Thinking Big in a Small Town
Meyeroff, Wendy J., Independent Banker
YOU'VE GOT TO GET UP EARLY TO BEAT ED HENNESSEY AT MAKING DEALS IN MAINE
Can one man grow a community bank by himself? Ed Hennessey would be the first to say no, but his drive may be the biggest factor in the success of Machias Savings Bank.
It would be easy to think of Machias, Maine- population 2,300-as just a quaint burg along a rugged coastline with waterfalls nearby (the town's Indian name means "bad little falls"). Think again. While there are only two traffic lights in surrounding Washington County, Machias is a major service center. Citizens come for services ranging from the local hospital to the University of Maine to Machias Savings Bank, where Hennessey is CEO and president.
Hennessey, 63, grew up poor in neighboring Whitneyville. His aunt (his teacher for four years) encouraged his love of math, which led him to accounting. After college, he rejected Big 8 accounting- firm offers and came to Machias Savings, where the community bank had one typewriter and two tellers. "I was the fifth employee," he says.
Machias Savings' growth began when Hennessey proposed opening the first branch. In only three months Hennessey met a board member's challenge to generate $1 million in loan originations, then handled the expansion.
Since then, the original two-room savings institution has undergone four expansions; with 13 branches and more than 200 employees, it's one of the county's largest employers. Even during recent months, the community bank has sought almost a dozen new staffers.
"We still do Christmas clubs and savings accounts, but our I.D. today is as the major commercial lending force in eastern and northern Maine," says Machias Savings director Greg Coffin. Borrowers include a disabled vet who needed $2,000 for a start-up and an executive who needed $30 million for a factory expansion. The result? From about $9 million in assets when Hennessey joined in 1970, Machias Savings now has $965 million.
"I think what sets Machias apart from other banks in eastern Maine is the level of service we provide," says Hennessey. To maintain this, a mystery shopper regularly comes in and presents assessments. "Let's say only 80 percent of our frontline people are calling customers by their first names," he says. "Before the next review, all of our people will be calling customers by their first name."
Kelley Danforth, Hennessey's executive assistant, remembers working in the loan section: "Ed would come down with a stickie that said he needed a $10,000 loan with X percent interest rate and the term for it. You'd get the information ASAP because you knew that with Ed, it was likely the customer was waiting right there at his desk."
"The telephone is a bit of a joke around here," says Jim Donnelly, senior regional vice president for Machias Savings. "If you don't answer it in two or three rings, Ed jumps to get it. I think it's because he doesn't like getting voice mail, so he extends the same courtesy to other people."
Building his own strong relationship with area businesspeople is central to Hennessey's success as a dynamo community banker, colleagues say. "He understands his borrowers in a way an outsider from Chase can't," says Coffin. "He'll go out after work and have a beer with folks and be perfectly comfortable," says Danforth. "After snowstorms he puts an attachment on his pickup and plows out neighbors or the elderly," says Donnelly.
One time, both the bank and Coffin's TrueValue store were expanding. "The bank was digging out earth, and I needed to pack our foundation," says Coffin. "Ed said, 'Here, call so-and-so. He's doing our hauling.' I got hundreds of loads of gravel, and everyone benefited."
Supporting area services is another way to stay in touch. The Machias Savings Foundation has funded research into geneticbased diseases at a local hospital and scholarships to local colleges. Hennessey encourages his staff to volunteer for causes they believe in, such as coaching local sports, fighting domestic violence and running in the annual breast-cancer fundraising race. …