State of the Union

A little bank with big ideas

In six of the last seven years, the U.S. Small Business Administration has found Union Bank in Morrisville to be the most small business–friendly bank in Vermont. That honor is due in no small way to the hands-on leadership of Kenneth Gibbons, the bank's president and CEO, and the management team he has put together.

by Virginia Lindauer Simmon

In these days of electronic business, it feels like a drink of cold water in the desert to come across a bank that has its feet solidly planted in the real, not the virtual, world. It's like paying a visit to a place in the past, where profits are counted in values and people as well as dollars; where ideas are heard and acted upon; where technology serves the operation instead of ruling it. Think Mayberry social values in 21st-century surroundings.

Union Bank in Morrisville is such a place, and Ken Gibbons, Union's longtime president and chief executive officer, bears a great deal of the responsibility for this state of affairs.

Gibbons, and the management team he has pulled together over the years, run their community bank with a flair that is part creative genius, part seat-of-the-pants flying, part maverick attitude and part dedication to one another and the institution.

In May, as a result of a merger with its Citizens Bank division, Union bank moved up from sixth place to become the fourth-largest financial institution domiciled in Vermont, with $350 million in assets.

One reason for the merger had to do with gaining a shareholder base large enough to become listed on a national exchange. "Union had about 240 shareholders, and Citizens had roughly 500 at the time," says Gibbons. "You need a mass of around 500 shareholders to get on a listed exchange." Being listed makes it easier for the bank's shareholders, who can now contact any broker and go through AMEX to buy and sell stock, he says.

The Citizens merger was accomplished in much the same way most goals are accomplished at Union: by batting it around in team meetings and strategic planning retreats to determine what ought to happen and the best way to make it happen.

Every Tuesday morning, Gibbons and his management team members Rhonda L. Bennett, vice president/operations; Cynthia D. Borck, executive vice president/retail; Marsha A. Mongeon, senior vice president/treasurer and CFO; David S. Silverman, senior vice president/community services; and Craig S. Wiltshire, vice president/information systems officer meet for one to two hours.

"It helps us learn what areas folks are having trouble with," says Gibbons. "You get some people in a room, do a little brainstorming, and you can come up with some creative solutions."

"We get along, although we're kind of a direct bunch," Silverman confesses. "We expect each of us to live up to certain standards, and we ask questions. If I have a question about somebody else's responsibility, I don't hold back. I'm not worried about stepping on toes, and they're not worried about stepping on mine."

One of the enjoyable things about working at Union, says Silverman, is "if one of us anybody at the bank has kind of a nifty idea you think might work, it's not that hard, if it has merit, to get it implemented, because we don't have tons and tons of layers of management."

Without exception, the team members speak with pride and enthusiasm about what they've accomplished in the community.

"One of the things is that we consciously made a decision that started at management team level and subsequently was approved by the board that our delivery of customer service has to be in two directions," says Gibbons. "One is face-to-face contact. To that end, we've got 13 offices and 153 employees. The other side of that is the electronic delivery. We've made conscious decisions to offer telephone banking. We have 28 ATMs in our network at the Trapp Family Lodge, Mount Mansfield, Smugglers' Notch, Ben & Jerry's, Cold Hollow, Burke Mountain, the Elmore Store, even in Taft Corners. This is part of our electronic delivery. We've had PC banking now for four years and we're now rolling out a bill payment module."

Two programs in particular are mentioned repeatedly by everyone on the team: the B.U.I.L.D Program and the Save for Success school savings program.

Management team members point with pride to programs that reach into the community, such as Save for Success, a program for students in 21 area schools. Marsha Mongeon (left), Cynthia Borck, Ken Gibbons and David Silverman are part of the six-person team.

"Cynthia and I went to lunch one day, and we kicked around what to do with some of the excess funds we had," says Gibbons. "This was back 10 or 11 years ago now. We came up with an idea and went to the management, kicked it around a bit with them, said we'd like to do this program where we lend money on a construction program. In the last 11 years, we've done over a thousand residential construction loans totaling $120 million."

To help offset the risk of construction lending, says Gibbons, "we've come up with a good solution that controls the risk by both the borrower and the banks to make sure the contractors get their money. We are one of the leaders of construction lending, at least in our region."

The other program, Save for Success, was launched in 1995. It allows students to learn the principles of saving, managing and investing money for a return. The bank sponsors a weekly banking day at 21 area schools.

Union first signed up for a national program through the Vermont Bankers Association one of only two banks to do so. Soon realizing the formal program, with its on-line component, was too regimented, the bank decided to take it off-line. "Rhonda Bennett and her group came up with some ideas and we now have 55 volunteers in the schools," says Gibbons.

Gibbons smiles as he recalls the first school presentation. "I'll never forget it. We went down to the gym at the Cambridge Elementary School. We had, I think it was first through sixth grade," he says. "One of the staff did a great presentation. I wanted to talk about how important it is to save, for credit in the future to buy a home or car, how important it is to keep your credit clean and so on. About the third row back, this arm shot up, and what he wanted to know was if he was going to get an ATM card with his account.

"That was one of the decision moments when we knew we wanted to have a double-delivery system [even for the children] when a third-grader wanted to know if he was going to get an ATM card."

Another area where the bank has been aggressive is in commercial lending. "Approximately 50 percent of our loan portfolio is what would be defined as commercial loans," says Silverman. "If you look at most community banks of our size, usually that ratio is more in the 20 to 30 percent range."

With its roots in a rural area, dedicating resources to commercial lending is "enlightened self-interest," says Silverman, "because if we help small businesses thrive, that is where employment opportunities are generated."

True to its community banking mission, Union draws its people from the surrounding area. A look at the roots of the management team tells the story.

Although Mongeon came to the bank 14 years ago from Arthur Andersen, she grew up in South Burlington before leaving to attend Bentley College to study accounting. "I'm a CPA," she says. "I was in Boston and had a good career going, but I wanted to come back to a smaller community, to a life that was more than work. The person doing the job in Boston before I did dropped dead of a heart attack!" As Union's CFO, she sees to staff management, crisis solving and review of procedures and accounting.

Wiltshire joined Union Bank part-time in 1989 while at Johnson State College studying accounting, computers and business, coming on full-time in 1991. "I was doing credit analysis for Ken as a commercial lender, and they found I knew about computers," he says. He oversees the bank's management information systems. "We make sure our employees have the tools to do the jobs. Most IT people circulate every two or three years," says Wiltshire. "I've been here a while."

Borck is a Morrisville native who moved with her mother to Connecticut, where she finished high school. "I worked for a couple of different banks in Connecticut," she says. "My husband and I decided we wanted to raise our children here, so when they were 1 and 4, we moved back."

Now on the job for 16 years, Borck is responsible for the bank's personnel, making sure customers are serviced and the staff is trained and knowledgeable. "I'm very proud of the fact we've been able to grow people in the bank in their careers to become officers," she says.

Bennett grew up in Jeffersonville and started as a teller 25 years ago while she was in high school. She says it's a standing joke that she's changed careers more than anyone in the bank. I moved to CSR, from there to commercial loan assistant, jumped the fence to become operations manager, and have progressed over the years to become vice president of operations, left that, developed a training program for the bank for five years, left that, came back to be the bank's operations officer and am on the threshold of leaving it again to move to the lending side working with Cynthia.

Bennett has taken advantage of the bank's tuition remission program and is halfway through her junior year at Johnson State College. "I'm both student and teacher, because I also teach American Institute of Banking courses," she says.

Silverman, who's been at the bank 17 years, says he likes to think of himself as a native, although he was 8 when he moved with his family to Essex Junction. "The story of how I landed here is that Ken Gibbons taught a class called Money and Banking my senior year at Johnson State College, and he asked me to come interview." Silverman, who had graduated with a degree in business, put him off for a year while he worked with the college's admissions department. "I ran into him around town," he says, "asked if he still had an interest in talking to me, and I started within a couple of weeks.

"I think I was a little bit of an experiment," says Silverman. "I started as a management trainee I don't think there had been a whole lot of those before then." Within a few months, Silverman was working with consumer lending and working closely with Gibbons on special projects, including auditing SBA files. "I think he might have had a plan I wasn't aware of, pointing toward the commercial lending part of the business."

After a year, Silverman was sent to Stowe as assistant branch manager, gradually getting into commercial lending and becoming branch manager. In Stowe, the commercial lending practice got so demanding he relinquished his branch manager responsibilities. "Sometime in the early '90s I can't pinpoint this I missed a meeting and became responsible for marketing at the bank, which persists to this day," he says with a chuckle. "We all volunteer for various things, but sometimes we don't know we volunteer for it."

Rhonda Bennett, vice president/operations, with vice president/MIS, Craig Wiltshire, who starts each day with what he calls "The Morning Show," making sure all systems are running and all the branches are up.

Volunteering in all its permutations is strongly encouraged at Union Bank, says Gibbons. "A few of us here sit on four, five or six boards and groups, and one of the reasons is because it's one of the best ways to keep our ear to the ground, to learn what the needs are, and you get good ideas from it."

Of the management team, Gibbons is the only member with no original Vermont connection. He entered banking right after graduating from high school in Duxbury, Mass. His took his first job in 1965 at the Plymouth Savings Bank, where he worked "in the back room with an old Burroughs Sensimatic posting machine." He worked as a teller, assistant manager and manager before leaving to join Plymouth Five Cent Savings Bank next door.

"In 1969, I went to work for Hancock Bank & Trust in Quincy, and ended up in their accounting department. I managed the general ledger department and moved into operations," he says.

In 1974, he moved to Vermont. "I had a job promised at a financial institution. There was a major turnover at that company and I was left without a job."

He landed a position with the Sterling Trust Co. in Johnson, a small bank that had just bought an in-house computer system and needed someone with experience, which Gibbons had gained while at Hancock. He helped Sterling get its new Hardwick branch off the ground, "then they purchased Enosburg Falls National Bank and then they opened a branch in Colchester. By that time, I had a pretty good smattering of the logistics of the northern half of the bank. In February of '84, I came to work for Union Bank."

Although Gibbons attended some evening classes at Bentley College in Boston, he didn't complete his degree work. "I've been through, I guess, more of a school of I wouldn't say hard knocks, but some valuable lessons. I have gone to a number of credit schools put on by the ABA and SUNY Buffalo, and have been pretty active over the years at various ABA education programs."

It's clear that Gibbons' broad experience, steady hand and enthusiastic personality have been influential in making Union Bank the thriving enterprise it is. In such a highly regulated industry, it's rare to find the degree of devotion that seems to permeate the bank, from the receptionist at the front desk to the people in the field, who echo Gibbons, when he says, "I have to tell you that I love the business; I love the job; I love the area. There aren't too many people lucky enough to have a job like this."

Originally published in October 2003 Business People-Vermont