Mike Cote's Business Editor's Notebook: The Provident nears $1B in assets using a Centrix approach to businessBy MIKE COTE
August 11. 2018 10:47PM
To reach nearly $1 billion in assets, The Provident Bank needed a new business model - so it borrowed one born in New Hampshire.
As chief financial officer of The Provident, David Mansfield had been responsible for all areas of the bank except sales. His colleagues were used to rallying behind his strategies, but when he was appointed CEO and president in 2013, he decided the Amesbury, Mass.-based bank needed to embrace radical change.
"I just realized we were trying to do too many things and not doing them all really well. And we needed more focus," Mansfield said last week during an interview in Portsmouth. "One bank I looked at and really admired was Centrix Bank, what Joe Reilly had done."
Reilly founded Centrix in Bedford in 1999 as a commercial bank focused on small and medium-sized businesses. Centrix reached more than $1 billion in assets before Boston-based Eastern acquired it in 2014.
Now, five years after Mansfield took the helm at The Provident, his bank is inching closer to that $1 billion mark, thanks to its focus on small and medium-sized businesses as well as international banking services.
This year, The Provident was ranked No. 7 for its year-over-year percentage growth of commercial and industrial loans among commercial banks under $1 billion in assets in the United States. Five years ago, The Provident barely made the top 200 list.
"We're the only one in New England that is even in the top standings," said Mansfield, 56.
Reilly, who joined The Provident's board of directors in June, had created Centrix from scratch. Applying the Centrix model to The Provident was a major shift for a bank with nearly 200 years of history.
"It's always easier when you're starting fresh, as (Reilly) did, purposely building the bank to be supporting the small and medium businesses. I inherited a bank that started in 1828 and certainly had a different legacy," Mansfield said.
Mansfield and his new executive team worked with the bank's board to define The Provident's strategy. They could see that Centrix was approaching $1 billion dollars in assets and likely would be selling itself soon. They wanted to be ready to fill the gap.
What The Provident aimed to offer its small and medium-sized business clients was the kind of attention national banks like Citi and Wells Fargo offer to Fortune 500 corporations. It's a strategy that has paid off handsomely over the past five years.
"Since that time we've grown the bank 45 percent, but the commercial category, we've grown 32 percent compounded annually and 45 percent last year, which is something I'm really proud of," Mansfield said.
The Provident is one of 19 community banks operating in New Hampshire that are headquartered elsewhere, including 11 based in Massachusetts. The Provident began a major push into New Hampshire a few years after Mansfield joined the company, adopting a strategy that Massachusetts rival First & Ocean had put in place to expand along the Seacoast before it was acquired by BankNorth in 2004.
While The Provident is chartered in Massachusetts, it soon will be moving its executive team from Amesbury to Portsmouth, where it's building a new headquarters at 25 Maplewood Ave. Fifty-seven of its 137 employees are based in New Hampshire, where the bank has more branches and more loans than it does in Massachusetts, said Mansfield, who lives in Portsmouth.
"By being a Massachusetts-chartered bank we have unlimited deposit insurance. And I think that's a bone of contention with the New Hampshire bankers," said Mansfield, who is the only board member of the New Hampshire Bankers Association whose bank is not based in New Hampshire.
To fuel its growth, The Provident raised $48 million in 2015 through a partial initial public offering (IPO), which allowed it to keep majority ownership with the bank's mutual holding company. The IPO also enabled the bank to create an employee stock ownership plan and dedicate $2 million in shares and $200,000 in cash for a community charitable foundation.
The Provident's focus on business lending has earned it the distinction of being the top Small Business Administration lender in New Hampshire by dollar volume for the past four years. Those high numbers are due in part to The Provident creating a niche for working on complicated, large deals, Mansfield said.
The Vermont native spent most of his childhood in Connecticut, where his father was a manager for the W. T. Grant department store company. After serving in the Navy, Mansfield earned an accounting degree at the University of Massachusetts Boston. This is his third stint living in New Hampshire.
The Provident's greatest contribution to the Granite State is its emphasis on helping to grow businesses, Mansfield said. The bank's community outreach includes working with community colleges on workforce development.
"Every bank is mandated to give back to their community through the Community Reinvestment Act. Our focus is doing that through economic development," Mansfield said. "Because as a business bank we really want to help our core customers - the small and medium businesses that are locally owned employing people that live in the community. If we can help them thrive, we all thrive."
Contact Business Editor Mike Cote at 206-7724 or email@example.com.