go out of my way to recognize people – calling them by name, acknowledging them in the bank and even when I’m shopping in the grocery store. People loved him. You can be quick getting back to a customer – you’re supposed to do that. Bob went above and beyond what was considered ordinary. He exuded warmth, and the customer felt he was the most important person when he was talking to Bob. That was something I wanted to emulate.”
In 1967, when the bank opened a branch in a shopping center, Haynes was promoted to branch manager.
“I was 24,” Haynes said. “If not the youngest, then I was probably one of the youngest officers ever appointed at the bank. I had a variety of jobs. I worked in the consumer lending department, became a credit card department manager, and I raised two children in the Bennington area.”
In the summer of 1982, First Vermont Bank decided to promote Haynes to commercial banking. In preparation, Haynes attended a course at the University of Vermont and spent the summer covering for vacationing bank officers all over the state – Rutland, Bellows Falls, Barre and at the bank’s headquarters in Brattleboro. But the bank’s plans were interrupted when the person in charge of its statewide installment lending fell ill.
So I covered,” Haynes said. “It’s September, and now it’s November, and now it’s December, and the guy was able to start coming back for one hour a week – not a day, a week. By March it was apparent that he wasn’t coming back. I was offered the job.”
Haynes moved into an office on the third floor of the bank, which was, at the time, located next door to BSL. Haynes can see his old office windows from his new ones.
“That’s how I got to Brattleboro,” Haynes said. “I now go from a position of lower management to at least middle management on a state-wide basis. I was assistant vice president. Then things started to move rapidly. In 1986 my boss at the bank was running the mortgage division; then they decided to separate the mortgage piece from the bank. That was because the bank now owned Vermont Mortgage Group.”
Haynes took over the retail lending department, which included installment loans, credit cards and indirect lending. But things did not go well at the Vermont Mortgage Group; by 1988 Haynes was running both consumer lending and the mortgage group. That was where he met Jeff Morse, now senior vice president and chief financial officer of BSL.
“George took over when Vermont Mortgage Group lost almost a million dollars in one year, and in two years he turned them around from losing a million to earning a million,” Morse said. “He created a business plan and changed their operating procedures and policies. Then he implemented it by better utilizing people. He let the managers manage. And he valued their opinions. He knows how to get the most out of people so people end up respecting him and themselves.”
In 1990, there was “a merger of equals” and the Howard Bank merged with First Vermont Bank and Franklin Lamoille Bank (the Howard Bank included the Woodstock National Bank as well as the Granite Savings Bank in Barre) to form the Bank-north Group holding company.
In hindsight, Haynes said, it probably was not a merger of equals at all.
“Two years or three years after that, there wasn’t any member of the First Vermont senior management team still part of that group,” Haynes said. “Everybody had either been fired or retired or had moved on. But at the time, the mindset was not that all of us were going to be replaced. No one felt insecure about their jobs.”
Right Place Right Time
In December of 1991, BSL was in turmoil. Ultimately, its president would be forced to resign. In secret, one of the directors called Haynes.
“He said a secret search committee had been set up to find a replacement,” Haynes said. “He asked if I would be interested in talking to them. I said, ‘Sure.’ How many times does someone call you up on the phone and ask you to interview to be president of a bank? You don’t get those calls every day. Right place, right time.”
According to director Johnson, Haynes was not only the board’s first choice, he was their only choice.
“I started making phone calls to people I knew in banking,” Johnson said. “Everybody pointed to George Haynes. I had never met him. Nobody on the board even knew him. We interviewed him, we were impressed, and two nights later we offered him the job. Thank the Lord he turned out to be the person he turned out to be, because we didn’t have a second choice.”
Haynes saw the new position as a way to return to community banking in the way he had learned from Bob Svitak. He calls it “Back to the Future” banking.
“Things were changing in the landscape at First Vermont,” Haynes said. “Even 10 years ago, you could see throughout the merger that things were moving farther and farther away from where we started. The policies of dealing with people one-on-one was starting to change.”
Haynes became president and CEO of BSL on the 27th of January, 1992.
College on the Fly
Haynes became a rarity: a bank president without a college degree.
“I’m back at the bank in 1961, filing checks in the booking department,” Haynes said. “In the first week I’m there, one of the bosses says there’s an American Institute of Banking course being taught, called “Principles of Bank Operations.” So I began to take AIB courses. I took almost every conceivable course that was offered. Accounting 1 and 2, principles of bank .operations, commercial law, analyzing financial statements, marketing. And I took a Dale Carnegie course. So I built up a lot of education.”
In 1988-89, while Haynes was in Brattleboro, he started taking Life Experience courses from Southern Vermont College.
“I met with the people at the college, and found I could get college credit for some of the bank courses, and I could use my life experiences to get other credits,” Haynes said. “For instance, I got a college credit for management. By then I was a senior manager. It all needed to be documented, of course. So the long and the short of it is, after I did the course with Southern Vermont College, I had some 60odd credits, and another 30 through AIB. I was, ballpark, 35-40 credits short.”
Then Haynes enrolled in Southern Vermont College.
“Every eight weeks or whatever, I took another class,” Haynes said. “I took all the classes I needed to get my degree, a Bachelor of Science in Business Management. I actually got the degree in 1993, the year after I got the job as president of the bank.”
Although Haynes said he would not recommend this particular educational path to others, it worked for him because he was ready to learn.
“Back when I was 18, I really wasn’t ready for college,” Haynes said. “And when I was 40-some years old, I really was. So the college courses I took, I loved them. I was enthused. I put time into them. Every college course I took I got a 4.0 grade. And I took 11 courses.”
Banking is a highly competitive business.
“It’s not like we’ve got a corner on the market of bank products and services,” Haynes said. “You want a checking account, you can walk up and down Main Street and find five or six banks and credit unions. You want a car loan, a mortgage, a savings account? We all have them. You can apply for almost any type of loan over the Internet, or call an 800 number.”
Banking is a retail business; it is no different than a shoe store or an automobile dealership, Haynes said.
“We could be in the produce business,” Haynes said. “They buy the lettuce – it’s green like money – wholesale and sell it retail. We buy the lettuce wholesale, in the savings, and sell it out retail, and that’s loans. The difference between the two is the gross profit, less expenses and so forth and so on. It may sound like an oversimplification, but it’s a product. Our product happens to be money. We buy wholesale and we sell retail.”
The selling point for BSL, as for the Brattleboro credit unions which are its main competition, is that the money remains in the community.
“The money deposited with us is, in turn, returned to the community in the form of loans,” Haynes said. “We’re not lending to another part of the state, we’re not lending to Timbuktu or Texas.”
Haynes’ first challenge at BSL was convincing the board members that they had to spend money to make money.
“We were conservative Vermonters who didn’t want to spend any money,” Johnson said. “So right off he shocked us. We were in a van, and he said, ‘I hired a chief financial officer today.’ And we were like, how can you do that? We can’t afford it. We were still of the old school. But he’s fantastic, and we came around to it. Didn’t take too long.”
Haynes brought in Mary Boulay to be in charge of retail banking and Jeff Morse to be CFO.
“The board’s question was, ‘Will we be big enough to handle the business as it comes through the door?’,” Morse said. “Will we have the people, the technology, the capital, the funds? That was the challenge. We took some calculated risks. When George hired me, the board was concerned if we could afford another executive level person. We couldn’t afford not to.”
Haynes made other important changes, Morse said.
“He took a small sleepy mom-and-pop shop bank, the lender of last resort, and turned it into what I think is the best bank in town, and the lender of first resort,” Morse said. “Once he established his team, he came out with a plan. He has a famous line: ‘Image and presence beats product and price.’ The image-what he wanted to make the bank become-is that people will be banking with us because it’s the right thing to do. And that is how his famous slogan, “For all the right reasons,” was born. We’re creating this image and this presence: we’re a mutual bank; we can’t be bought out; we’re locally controlled.”
When Haynes came, BSL had 16 employees and two old, small buildings. He immediately made badly needed cosmetic changes.
“We buy used furniture, we get somebody to at least paint the walls the same color,” Haynes said. “The carpet looked like somebody had changed the oil in their car without using an oil pan, so we replaced the carpet. We didn’t have money to plow the parking lot on a regular basis the first year. We hoped the snow melted. But we spent money to make the place look presentable. Did it pay off? Yeah, because the business continued to increase.”
Disappointed with BSL’s record of corporate giving, Haynes started contributing to non-profit organizations, even before the bank had the income to support the donations.
“The five-year average for contributions before 1992 was $3,500 a year annually,” Haynes said. “And from almost the beginning, we increased contributions. The mind set, the philosophy, is to give back and be part of a community, versus waiting for the community to be part of the bank. I think it goes hand in hand.”
Last year, Haynes upped the bank’s corporate giving to 10 percent across the board.
“Starting in 2002 and going forward, we’ve committed to donating a minimum of 10 percent of our net profits to charitable and community-minded organizations,” Haynes said. “For 2002, the number will be over $100,000.”
Also last year, in response to an article Haynes read in The Boston Globe, he decided to give every employee – the bank employs 45 people – what he calls “a living wage.” That means he increased the base pay for BSL employees to $10.25 a hour.
“Before I read the article I don’t think I was aware of the importance of a living wage, or maybe what we were paying, I thought was a fair wage,” Haynes said. “Anyway, I never had any way to define a living wage. Now I do. Our intention now is that as of January 1 of this year, we’ll adjust the $10. 25 by some inflationary rate.”
Late in 1993, Springfield Savings and Loan was having financial troubles.
“They were probably at $15 million or S16 million in deposits and were having a hard time supporting a bank that size and being able to make ends meet,” Haynes said.
A consulting firm brought in by the bank recommended that it partner with another bank. Springfield narrowed the number of possibilities down to two, and BSL made a successful presentation. Then 95 percent of the members of both Springfield and BSL-voted to approve the partnership. It was not, Haynes insists, an acquisition.
“It wasn’t a stock thing,” Haynes said.
“It was a vote of the members.” At the same time, BSL members voted to change to a federal charter. This was done to avoid a state law that would have required Springfield to change its name to Brattleboro Savings & Loan.
“We really weren’t looking to change, but we wanted to retain the name of the bank in Springfield,” Haynes said. “Why call it Brattleboro Savings & LoanSpringfield Branch? In small towns community identification is critical. Yougo to Springfield and they don’t want to talk about Brattleboro. They want to talk about Springfield. We thought it was somewhat of a no-brainer. And we were absolutely stymied that the state wouldn’t allow it.”
Haynes and directors from both banks lobbied Montpelier about the name change.
“They said absolutely not,” Haynes said. “You can’t do it. And we said it’s not like we can’t do it. It was allowable under the Office of Thrift Supervision of the US Treasury, the federal agency that regulates us. If we changed our charter to a federal charter, we can do it. The state said, ‘Do it. We understand.’ So we did. We think it’s extremely important for the office in Springfield to be called Springfield.”
There was, however, an important reason why the state balked. The federal government insures deposits up to $100,000. According to deputy commissioner of banking Candon, the state was worried that people living in the area might put their money into both institutions – BSL and Springfield – and not realize that they were the same bank, and their money was only insured up to $100,000.
“Some people might have thought the money they put in both institutions were insured up to $100,000 each,” Candon said. “Interestingly enough, Brattleboro switched to federal regulation because it permitted the name to remain the same, but the federal regulations no longer permit that.”
Although the loss of BSL’s charter cost the state money, Candon is convinced it did the right thing.
“Both banks might branch out, and that confusion might still happen,” Candon said.
Haynes’ next challenge was convincing his conservative board that they wanted to invest $2.5 million in a new building.
“Was every director firmly behind this thing?” Haynes said. “No. A lot of them were frankly skeptical. Why would we want to build a new building when we didn’t have the level of business to pay for the building? I suppose, if there was a risk, it was that we weren’t going to get the business. But I was 110 percent sure that we were. So we voted for the building, and thank God we built it when we did.”
Haynes was thankful because at the time, no one saw that Chittenden was going to acquire Vermont National and start a steady stream of customers moving towards BSL.
“I used to call them the ‘Big Three,’ Vermont National, First Vermont and Chittenden, ” Haynes said. “I used to ask, ‘When will the big three tumble?’ ‘What would be the tumbling order?’ Frankly, I was hoping that Vermont National (based in Brattleboro) would be last, because it was going to have the largest impact on the community. But sooner or later they were all going to fall, and somebody else would buy them, and we would wind up with their customers.”
In 1997, the bank completed its large, red-brick, Georgian-style building on Main Street. Included in the plans from the beginning was a large, comfortable room where non-profit organizations could hold meetings. Haynes, who had served on quite a few boards by then, knew from experience that there was a need for such a designated space.
“It’s able to accommodate comfortably between 50 and 75 people,” Haynes said. “We don’t use the room. Day in and day out, seven days a week, 24 hours a day, the room is available for non-profit organizations. It’s probably used on an average of 50 or 60 times a month. It has a separate entrance. Security-wise, it has a separate alarm system. People meet in the evenings, during banking hours, Saturdays and Sundays, whatever.”
The biggest challenge facing BSL is raising enough capital to support its growth without changing over to a stockowned bank.
“It’s not that we don’t have business coming through the door, but we’re also regulated,” Haynes said. “The regulatory agency that governs us requires us to have a certain amount of capital to support the size of the bank. That isn’t a problem, it hasn’t been a problem, and I don’t anticipate it being a problem. But in the short run, we could probably raise more capital if we became a stock bank. If we did that, it might be helpful to the community as a whole for a very short period of time, and I think it will be a death knell longerterm. Once you become a stock bank, you become subject to the stockholders being able to sell the franchise.”
Banking capital comes through earnings.
“The regulatory agencies look for capital to be at least 4 percent of assets,” Haynes said. “That is barely passing. Six percent is more acceptable. We have maintained a 6 percent capital ratio primarily because of the growth factor, and have, in essence, taken our earnings and used them to further grow our business.”
Because Brattleboro’s population has not changed significantly in the past 20 years, Haynes jokingly calls his growth strategy “stealing.”
“It’s not really a term we want to associate with banking,” he said. “But all kidding aside, when I first came here we had about a 5 percent market share. Probably now we’ve got about 20 percent. For a bank to have a 50 percent market share is almost unheard of in the Brattleboro area Vermont National, in its best years, before they were acquired – and they were a very good community bank – had about 42-to-44 percent market share.”
Haynes sees new acquisitions leading to more opportunities.
“As the franchise name changes next door and down the street, the purchaser now becomes BankAmerica or Citicorp, or Washington Mutual, which is making inroads coming East – they’re going East, young man, instead of West, young man,” Haynes said. “Those larger national banks, as they become a part of the banking environment in this community, will only enhance our prospects for future business development.”
Haynes think BSL can acquire another 30 percent of the market.
“If only one out of every two people in the area bank with us, we’d have a 50 percent market share,” Haynes said. “So I see the prospect, for the foreseeable future, as unlimited.”
However, deep and painful economic currents in Brattleboro may soon present larger problems for BSL. With several large employers gone, and others making plans to leave, the bank has every reason to be concerned.
“We’re always planning for the next economic event,” board chairman Little said. “Every time there’s a significant job loss in Brattleboro, it’s discussed at the board. We’ve been building our reserves, so if there is a downturn, and there are some losses to be taken, the bank can sustain them. We have a very low rate of losses, but I think the bank wants to be prepared for the economy no matter which way it turns.”
Haynes said he is ready to work with his customers if hardship overtakes them and they cannot repay their loans and mortgages.
“It’s not like it’s 90 days or 120 days and we’ll throw you out on the street,” Haynes said. “My experience is that the time when you take that kind of action is when the people stop communicating and stop trying to work with the bank to resolve the delinquency. We might grant some kind of moratorium, or let people pay interest only. We’ll try to figure it out. Maybe the person needs to sell the house and move to a different area where job opportunities are better. Maybe we’ll direct them to consumer credit counseling service for relief on all their debts.”
After struggling with the state over the name of Springfield Savings & Loan, Haynes has had little to do with state government.
“Off the top of my head, I can’t think of anything the state can do to help us,” he said. “We’re federally regulated, so we have more to do with the feds.”
Haynes is hoping the state can help Brattleboro, but he is concerned that Vermont’s anti-business image will not attract new business.
“I would hope that Vermont could at least change the image it appears to have about not being business-friendly,” Haynes said. “Everybody’s got a theory about why businesses move across the river or don’t come to Vermont. I don’t know. What I do know is that if you ask the average business person or the community leaders, people don’t say Vermont-from a business perspective-is the easiest place to establish a business. For whatever reasons, tax credits, so forth. People say they love to come to Vermont for other reasons, because it’s a safe environment, and it seems to be one of the few places where it may be more wholesome to raise a family. But from a purely business perspective, there are certainly some things we maybe need to do differently to attract and retain businesses.”
Haynes said he has no concrete suggestions for fixing the perceived problem.
“If I was that smart, I’d run for office,” Haynes said. “We just had a change in leadership. My thought is let’s see how it plays out. We have a new governor, a new lieu tenant governor. Will something be done that will make the process easier and still try to preserve what needs to be preserved?”
Strengths and Weaknesses
Haynes’ banking career has gone exceptionally smoothly, but he readily admits to having weaknesses as well as Strengths.
“It would be much easier to say I didn’t make any mistakes, but it would be lying,” Haynes said. “It took me probably 20 years to learn the customer service aspect. And in Bennington, I made loans some times that I shouldn’t have made. But it always seemed like the right thing at the time. I don’t think the bank lost a lot of money on those loans, but I probably took more risks making those small consumer loans than I needed to take.”
There are times when giving someone money is not the best thing for them, Haynes said.
“You may over-extend the individual,” he said. “Even though they really need the money, you’re better off saying no then pushing them beyond what they can comfortably repay. It’s an extremely fine line. Some people will pay before they cat, and that’s fine, and the money gets repaid to the bank. And some people, you push them over the edge so they can’t.”
On the administrative side, Haynes agrees with Morse, who thinks his boss’s biggest weakness is that he does not fire people soon enough.
“He’s almost too loyal to his people,” Morse said. “A person who’s not working out, yet he likes them, he hangs on to them way too long. He feels the person will somehow turn around and make it and learn the skills and get better. He probably goes way beyond what another manager would do.”
Hiring is always difficult; current laws restrict the kind of information an employer can elicit from prospective employees.
“If you don’t know the person, you can’t really get an awful lot of information,” Haynes said. “You can get references, but if they’re the references the person provides, what are you going to get? It’s a gut feeling, but unfortunately, it’s not always 100 percent correct. People can sometimes appear as what they’d like to think they are. That’s happened on more than one occasion.”
The Right Thing
Haynes ultimate goal – which he doubts he will reach – is to have every person living in the Brattleboro area bank with BSL.
“I’d like people to think that banking with us is almost patriotic,” Haynes said. “That there’s some meaning behind it. In terms of community support, we support the community. Patriotic may be a bad term, but whatever the term is, the money stays locally, we give locally, and there is a strong community connection.”
With an excellent management team in place, Haynes would like to devote even more of his time to community involvement, although it is hard to imagine what more he could do.
“A lot of people just pick up the phone and say, ‘I’ll talk to George Haynes and he’ll get me to the right person at the bank’,” Haynes said. “And that’s fine. That’s why I’m on the first floor. I think that’s extremely important. Do I daily sit down and open a checking account or make a car loan? No, but I talk to people about these things all the time. If I’m in the grocery store I talk to them about it. Today I had a doctor’s appointment; he gave me special inserts for my shoes, and before I left he’s calling one of our mortgage officers for a construction addition on his house. And I came back to the bank and made sure the person who was going to be taking care of him was aware that he was going to be calling.”
Haynes said he will happily spend the rest of his banking career at BSL.
“I spent 30 years at First Vermont Bank – almost my entire banking career,” Haynes said. “And if you were to look at Brattleboro Savings & Loan 10 years ago, it would have been the retail banking division of a large commercial bank. In 1991 we did checking accounts, saving accounts, certificates of deposit, personal loans, car loans. We didn’t have commercial relationships. That’s what I did for 30 years. It’s not like I just walked in here. I had 30 years of training. It’s not that I never get frustrated and think I’ve boxed myself in a corner.
“But I really enjoy what I’m doing. If you ask me what in my career I would have done differently, I would have loved to have gotten to Brattleboro Savings & Loan sooner.”
Copyright Boutin-McQuiston, Inc. Jan 01, 2003
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