Q&A: Belmont Savings CEO Robert Mahoney

A few year's ago, Robert Mahoney's corner office was perched on the 38^th floor of an office tower in downtown Boston with more than thousand employees at this beck and call as he ran the Massachusetts operations of Citizens Financial.

Today, Mahoney once again commands an office on the top floor of the Belmont Savings Bank after being named its CEO last month.

Of course, there are only two floors in the Savings Bank's headquarters on Leonard Street in Belmont Center. And roughly 80 employees who Mahoney is trying to learn all their names.

But Wellesley resident Mahoney doesn't in any way feel the subsequent reduction in floors, personnel or asset size is a letdown from his past posts as a leading manager at Bank of Boston and Citizens Bank.

"When I got a phone call from the Board of Directors, I was ready," he said, having spent 18 months after his retirement from Citizens raising money for a fund attempting to purchase community banks that did not take off.

Mahoney said he could have chosen retirement but the offer was too tempting.

"I took this job because I love banking," Mahoney said.

Today, running an institution know for its steady hand over the years, Mahoney has one goal during his tenure at the bank.

"I want Belmont Savings Bank to be the most admired bank in the Metrowest," he said.

Q: Is this a good time to take the helm of the Belmont Savings Bank?

A: This is a uniquely good time to be in community banking because the big banks have made a mess of their business. People read about them in the paper, they're paying fines and new laws are directed at them.

And we are seeing the benefit from those changes. Belmont Savings deposits are up 14.5 percent from the past year. That's ridicules in this economy.

Q: How do you view Belmont Savings Bank?

A: It is a classic solid New England community bank, making residential loans, some commercial real estate with $100 million and consumer deposits with four branches and an enormous focus on customer service.

It is also the right fit for its community. It makes very conservative loans and that why it has very low loan losses. It has a very solid operation:  statements go out, the numbers add up and a person, not an 800 number, answers customers phone calls. It's a perfectly good functioning bank in a great neighborhood.

It's hard to imagine that after 125 years, Belmont Savings has not grown bigger or gone broke.

But what I see is a bank is an enormous potential for growth because Metrowest is a banker's paradise: dense with a mixture of incomes, lots of small businesses – around 3,000 – which makes up the best banking market in the world.

I'd like Belmont Savings to grow into a $1 billion bank in four years and making $10 million in profits, double what it is today.

For a bank to grow it needs to have a certain amount of size and a billion dollars in assets makes us relevant in the market.

And we should be profitable: making a one percent return on $1billion and that's roughly 10 million dollars and that's enough to be philanthropic, pay good salaries and to make pretty good-sized loans so you can play with most companies in our neighborhood,

Q: What's your strategy to increase the banks asset size?

A: There is no silver bullet that will let you grow faster. You have to get it all right: the credit rates just right, sell to your customers like crazy, get the loan, service the loan and ask for the business.

That's the great thing of banking; everybody is a prospect and a candidate for our services. And one area that I see Belmont Savings Bank taking a leadership role in is small business lending.

Q: How wide open is this business?

A: No one's carved out that territory. Our underlying products are good now and will only get better.

Not only will we have the best offerings to business but we're also investing in service. Typically banks send out their sales guys with fancy products to bring in the business customer. But once the new customers are in the bank, they are forgotten, passed off to a branch. There are no dedicated small business team in most banks but we will have an office dedicated just to manage loans and bank services.

With only four branches, we'll need a great online presence so we can do business 24 hours by phone and computer so we are spending a lot of time with out our online vender to have a state of an art system up and running.

I know a lot of small business banking is electronic. They want their loan officer at the closing but all the other time; they don't want to see them.

We can compete online, and for small businesses, we will be their bank of choice.

Q: Does this mean Belmont Savings will reduce its consumer retail business?

A: I would submit that if you are a good small business bank, you would be a good consumer bank because businessmen are consumers, owners' operators who also need a wide range of services.

Business accounts are always more profitable then most consumer accounts but they have a stickiness, with families staying with the bank for 60, 70, 80 years, money that can be counted on.

Q: Will Belmont Savings be known as a business bank?

A: To business people, it will be known as a business bank but I don't want to narrow my brand too much.

For bank retail consumers, it's still Belmont Savings Bank, with that same fuzzy, high-touch, high-service bank, the same place as it's always been.