Key to the Kingdom

“Community” is the watchword in this institution

by Will Lindner

cnb_lead_877Like his employer, Community National Bank, Stephen P. Marsh, its president, chief executive officer, and chair of the board, has his roots firmly planted in the Northeast Kingdom.

Derby’s Community National Bank could not be better named — nor better captained, according to those who know Stephen P. Marsh, its president, chief executive officer, and board chair.

The bank’s motto is, “In these communities to serve.” And, says Charity Henderson of Derby Line, it does.

“My family has been using that bank for probably over 100 years. We go back to when it was just the Bank of Derby Line, when there were no other branches. It has expanded tremendously, and Steve has carried on the tradition of community service and grown upon it. The important thing is this: Lots of banks do a great job managing money; this bank goes a step further, and cares about the people, too.”

Marsh’s is, essentially, a small-town story, even though the bank he heads now has branches beyond its native Orleans County in Essex, Caledonia, Washington, Lamoille, and Franklin counties. It was founded in Derby Line in 1851, and stayed put for more than a century; in the late 1960s it opened its first branch office in Derby, a scant five miles to the south.

“Mark my words,” Marsh remembers then-bank president Lloyd Selby saying, “the tail will be wagging the dog.”

“He meant the branch would become bigger than the main bank,” Marsh explains. “And he was absolutely right. The main office is now in Derby, and that’s basically where I’ve spent my career.”

The same goes for his executive team: Kathryn Austin, executive vice president (with the bank for more than 30 years); Terrie McQuillen, chief credit officer and senior vice president; and Louise Bonvechio, chief financial officer and senior vice president. With Marsh, they are also officers of Community Bancorp, the bank’s holding company.

“This is a great group of people to work with,” says Marsh. “And notice, I’m the only guy among the executive officers. We were all born and brought up in the Newport area.”

Newport, perhaps another five miles away around the southern tip of Lake Memphremagog, is the region’s largest city, with some 5,100 residents. Marsh has a home in Newport Center with Alma, his wife of 32 years, whom he met when she was working at the bank.

“I’m sure all four of us have been offered opportunities to go somewhere else,” he continues, “but it’s the nature of the beast: We like being in Derby and Newport, having our friends, and raising families here. It seems to work for us.”

Marsh takes pleasure in stepping out of his office, venturing downstairs to the bank lobby, and finding lifelong friends and acquaintances there. But according to Henderson, the stairs go in both directions.

“He’s a bank president who’s very accessible,” she says. “If you want to speak to him they’ll call upstairs, and if he’s at all available he’ll say, ‘Come on up.’”

Henderson has a long history with Marsh, besides her family’s hundred years with the bank. At 69, she is just six years older than he, but she was Marsh’s English and public speaking teacher at Newport High School. (Marsh graduated in 1966.) “I was hardly older than the students when I got that job,” she recalls.

“Steve was a star pupil in my public speaking class, and he has continued to be a wonderful public speaker, very relaxed and comfortable.”

Henderson, who is now a CNB stockholder, says, “You should see him at a stockholders’ meeting! Nobody works a room better than Steve. There are usually 300 to 400 people there, and he seems to know them all by their first names and knows what their interests are. He makes everyone feel welcome.”

His social gifts may be natural, his community dedication home-bred and sincere, but banking, he swears, was never in his plans. Growing up, Marsh assumed he would join the family business, Marsh & Carpenter Machine Shop, run by his father, Maurice, and uncle, Chester Carpenter. After graduating from Newport High he went to the University of Vermont to study business, but barely made it through his freshman year. He was miserable, and apparently the word got out among his family’s friends and acquaintances.

A professional colleague of his father’s, the proprietor of a machine tool shop in Derby Line — the Butterfield Division of Union Twist Drill Co. — phoned him at the university and invited him to join the company’s apprentice-training program. Marsh jumped at the chance and headed to company headquarters in Athol, Mass., for training. He worked for Union Twist Drill for six years, but yearned to return to Vermont and the Northeast Kingdom.

Again, the word got out. During a visit home in 1973, Selby, then president of The National Bank of Derby Line, and his vice president, Arthur Judd, approached Marsh at church and said they’d heard he wanted to return. Would he like to come train at the bank? “They interviewed me at the bank after church,” says Marsh with a chuckle.

By this time Marsh had become the supervisor of production planning at Union Twist Drill, earning good money for a 25-year-old, but he took a 50 percent cut in pay to start over again as a trainee — this time in banking.

Quite obviously, it worked out. Marsh has held virtually every position at the bank (and professes that teller was his favorite; “It’s the people contact; you see people every day and you really become friends with them”).

Community National holds onto its employees. Linda M. Cloutier, with the bank for 27 years, directs the Community Circle, a bank-sponsored seniors program. Timothy B. Bronson, senior vice president and senior commercial loan officer, has been with the bank for 35 years.

He entered the executive team as a vice president in 2001, was named president and chief operating officer in 2004, president and CEO in 2007, and added the title chair of the board on January 1, 2011.

That was all without finishing college. “It’s my one big regret,” says Marsh. “I thought I could get ahead without it, and I’m one of the lucky ones who did.”

Meanwhile, the bank itself was growing. It expanded to Canaan in 1973, bought the Island Pond National bank — another small, local, historical bank — in ’75, and closed Canaan in 1979 or ’80, says Marsh.

“Our only other significant purchase was the old Lyndonville Savings Bank & Trust Co., which we bought in 2008,” Marsh says. “Aside from that, our expansion has been through opening branches of what’s now the Community National Bank. Today, we’re a $535 million bank, but we’re a totally Vermont bank, with 14 offices and a workforce of 170 people.”

Marsh assesses CNB’s role in the current banking environment.

“As a country,” he says, “we have turned the banking industry into commodities. I think one area that isn’t as commoditized is commercial lending, but some of our larger competitors are being forced to turn that into a commodity, too. That’s not a slam on them; it’s the business model that instructs them to do this. We’ve decided we can’t do that; that’s just not us.”

As a result, Marsh says, “We’ll never be the lowest-cost provider, and we’ll never have the highest-yielding deposit accounts. But we’ll always provide the best possible service we can.”

“Service” means a couple of things, Marsh explains. It means bank officers’ visiting a customer’s place of business to see and discuss the business’s financing needs. “They don’t have to be wealthy to get that type of service,” Marsh insists. “They might be talking about a $50,000 loan, not $3 million, but we’ll take the time to do that.”

“Service” also means precisely that.

“We as an organization are represented on something like 190 different boards around the state,” says Marsh; “school boards, and all the things people are involved in. We provide our employees the time to do it. I tell everyone who comes to work with us, ‘Your job is not the most important thing you do. If you have the opportunity to go see your kids play soccer you should do that. We’ll work out your schedule. Because that is important.’

In the bank’s lobby is a collection of heirloom currencies once printed, minted, and distributed as proprietary legal tender by various Vermont banks. Terrie L. McQuillen, is senior vice president and chief credit officer; Louise M. Bonvechio, senior vice president, chief financial officer, and cashier; and Kathryn M. Austin, executive vice president. All are officers of the bank’s holding company, Community Bancorp.

“And by telling them that,” Marsh points out, “people tend to work harder when they’re here.”

He adds, “It’s hard to say that to other folks if I’m not doing it myself.”

Marsh’s portfolio of professional and volunteer board activities is daunting. He serves on the board (and chairs the Audit Committee) of Fletcher Allen Health Care, the state’s largest hospital; he’s a longtime board member of Housing Vermont, the Human Resource Investment Council, Orleans County Child Advocacy, the Vermont Bankers Association (of which he is a past chairman), and many more. Consequently, his days are apt to begin at 4 a.m. and end at 8:30 p.m. or later, and include lots of driving. “I don’t mind,” he says. “It’s part of my routine.”

A recent land conservation project — some 900 acres adjoining Lake Memphremagog, in both the United States and Canada — brought Marsh into extended contact with Gil Livingston, executive director of the Vermont Land Trust. It was a special project, bequeathed by Derby resident Michael Dunn, who was a friend of Marsh’s. It was quite complex, and might have failed, leading to sale of the land, if people hadn’t been dedicated to it.

Livingston was impressed by the Steve Marsh he got to know.

“Fundamentally, Steve is a Vermonter from a community where he is beloved,” says Livingston. “There’s a generation of bankers, many of them no longer with us, who were community bankers before there was a term for it. Their whole philosophy was to look through a lens of what the local economy needed, seeing it from a community perspective. Steve Marsh is very much in that mold.”

Asked if the bank would ever consider a purchase offer by an out-of-state institution, Marsh replies with his usual aplomb. “We’re owned by our shareholders, and a very high percentage of them are Vermonters. If they ever decided it wasn’t their wish to remain independent, they would let us know. But we’ve always said, ‘We’re going to be the last bank standing.’” •